Pinoys start feeling the Telstra effect as incumbents launch fresh services

In Photo: The newly built Telstra building at the Mall of Asia grounds in Pasay City.

By Lorenz S. Marasigan

SUBSIDIARIES of multimedia conglomerate Philippine Long Distance Telephone Co. (PLDT) have teamed up to intensify their efforts to further cement the company’s image as the country’s top Internet services provider, as the group prepares for the entry of a third core player seen to shake up the local market.

Smart Communications Inc. unveiled a new product that allows users to enjoy up to 10 megabits per second (Mbps) of speed with a monthly data allocation of 50 gigabytes (GB). When upgraded, subscribers under the Speedster Fam Plan 1299 can allocate 6GB of data to their mobile-phone lines, which they can use even outside the home.

Customers may get up to four Smart mobile-phone lines bundled with their Speedster Fam Plan all billed under one subscription.

Smart Executive Vice President Ariel P. Fermin said the new product, which “humanizes” technology, will help drive the company’s campaign of growing its broadband business further this year.

“It’s certainly not just about the shared gigabytes, but we humanize technology by empowering our customers to live their digitally driven lives to the fullest and strengthen the connections they have with their loved ones despite physical distance through the power of digital and mobile technology,” he said.

International Data Corp. (IDC) Philippines analyst Alon Anthony D. Rejano said that, while this strategy is typical for a telecommunications company to attract new customers at the onset of the year, this move may also be seen as a preparation for the entry of Telstra Corp. Ltd. in the Philippine soil.

“Launching new products and services could be a good strategy made by PLDT in preparation for Telstra’s entry, although, we’ve been seeing product launches at the start of the year to have users subscribed to a plan for a year,” he said.

Rejano noted that this is one of the early effects of a more competitive market—companies offering better services at lower costs.

“It’s a good thing for consumers and for everyone, and we hope that the current situation of the Philippine Internet connection will continuously improve,” he said.

Studies conducted by Ookla, an Internet metrics provider, showed that the Philippines has the second slowest average download speed among 22 countries in Asia with an average speed of 3.64 Mbps.

It ranked 176th out of 202 nations around the world. It is eight times slower than the global average broadband download speed of 23.3 Mbps.

Separately, cloud services provider Akamai Technologies found that while the Philippines might have improved its connection by a percentage point, its overall ranking in Asia still remains at No. 13 out of 15, or the third worst connection in the region.

Filipinos, according to the first quarter of 2015 report of Akamai, enjoyed an average download speed of 2.8 Mbps during the period under review. Trailing behind are India and Indonesia with 2.3 Mbps and 2.2 Mbps average speed, respectively.

Telstra is expected to enter the Philippine market sometime this quarter through San Miguel Corp.’s Bell Telecommunications Philippines Inc., with the promise of providing better Internet services than the incumbents.

Experts believe that such a proposition may be achieved, given the frequency band assets that San Miguel currently holds.

San Miguel Group operates spectrums under the 800-megahertz (MHz), 900-MHz and 1,800-MHz bands. It also holds the right to operate services under the 700-MHz band—a precious asset that the International Telecommunication Union (ITU) believes should be harmonized.

The harmonization of the asset, tagged as a “digital dividend,” means that it should be allocated to different providers. The frequency band allows for greater coverage, hence, it can penetrate into buildings and enclosed spaces thereby lessening the cost of building more base stations. Hence, the demand for the recall and auction of the asset.

Currently, San Miguel Corp. holds the right to operate the whole band: with Liberty Telecoms Holdings keeping 80 MHz, High Frequency Telecommunications with 10 MHz, and New Century Telecommunications 10 MHz.

Globe Telecom Inc. and Smart are both seeking portions of the frequency band, citing their subscriber base as a legitimate reason for the reallocation of the spectrum. San Miguel, however, is not too keen on sharing this asset.

Pundits believe that a recall and tender of the 700-MHz band from the diversified conglomerate will prove to be a risk that Telstra will have to take, should it decide to pursue its investment in the Philippines.

Telstra is known to be one of the first few telcos in the world to have successfully capitalized on the 700-MHz band.

“We are now at the final stages of the talks. We should launch really soon,” a ranking San Miguel executive who asked not to be named, said, referring to the signing of the joint-venture contract between the Filipino and Australian companies.

Image credits: Alysa Salen


1 comment

  1. Smart Telecoms is a Lie. Here in Caloocan City, I just bought a LTE capable Smart Sim but there’s no LTE coverage and only HSPA+ to my surprise their speed of HSPA+ here is only 0.55Mbps DL and 0.05Mbps UL. Smart is only good at platforms and promises but never good long term execution.

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