The government doesn’t want another “San Miguel” situation—that of a startup third player in the local telecommunications industry being swallowed up by the existing duopoly—and is looking for a company that “has the financial and technical clout to really compete” in the sector.
Undersecretary Eliseo Rio of the Department of Information and Communications Technology said Wednesday the government wants the third telco player “to be robust enough financially and technically to be able to compete and give the incumbent telcos a run for their money.”
Rio also reiterated to the cable news channel ANC that the government wants the third telco to focus on fixed line broadband instead of offering cellular data, the pillar of the current offerings of market leaders Smart Communications and Globe Telecom.
President Rodrigo Duterte has said he wants the third telco player to be up and running within the first three months of 2018. He has asked China to invest in the sector, and China Telecom has responded by saying it is studying a possible investment in the Philippines.
The DICT officer-in-charge also allayed concerns that allowing the Chinese to own a stake in the country’s telco industry may compromise the Philippines’ cybersecurity, noting that both Globe and Smart have already partnered with Chinese tech firm Huawei to upgrade their networks.
“Instead of starting to compete with the duopoly in mobile services, where they are already strong with two decades of infrastructure building and more than 105 million subscribers, the third player will compete initially in the fixed services, where the duopoly is weak, with only 17 percent establishments, homes and offices having internet access,” Rio said earlier in the week.
He said the third player could use the last mile infrastructure of electric companies that would team up with it.
“In case of Metro Manila and other densely populated urban areas, there are now technologies that offer residential customers high-speed Internet access through the air. The service is a fast and affordable alternative to cables and fixed lines, that can give symmetrical 100 Mbps [megabits per second] download and upload speeds to homes. And frequencies are available for this,” he said.
“Having more fixed line access would greatly decongest the mobile network of Globe and Smart, improving their QoS [quality of service]. So the immediate solution to improve internet speed and cost is to provide more fixed line access,” Rio said.
He said the government could provide the new player with a big market because it would subscribe at to least 250,000 free Wifi access points nationwide in compliance with Republic Act No. 10929.
“The third player won’t have to worry about its International Gateway Facility or their nationwide backbone because the government will take care of this. So initially, the third player will deal mostly with fixed access to the internet, bringing fast and low cost internet to even the remotest areas of the country, where small BPOs can exist, on-line government services will be available, health and education services will greatly improve,” Rio said.
