On to a better digital future

"It is really time for the administration to whip the telecom duopoly."


Why were we not surprised by the avalanche of complaints about our Jurassic telecommunications service as schools opened to distance instead of face-to-face learning under COVID-19? Simple. Because we have been laboring under the most problematic system in this part of the world despite the continued assurances and reported billions of investments of the controlling telecoms duopoly.

So, if we are still entertaining any ambition to be in the league of our digitally connected neighbors in ASEAN, it is really time for the administration to whip the telecom duopoly, PLDT/Smart and Globe, into line and order them to deliver on their mandated, not just promised, upgrade of our system. The sooner, the better.

That roll out, imposed during then President Ramos’ privatization spree decades ago, gave this duopoly carte blanche to do whatever it took to upgrade the entire system to world-class standard. Sadly, instead of enhancing our digitalization regime, this virtual monopoly has only resulted in one of the slowest and, yes, most expensive telecoms system network in the world. At a time when an enhanced and stable telecoms backbone is critical to every country’s proper transitioning to a new normal, we cannot afford to let this duopoly do us in all over again.

As the recent World Bank/NEDA report on the country’s digital system noted our

use of digital technologies is still below our potential as our digital adoption remains generally behind many of our regional neighbors. The report said “the digital divide” even within ASEAN between those with enhanced internet access (Singapore, Thailand, Malaysia) and Jurassic one (Philippines, Myanmar and Laos) has led to unequal access to life-changing economic opportunities and social services.

A pity, indeed, considering that we have one of the highest if not the highest Facebook and SMS usage per capita in the world. No less than Ndiame Diop, World Bank Country Director for Brunei, Malaysia, Philippines and Thailand lamented the country’s lost potentials as a result of our Jurassic digital situation.

Said Diop: “Internet connectivity – the foundation of the digital economy – is limited in rural areas, and where they are available, services are relatively expensive and of weak quality....Upgrading digital infrastructure all over the country will introduce fundamental changes that can improve social service delivery, enhance resilience against shocks, and create more economic opportunities for all Filipinos

Diop’s lament is truly unnerving considering the hype (thanks to the duopoly’s supercharged marketing onslaught) which has attended our digital world for years on end.

As the report indicated, “where internet services are available, Filipino consumers experience slow download speeds.” Our mobile broadband speed of 16.76 megabytes per second (Mbps) is much lower than the global average of 32.01 Mbps. The digital divide in the region is glaring: the 3G/4G mobile average download speed stands at 13.26 Mbps while ours stands at only seven (7) Mbps.

These revelations should really push the government to do something about our digital situation. Even the study’s notation that efforts to enhance our digital infrastructure is being hindered by a lack of competition as well as restrictions on investment in the telecommunications markets should not deter us from pushing for an immediate upgrade and expansion of our telecoms system. As a matter of fact, the report’s nudge on” the restrictions on investments” – which I take to mean as the entry of foreign participants in the market – is not and should not be made an excuse to delay any efforts at all..

Truth be told, foreigners are very much in control of the telecoms duopoly. The PLDT/Smart group although technically adhering to the 60/40 ownership rule is, for all intents and purposes, controlled by foreigners in more ways than one. Anthony Salim’s First Pacific Group holds sway over the company. On the other hand, Globe Telecoms is essentially working under the watch and the bidding of the Singapore telecoms giant, SingTel, and its parent company, Temasek Holdings.

In any event, the “other hindrances” to a more responsive and stable digital system such as the low transaction account ownership, the lack of a national ID, nascent payment infrastructure, and the perceived risk of digital transactions can be easily cured by legislation or, if that is not possible at this point, even initially through an executive order or a policy order by the DICT and its implementing arm, NTC. The need to encourage digital payments and the expanded use of e-signatures among government agencies can be done in no time at all. In a word, the duopoly and other potential entrants into the country’s telecoms system should not be allowed to make use of these so-called ‘hurdles” or “restrictions” to draw us back even further into becoming the outliers in the global digitalization race.

As the report correctly noted, the rapid adoption of digital technologies can help the Philippines overcome the impact of the Covid-19 pandemic, recover from the crisis, and achieve its vision of becoming a middle-class society free of poverty even earlier than as projected under the administration’s “Ambisyon 2040” development plan.

No less than NEDA Undersecretary Rosemarie Edillon who was part of the joint World Bank/NEDA study group that produced the report emphasized “This pandemic has caused substantial disruptions in the domestic economy as community restrictions have limited movement of people and reduced business operations nationwide. As we are now living with the new normal, the use of digital technology and digital transformation have become important for Filipinos in coping with the present crisis, moving towards economic recovery, and getting us back on track towards our long-term aspirations.”

Topics: COVID-19 , Rosemarie Edillon , PLDT , Smart , Globe , Anthony Salim
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