In lie of service | Inquirer Business

In lie of service

/ 12:09 AM December 21, 2015

REGARDING the miserable state of the broadband service in this country, we just have to face the facts.

Some months ago, an international hi-tech company called Ookla, which could compute the speed of Internet connections anywhere in the globe, noted that the Philippines had the second slowest speed in Asia.


At that time, the average Internet download speed here was only 3.64 mbps (megabytes per second), compared with more than 122 mbps in Singapore, about 34 times faster.

Among the 22 Asian countries in the Ookla study, we beat only war-torn Afghanistan, which was not too far behind us at 2.52 mbps.


That was Afghanistan, one of the poorest countries in the world, which hardly had a BPO sector relying on Internet services.

The Philippines also has one of the most expensive Internet services in the world at more than $18 per mbps, versus only about $5 per mbps worldwide.

All in all, we ranked No. 161 (out of 202 countries) in terms of Internet service.

Not just a few, therefore, cheered the entry of a third player in the broadband mobile service, the San Miguel group, in an apparent joint venture with Telstra, the largest telecom firm in Australia.

According to Fitch Rating, one of the three credit rating agencies accredited by the SEC in the United States, we could expect telecom firms PLDT and Globe to invest heavily in fighting the forthcoming competition from San Miguel.

Like it or not, the telecom sector in this country would have to invest heavily in providing service for data because broadband service would be the lucrative future.

Mobile telephone service still accounted for the bulk of the incomes of both PLDT and Globe, although both already expected that the telecom sector would have to shift to broadband as their main sources of growth. They would have to invest in broadband service, in other words.


Fitch Rating estimated that, for next year alone, in anticipation of the entry of San Miguel, the duopoly of PLDT and Globe would spend something like P85 billion, or $1.18 billion, to upgrade their broadband services.

According to news reports, San Miguel was willing to invest some $2.5 to $3 billion in its telecom project, with or without Telstra.

Investments in wireless broadband among the three telcos could thus reach more than $4 billion. Never before has this country seen that kind of money going into any sector that would be essential to business like broadband service.

Think-tanks in the academe and business sector declared a long time ago that the telecom sector in this country badly needed a heavy dose of competition, something that—based on news reports—San Miguel and Telstra would inject soon.

So far so good, until of course PLDT suddenly received the divine inspiration that it just had to eliminate from the face of the earth the new competition that would come from San Miguel.

How? By asking the Aquino (Part II) administration, while our leader Benigno Simeon aka BS was still around, to confiscate the most important asset of a telecom firm like San Miguel! Simple.

That would be its radio frequency, obtained by Liberty Telecoms a long time ago from the National Telecommunications Commission, or the NTC.

According to reports, San Miguel controlled the radio frequency in range of 700-800 MHz, which was said to be “cost-efficient” in the broadband service, because of its wider coverage and stronger penetration.

It so happened that PLDT has been using the higher frequency bands, and so its officials claimed that San Miguel would enjoy an advantage over the longtime champion of inefficient Philippine telephone and broadband service called PLDT.

Supposedly in the name of fair play, PLDT called for the NTC to get back the radio frequencies owned by San Miguel. Just like that! Then, the NTC would have to hold a bidding for the confiscated frequencies.

PLDT of course forgot to say anything about the NTC confiscation of the radio frequencies under its control, including those in the 800-1,000 MHz range, which would have the same “cost efficiency” as the 700 MHz held by San Miguel.

If confiscation would be the fair and right thing to do, so this country could improve in its broadband service, perhaps PLDT—as well as Globe—should also give up their frequencies to the NTC.

That way, the government could start anew, bidding out the radio frequencies, earning billions of dollars from the bidding, similar to the practice in other countries. As it happened, the NTC years ago just gave away those radio frequencies—for free.

Neither PLDT nor Globe would be willing to give up their respective radio frequencies, perhaps for redistribution in the industry, which would necessarily include San Miguel that blatantly wanted to break the duopoly.

Never mind that the publicly listed San Miguel paid for those radio frequencies, with the money of its stockholders.

Basta, PLDT wanted the government to confiscate the San Miguel asset.

Let me see if I could get this right—and so PLDT wanted the Aquino (Part II) administration to confiscate the most important asset of its future competitor San Miguel, which would mean the death of the San Miguel telecom project, and the government should then give the asset to PLDT, so that PLDT could eliminate the threat of competition from San Miguel altogether, and PLDT would no longer have to invest a lot of money in upgrading its services—was that it?

The name of the game in the telecom sector should still be service.

Come to think of it, the name of the game in this country should always be service, including the service that the government should provide the public.

Based on “conservative” estimates made by Sen. Ralph Recto, the government next year would collect some P40 billion in fees and charges for supposed “services” (i.e. issuance of all sorts of permits and licenses) that it would give to the public.

That amount even excludes the P15 billion in “collection” from the registration of vehicles, which would all be caught in monstrous traffic that the government nevertheless would still fail to solve—despite the P15-billion collection.

All in all, in 2016 alone, based on Recto’s “conservative” estimates, the government would collect some P150 billion in all sorts of fees and charges.

And what would the public get in return except a lot of frustration and extra expense due to red tapes?

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