Hence, the government must fast-track the selection process for the third telco player, pass laws that promote robust and fair competition, and reduce bureaucratic red tape, according to industry stakeholders polled by the BusinessMirror.
They were responding to late Monday’s Open Signal report that showed Manila landed at the bottom spot in a 4G availability survey of 12 capital cities in the eastern region of Asia.
Based on Open Signal’s report, 4G reach in Manila from March to May 2018 is the most dismal of 12 capital cities in the eastern region of Asia, with only 78 percent availability.
The Philippine capital was beaten by Ho Chi Minh by a percentage point and by Phnom Penh by two points. Expectedly, South Korean capital Seoul topped the latest survey with almost 98 percent 4G availability, followed by Tokyo with over 96 percent and Bangkok with 92 percent.
It could be noted, however, that Open Signal measures availability by the proportion of time users have access to a particular network, and not by geographic coverage.
‘Not surprising’
For Mary Grace Mirandilla-Santos, co-convenor of consumer group Better Broadband Alliance, the results are somewhat par for the course, given certain barriers in the buildup of network infrastructure in the capital and elsewhere.
“The results are not surprising since the country’s 4G coverage is not as extensive yet, considering the number of subscribers that wish to access the network,” she told the BusinessMirror.
She said Open Signal’s report bolsters the proposition that two telco players are not enough to serve the Philippine market.
“This is proof that having two mobile operators is not enough, and that there remain high barriers to entry and operation in the telecom and data sectors,” Santos, also an independent policy researcher, said.
Pierre Tito M. Galla, the cofounder of consumer group Democracy.PH, shared the same view. Leniency toward improvement of service due to the lack of competition could account for the results of the Open Signal report.
“This and other similar news highlight the need for more competition in the Philippine telecoms market. Without competition, the incumbents will not feel the pressure to roll out infrastructure and improve quality of service,” Galla said.
‘Not so bad’–Smart
The results of the Open Signal report—though soliciting ideas of enjoining new competition—are really not so bad, at least according to Smart Communications Inc. Spokesman Ramon R. Isberto.
“What we want to emphasize, 78 percent availability is not that bad. And my point is, it’s getting better as we speak,” he said. “We are still rolling out our upgrade of 4G in Manila, so that number is certainly higher now than it used to be.”
In the larger Metro Manila area, Isberto noted, Smart recently completed its most recent round of network upgrades in Quezon City, Marikina City, Caloocan, Valenzuela, Navotas and Malabon.
For Manila and Makati, the latest round is expected to be completed by October.
Smart has also deployed carrier aggregation technology across all of Metro Manila’s 17 cities and municipalities, paving the way for much greater speeds to an area where over 12 million Filipinos work and live.
The mobile operator also deployed over 2,000 Long-Term Evolution (LTE) sites across Metro Manila, which use low-frequency bands such as the 700-megahertz (MHz) band for wider coverage and better indoor penetration, and high-frequency bands like 1800 MHz and 2100 MHz bands for additional capacity.
To date, more than 92 percent of sites in Metro Manila have already been upgraded with LTE, based on data from Smart.
“We expect to finish Metro Manila by the end of this year—that is the base stations for both existing and new ones will have LTE.”
Smart parent company PLDT Inc. is spending P58 billion in capital expenditures for 2018 to further develop its network both for mobile and fixed line.
Globe’s commitment
Globe Telecom Inc. Spokesman Yolanda C. Crisanto noted that her group is, likewise, committed to improve the overall mobile data service in the country, noting the company’s capital outlays for the year amounting to $950 million.
“We continue to invest in networks to build capacity and build new sites to increase coverage,” she said.
To date, Globe has a total of 39,614 base stations spread across the Philippines, with over 26,200 for 4G, to support the service requirements of its customers.
But the infrastructure listed above are not enough to meet the demand of over 113 million subscribers in the Philippines, mostly in the capital and its neighboring cities and municipalities.
Crisanto said the lack of telco infrastructure in place could have been one reason Manila was the worst-performing capital in terms of 4G reach.
“4G availability means how pervasive 4G service is already in the Philippines. This is a function of not having the right amount of infrastructure relative to users in the country,” she said in a text message.
Since the last administration, Globe has been calling on the government to remove bureaucratic red tape to fast-track the deployment of more sites not only in Manila, but in different parts of the Philippines.
Based on a study made by TowerXchange, an independent community for operators, tower companies, investors and suppliers interested in emerging-market telecom towers, the Philippines lags behind its neighbors in Asia when it comes to cell-site build.
The number of unique physical cell sites in the Philippines is one of the lowest in Asia, with a combined 16,300 cell sites.
China has the highest number with 1.18 million cell sites, followed by India with 450,000 and Indonesia with 76,477 cell sites, while Vietnam has 55,000, Thailand with 52,483, Pakistan with 28,000, Bangladesh with 27,000 and Malaysia with 22,000 sites.
With 113 million mobile subscribers and only a combined total of 16,300 towers from PLDT Inc. and Globe Telecom Inc. servicing them, the Philippines has the lowest tower density score in Asia, with a meager 0.14 to Asia’s current giant China’s 1.43.
Permits, Isberto added, have always been a concern, given the number of certifications and requirements that local government units ask from telco operators for network buildup.
“It’s quite hard to roll out in an urban environment because we can only access cell sites for repair and maintenance only on certain parts of the day, we are covered by certain regulations,” he added.
But in the city of Yangon in Myanmar, where 4G was only made available about two years ago, the said protocol’s reach is at 83 percent.
“The success story of Yangon, which now has higher 4G availability than Manila, shows that opening up the market to more competition, for both local and foreign service providers, at all network segments will address the infrastructure and access gap,” Santos noted.
Myanmar awarded the fourth telco license to MyTel last year, and the telco provider started offering its services to the Southeast Asian nation in February 2018.
“The Philippines needs to create a market environment that allows as many players as possible, who can pour in as much capital expenditures and introduce as many innovative solutions as necessary to improve the availability of data services,” Santos said.
Currently, the Philippine government is in the process of selecting a third core player in the telco market.
Department of Information and Communications Technology (DICT) Secretary Eliseo M. Rio said his group is on track to meeting the deadlines it set for the selection process.
“The process is ongoing and we are on track,” he said in a phone interview.
Legislative action, Executive backing
But the search for a third telco also needs the support of lawmakers, Galla noted, saying that reforms in the telco laws could help stir healthy competition in the market.
“We call on the legislature to fast-track the passage of ICT reform bills that will enable better competition, such as the open access in data transmission bill, the mobile number portability bill, the amendments to the Public Telecommunications Act and the Public Service Act, and the spectrum management reform bill,” he said.
Recently, Sen. Sherwin T. Gatchalian urged his colleagues in the Senate to pass the three bills to ease the entry of the third telco and foster a more competitive telco environment.
The open data in transmission bill will allow the use of data distribution systems and facilities subject to fair, reasonable and nondiscriminatory terms in a transparent market.
In the Senate, the bill will allow additional telco players to enter the Philippine market even without a congressional franchise.
When passed, the mobile number portability bill will allow subscribers to retain their old numbers even after shifting to another telco provider.
Amendments to the Public Telecommunications and the Public Service laws seek to shift telecommunications services to a basic service, and further regulate the market.
“We call on the Executive, particularly the DICT, to fast-track the entry of the new major player, as well as to collaborate with other agencies and stakeholders to aggressively promote competition in Philippine telecoms,” Galla added.
Should the selection process be smooth sailing, the third telco player should be named by December. Its services are expected to be launched mid-2019.
Image credits: Mungkorn Lasonthi | Dreamstime.com, Ed Davad