The Real Reason Internet Access in PH is Slow and Expensive

The United States places 8th in the global speed ranking that is topped by South Korea, Japan and Hong Kong, who are followed by the European nations of Latvia, Switzerland, the Netherlands and the Czech Republic.

The United States places 8th in the global speed ranking that is topped by South Korea, Japan and Hong Kong, who are followed by the European nations of Latvia, Switzerland, the Netherlands and the Czech Republic.

Here’s one thing that the Philippine media won’t tell you why Internet access in the country is still crappy, slow and expensive. It’s because of our protectionism and restrictive economic policies that repel or scare foreign investors and benefit only the oligarchs, cronies and politically connected corporatists.

The country’s media and so-called intellectuals stay mum on this issue, because they’re either politically clueless or they simply want to keep the people blissfully ignorant.

When it comes to this country’s economic prison, the only thing to blame is our protectionist, semi-socialist Constitution that is undoubtedly out of touch with economic and political reality.

Globalization, which is the ultimate, logical result of technological development and of many countries’ free market reforms and openness to global trade, is something that the country’s constitutional framers ignorantly missed in 1986. Those who drafted the New Charter, who were undeniably highly schooled (not educated, because there’s a big difference between schooling and education), probably thought people in the future (which is today) would be as stupid and naive as they believed they were in the 1980s.

Indeed, the framers were as ignorant about technology and global business as the protectionist socialists today.

Now look at the illustration below that shows how economically open countries provide benefits to their people in terms of fast and less expensive Internet access.

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That simply shows the high price of our restrictive policies and protectionism. It hurts every common tao in the Failippines, and it only benefits the protected oligarchs and cronies.

Protectionism leads to oligarchs and cronies cornering the country’s wealth. It means lack of competition, and lack of competition has painful economic costs.

This makes me think those who drafted the Constitution should be publicly executed for crimes against Filipinos.

In the Philippines, you need to pay $25 per month to have a 1mbps internet connection (according to Internet sources). There’s this company (Pinoy Telekom) that charges P35 per day for 2 and 5mbps. That’s P1050 per month or $26.

Yes, Internet access here is as slow as our economy. It seems that it cannot go further than what a global economy requires due to our protectionism and restrictions. We’re indeed forever confined in an economic prison.

From this source:

Filipinos may boast of being in the world’s social network hub, but access to the Internet remains low in the Philippines compared to other countries, a recent United Nations (UN) report showed.

Of the total Filipino Internet users, 75 percent accessed social networks in 2011, the UN Broadband Commission for Digital Development said in its report dubbed the “State of Broadband 2012.”

The Philippines also tops the global average of 60 percent social network penetration, even if only 29 percent of Filipinos are able to use the Internet as of 2011.

The country ranked 100th out of 177 in terms of Internet access either through fixed or mobile connections, the report said.

As of last year, there was an average of 1.9 fixed Internet connections per 100 people in the Philippines.

The country ranked 101st in this indicator, lagging behind Singapore 25.5; Malaysia, 7.4; and Vietnam, 4.3.

South Korea has one of the fastest and cheapest internet services because of free market competition. But why is South Korea’s Internet faster and cheaper than broadband connections in the Philippines and even in the United States? The answer is: It’s because of free market competition.

From this CNN article:

Korean competition

Countries with fast, cheap Internet connections tend to have more competition.

In the U.S., competition among companies that provide broadband connections is relatively slim. Most people choose between a cable company and a telephone company when they sign up for Internet service.

In other countries, including South Korea, the choices are more varied.

While there isn’t good data on how many broadband carriers the average consumer has access to, “I think we can infer that South Korea has more [competition in broadband] than the United States,” Faris said. “In fact, most countries have more than the United States.”

Some academics, including Yochai Benkler, co-director of the Berkman Center, have criticized the U.S. government’s broadband plan as not doing enough to create the kind of competition that is present in other countries.

This is something that our lawmakers and political planners should think about.

However, it seems that the government’s solution to poverty issue is: Give the peasants more condoms!

