The future of telecommunications in the Philippines

The National Telecommunications Commission expects telecommunications operators to thrive even more in the post-pandemic era. CONTRIBUTED PHOTO

The telecommunications sector has been a major driver of economic development in the Philippines since the installation of the first telephone in the country. The advent of the Internet, the opening up of the sector to other players and the generalization of the use of mobile phones are milestones that have made telecommunications an essential element of daily life.

Online transactions have increased over the past year and a half as people adjust to travel restrictions due to the Covid-19 pandemic. Communication devices have become virtual lifesavers for safety and comfort in difficult times and as a result, the telecommunications sector is now more prominent than ever in the business of society and industry as well. than in relations with the rest of the world.

Given its importance, there is always an interest in how telecommunications will perform in the years to come, how new technologies will impact its performance, and what issues need to be addressed to make the industry progressive and competitive.

Here is a brief overview of the state of Philippine telecommunications and the direction authorities and stakeholders are pursuing to improve the efficient and timely delivery of the right services.

Latest developments

President Rodrigo Duterte has granted a 25-year franchise to Dito Telecommunity Corp., the country’s third largest telecommunications player after PLDT and Globe. The new telecommunications company is owned by Udenna Group and China Telecom and is seen as the administration’s offer to shake up competition in the industry.

Dito, which hosted its commercial launch in Cebu and Davao, has pledged to increase internet speeds, starting at 27 Mbps this year and increasing to 55 Mbps by 2025.

The Department of Information and Communications Technology (DICT), meanwhile, issued Departmental Circular 008, more commonly known as the One Tower Policy, which sets out guidelines for the co-location of l infrastructure of passive telecommunications towers. The policy aims to encourage telecom operators and Internet service providers to share cell towers with the aim of expanding the base of common towers and accelerating the deployment of the Internet across the country.

The DICT also supports a bill introduced in the Senate that requires telecom operators and ISPs to reimburse outages or service interruptions for an aggregate period of 24 hours per month. The proposed credit also applies to prepaid subscribers.

Future prospects

PLDT and Globe are continuing their initiatives to upgrade their respective infrastructures. PLDT’s network modernization program is actively pushing the switch from copper to fiber while the subsidiary Smart is deploying WiFi hubs across the country in partnership with Google. Globe Telecom, meanwhile, has more than 1,600 cell sites across the country, paving the way for a next-generation platform that is expected to boost production, improve productivity and strengthen the country’s competitiveness. PLDT, Globe and Dito are also developing network sharing agreements to accelerate the adoption of new technologies like 5G and artificial intelligence.

The Covid-19 pandemic has raised the profile of the telecommunications sector, highlighting its function as a provider of essential services that has enabled businesses to continue providing goods and services amid bottlenecks and restrictions. With this in mind, the National Telecommunications Commission expects telecommunications operators to prosper even more in the post-pandemic era. Factors that could ensure success include working from home and the digital transformation of most businesses – accelerated by the pandemic – as well as the introduction of breakthrough innovations such as 5G.

Analysts have updated forecasts of market opportunities to include not only the usual key players – business process outsourcing and financial sectors – but also the healthcare and education sectors. Transactions using electronic payment and fintech platforms are expected to continue to grow. The Bangko Sentral ng Pilipinas wants 70% of the population to use fintech solutions and 50% of all retail purchases to be paid through digital platforms by 2023.

The cost of internet access, however, could remain out of reach for some, especially those in low-income sectors who are likely to have lost their jobs or livelihoods as a result of the pandemic.

Another issue is that China-backed Dito has officially been given the green light to set up cell sites inside military camps, raising fears that state secrets may be compromised.

As of December 2020, the government had only covered 882 of the 3,000 sites targeted under Phase I of the Free WiFi in Public Places project. During the last Senate hearing on the subject, the main actors in charge of the implementation were singled out. Phase II for an additional 3,000 sites would have started this month.

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About Ferdinand Caldwell

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