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Internet disservice provider

/ 02:41 AM March 14, 2016

LATELY, telecom giant PLDT seemed desperate enough to deploy the “C” word, ranting about what it said was something bad for “competition” in the telecom sector.

That should be the touchy issue on the 700 mhz spectrum in the radio frequency band in mobile telephony.

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Together with Globe, the only other party in the heavy-handed telecom duopoly in this country, PLDT has been waging a campaign to wrest the 700 mhz frequency from owner San Miguel group.

PLDT in effect wanted the government to confiscate the 700 mhz frequency of San Miguel for “redistribution” to PLDT and Globe.

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PLDT even declared that, if the government would fail to do what PLDT wanted, the government would create an “anti-competitive environment” in the business sector.

There—the “C” word! And it was the fault of the Aquino (Part II) administration!

Anyway, what could be so darn critical in the 700 mhz frequency?

It seemed that some 80 percent of the spectrum belonged to San Miguel, simply because it bought with its stockholders’ money Liberty Telecom, the original holder of the 700 mhz spectrum.

The spectrum is part of the so-called LTE frequencies which, in turn, are important to telecom companies worldwide.

Well, the telecom business already changed worldwide, as it moved away from calls and texts as main sources of income, going to the more popular broadband or Internet services.

The shift created a new craze in telecom, called LTE service, which stands for “long-term evolution,” the new standard in mobile phones, because LTE could give faster connections than previous standards like 3G.

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With LTE, the broadband connection could theoretically reach download speeds of 150 mbps and upload speeds of 70 mbps, which would allow HD video streaming, for instance, without lag or waiting time. That fast!

Here is the thing with LTE frequencies: They could be anywhere from 700 mhz to 2100 mhz. Really, LTE frequencies are not limited to 700 mhz.

Based on official figures, PLDT and Globe together already cornered 84 percent of those LTE frequencies, meaning, they have more LTE frequencies than San Miguel.

Therefore, contrary to the claims of PLDT, San Miguel could never dominate the LTE frequencies, simply because PLDT had more of them than San Miguel all this time.

Yet, while it already had the biggest share of the LTE frequencies, even bigger than rival Globe’s, PLDT has been raising hell to force the Aquino (Part II) administration to confiscate San Miguel’s LTE frequency.

If it was not for lack of LTE frequency, what then could be the real reason behind the PLDT tantrum?

For starters, let us take a look at the Internet service in other countries in Asia.

For the longest time now, telecom companies in Asia have been providing first-rate broadband service—much better than the Internet service of telcos in the Philippines. The Philippines had and still has the poorest Internet service in Asia.

A survey done by international hi-tech company Ookla, which could compute the speed of Internet connections in almost every part of the globe, noted that the Philippines had the second slowest Internet speed in Asia.

Our average Internet download speed was only 3.64 mbps (megabits per second), compared to more than 122 mbps in Singapore.

Among the 22 Asian countries in the Ookla study, we beat only Afghanistan, which was not even that far behind us at 2.52 mbps.

We also had one of the most expensive Internet services in the world.

Worldwide, the price of Internet connection was between $5 per mbps (Hong Kong) and $6 per mbps (Australia).

In comparison, based on the Senate hearings last year, which were conducted to find the reasons for the pathetic Internet service in the country, the cost of Internet connection here could go from $25 to $70 per mbps.

Out of 202 countries in the world, the Philippines ranked 161th in terms of Internet service.

Here is the thing—most of those Asian countries with much cheaper and faster Internet service than the Philippines did not even use the 700 mhz spectrum (the object of the PLDT tantrum!)

While advanced countries like the United States, Canada and Australia already started using the 700 mhz frequency for broadband service, in Asia, only Japan and Taiwan have rolled it out for the Internet.

Singapore—with its Internet speed at more than 122 mbps—does not use the 700 mhz frequency up to now.

Mobile companies in Singapore use other LTE frequencies— i.e. the 900 mhz, 1800 mhz and 2500 mhz, the very same frequencies cornered by PLDT and Globe.

The telecom sector in Singapore simply plowed back into the business portion of their income over the years to upgrade their Internet service.

That, perhaps, would not be something that we could also say about PLDT, although at the end of the day, inexpensive and fast Internet service would only be a question of upgrading its system.

From what I gathered, the cell sites of PLDT, for instance, are not all equipped for 4G, the latest standard in broadband service.

Both PLDT and Globe admitted they would have to put up more cell sites—tens of thousands more—to upgrade the coverage and the capacity of their Internet services.

Look—in this country your Internet connection would indicate “GPRS” or “3G” or “LTE,” which meant that your network (either PLDT or Globe) still used some outdated technologies. In short, they would have to upgrade.

It was not—never—about the 700 mhz frequency, period.

And so the question is this: What did PLDT do with its hundreds of billions of pesos in income from its customers all these years?

In the past 10 years, from 2005 to 2014 (the latest year of available data), PLDT posted a whopping net income of over P370 billion.

You would think PLDT could have used part of those billions to upgrade its service.

Based on its own financial statements, a good part of the income went to dividend payments, accounting for 86 percent of total income of about P325 billion.

If you would do some more digging, you would probably arrive at a figure of almost P210 billion.

That would be the amount of PLDT dividend payments that went to foreign groups! That much gone! Out of the country!

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TAGS: Business, competition, Globe, Internet, internet speed, LTE, PLDT, slow internet, telecom
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