7 thoughts on “The Real Reason Internet Access in PH is Slow and Expensive

  1. Pingback: Competition is Good; Regulation is Evil! - VINCENTON BLOG

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  3. This is the first post I’ve seen which hits the nail on the head.
    It’s pure protectionism.

    – The 60% filipino ownership turns off a lot of potential foreign Telcos from entering the market. It’s a global market. T-mobile is everywhere. So is Orange. So is Vodafone. Good things happen when a global player enters the Philippines. We get plans like $50/month for unlimited data and unlimited text worldwide. No more extortionate roaming charges when traveling. For BOTH incoming/outgoing calls/text. It’s time to go global and scrap these antiquated protectionist policies if we want our internet speeds to be world class.

    – Congress requires all Telcos to apply for a Telco Franchise, otherwise known as a Certificate of Public Necessity and Convenience. By some accounts, this costs around P100M in bribes. And some Telco Franchises are even more expensive than others. (PLDT has a “super franchise”, for example). Needless to say, this franchise requirement should be scrapped completely. That the Bam Aquino Inquiry on slow internet hasn’t even figured this out is APPALLING. Sorry, Congressman, if you want to solve the problem, you need to be willing to kill the cash cow of your fellow Congressmen. That’s the only way.

    – There aren’t enough LTE frequencies out there. Why? Because they’ve been cornered by Raymond Moreno of Liberty Telecoms (a family friend – sorry, sir). Mr. Moreno sold out to SMC, and Liberty became a joint venture of SMC and Qatar Telecom. You may recall that Liberty’s subsidiary, Wi-Tribe was doing quite well many many years ago providing fast wireless internet. It died off after a few years as the Wi-tribe network started slowing down. I’m guessing they were using SMC’s Microwave network for their backhaul and clearly, they needed to upgrade to Fiber. What is clear is that QTEL wanted to inject more funds into the venture, and SMC refused to do so, preferring to find a find a buyer for Liberty. With the partners fighting, the company fell into disarray. It has been under corporate rehab ever since, and these valuable much needed frequencies have been idle. The government need to find a way to GET these frequencies back and lease them to Telcos that need them. Perhaps Congress can pass legislation that if frequencies are unused, or are under utilized, the government has a right to buy back these frequencies (perhaps at the original purchase price). Or perhaps Liberty should be forced to auction off these frequencies, and keep a portion of the proceeds. (I say only keep a portion, as we want to prohibit Telcos from squatting on frequencies in the future and waiting for their values to appreciate).

    – It’s not easy to install fiber into buildings or the home. If you’re a Telco, you’ll need to get Meralco to allow you to use their poles to deliver Fiber to some buildings – except that Meralco’s single biggest shareholder right now is PLDT. So a Telco is forced to dig under roads and install its own FIBER! in Fort Bonifacio, for example, PLDT has an exclusive arrangements with BGC, so everyone else is forced to dig!

    Joel Disini
    CEO, DotPH

    • Thanks for the very informative comment. Plus, I believe most global tech companies and investors always want a controlling stake in a company. For example, I don’t think Google would invest here and offer its Google Fiber service without securing a controlling stake.

  4. IS THERE ANY OTHER WAY TO GET A DECENT INTERNET CONNECTION? I am paying PLDT for a 2.5 Mbps connection & I am getting less than 1.0 Mbps.
    Charles Ruzic
    Entrepreneur, System Engineer, Physicist, Mathematician, Inventor,
    Binary Options Trader, Web Site Development, Technical Writer
    9004 Manlansan St TCH3
    Tagaytay, Cavite, Philippines 4120
    +63 46 483-0662 Philippine Phone
    +63 925 804 2341 Philippine Sun Cell
    SKYPE: Charles.Ruzic & chuck.ruzic
    +1 (610) 245-3198 US PHONE
    +44 702 402-1093 UK Phone forwarded to +63 46 483-0662
    +44 702-409-1258 2nd UK phone forwarded to +63 46 483-0662
    EMAIL: free_thinker_2@yahoo.com

  5. Pingback: Philippine Telcos Fooling Filipinos, Here’s How | Power of the People for Change

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