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Red tape blamed for PH's poor internet connectivity, low cell tower density

Former Department of Information and Communications Technology chief Eliseo Rio Jr. blamed  bureaucratic red tape of the local government units as the reason behind the Philippines' poor internet connectivity and lowest cell tower density in the Southeast Asian region.

Red tape blamed for PH's poor internet connectivity, low cell tower density
Former DICT chief Eliseo Rio Jr.
“We do not lack investments, as these are already available, not coming from government but from the private ICT sector, to fast track the installation of telecommunication infrastructure. The real problem is the red-tape that only government can solve. The government does not need to put up any funds for telecommunication infrastructure. It only needs to facilitate the telcos to provide efficient public services, and not threaten them with expropriation. The ball is in the hands of the government!,” said Rio in a lengthy FaceBook post.

Calling the problem as a “legal” red-tape, Rio said the numerous permits that require so many signatures is the problem.

“I invited common towers and passive telecommunication infrastructure providers to invest here to fast track this roll-out. By 2019, these providers poured in almost P400B in committed investments as per record of BOI. In fact, this massive amount of investment made it possible for the Philippines to breach the P1trillion mark of committed investment for the first time in its history. So all the investments needed to fast track the roll-out in telecommunication infrastructure was there by 2019 (this was DICT’s contribution to the government’s Build Build Build program, without spending any government funds), but even the foreign providers started complaining that they had rolled-out 10 times faster in other countries, but were slowed down by red tape in our country,” Rio explained.

Rio added: “So this red-tape problem is real, unlike what some quarters are saying that this is being made as an excuse by the telcos because they don’t want to invest more money on their infrastructure. Aside from the billions of pesos poured in by the telcos for infrastructure, non-telco companies, that were instrumental in putting up thousands of towers and thousands of kilometers of fiber optic cables (FOC) in our neighboring countries like Vietnam, Cambodia, Malaysia and Thailand, are also complaining that they have not encountered so much red-tape that is drastically slowing them down here in the Philippines. The “illegal” red-tape is not so much a problem as they encounter this also in other countries, they say.” 

According to Rio, the Philippines was the first country in the region to roll out networks in 1991, years ahead of Vietnam.

“How come Vietnam has now around 70,000 towers as against our 22,000 towers?,” Rio asked.

“When 2G came around 1995, two new telecom companies, Globe and Smart lorded it over with their GSM network because aside from voice service, their networks offered SMS or text messages. But unlike the rest of the world that used mainly the voice service, Filipinos became crazy with texting and we became the texting capital of the world. We were sending around 1.4B text messages or SMS a day, and for this 2G technology, we did not require so many towers. In fact, we need only around 18,000 towers to send all those billions of text msg daily and this went on till the smartphones came. So when the killer application was texting, there was no incentive in building more towers as around 18,000 towers were enough to carry the billions of text messages daily,”

Rio said the telcos were content with these 18,000 towers, but it all changed during the smartphone era starting in 2012, when internet content began replacing the the SMS service. 

“That was when red tapes begun to be felt when our mobile telcos started overhauling their networks to accommodate the 3G to 4G technology. More towers are needed to utilize these new technologies, because internet content requires real-time connectivity like voice services. Other countries using voice services since 2G had already the number of towers to easily shift to 3G and 4G. In the Philippines, we were stuck with the number of towers that was good enough for SMS, but very much lacking for services that require broadband and real-time connectivity. Adding more towers got mired because of the so called “red tape” starting 2013, such that by 2016, poor telecom services became an election issue, that helped President Duterte win,” Rio said.

When Rio became the DICT Acting Secretary in 2017, he initiated the entry of a third telco as per instruction of the President, to improve telecommunication service through strong competition. 

Rio said this a third telco will boost internet connectivity because of competition from major players Smart and Globe.

“The selection process was in fact designed to award a winner that can really challenge Globe and Smart, by using the Highest Committed Level of Service (HCLOS). The awardee must show that it can commit a level of service higher than the incumbent telcos, projected for five years. And they must back up their commitment with a performance bond, the higher the amount, the more points earned in their favor. Because of this level of commitment backed up by a hefty performance bond, when the third player (DITO) was selected, both Globe and PLDT/Smart put in their biggest capex investments since they started operating more than 20 years ago, starting 2018 increasing those investments yearly in 2019 and 2020. While they may deny it, they are preparing their networks for the competition that DITO will give them when it starts commercial operations in March 2021. This in fact greatly improved our telecommunication services,” Rio explained.

In 2016, internet speed was just 10 Mbps. Now it is around 22Mbps, and the third telco has not operated yet. 

“DITO committed 27Mbps internet speed when it start commercial operation on March 2021, or else it will lose its performance bond of P25.7B. DITO also committed that by the 5th year of its operation it will have a speed of 55Mbps. Unlike Globe and Smart that has been operating for more than 20 years now without any commitment, we forced the new player to commit a level of service that would make our telecommunication services at par with our more progressive neighbors. Globe and Smart would have to try to achieve this, for if they do not, they will lose competition to the new player. This is why I am quite confident that our telecommunication services would improve, as it has already improved to some extent since 2018 when the selection process for the third telco began,” Rio said.

Topics: Department of Information and Communications Technology , Eliseo Rio Jr. , red tape
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