Duterte asks China help to break Philippine telco duopoly

Presidential spokesman Harry Roque said that President Rodrigo Duterte (right) told Chinese Prime Minister Li Keqiang (left) he was giving China "the privilege to operate the third telecommunications carrier in the country".
Presidential spokesman Harry Roque said that President Rodrigo Duterte (right) told Chinese Prime Minister Li Keqiang (left) he was giving China "the privilege to operate the third telecommunications carrier in the country".PHOTO: AFP

Raul Dancel

Philippines Correspondent

In Manila

President Rodrigo Duterte is seeking to break the Philippines' telecommunications duopoly with an offer for China to come in and set up a third player.

Presidential spokesman Harry Roque said on Monday (Nov 20) that Mr Duterte told Chinese Prime Minister Li Keqiang during their meetings here last week he was giving China "the privilege to operate the third telecommunications carrier in the country".

The Philippines has among the slowest internet connection speed in the world.

Average connection speeds were ranked at 100th in the world, at just 5.5 megabits per second, slower than most countries in Asia, including Sri Lanka and Vietnam, according to Akamai Technologies' Global State of the Internet Report in June (2016).

Mr Duterte has blamed that on the dominance of the nation's two largest carriers, Globe Telecom and Smart Communications, a view shared by many in the country.

Mr Roque also announced that the government also signed with an affiliate of social networking giant Facebook to undertake what is called the "Luzon Bypass Infrastructure".

It involves two cable landing stations connected by a 250km long cable network corridor that will provide direct connections from the Philippines to internet hubs in the United States and Asia. That will give increase potential bandwidth speed in the Philippines up to 2 terabits per second.

Mr Roque said the Facebook deal and the entry of a third player from China means "the duopoly is about to end. Consumers can look forward now to better telecommunications, not just in terms of cellular technology, but also in terms of internet speed as well as access.

"This is the latest instance of the President proving that he has the political will to do what is necessary to benefit the Filipino people," he added.

At least three Chinese firms were reported in February as having taken an interest in competing with Globe and Smart.

This will not be the first time the government has partnered with a Chinese firm to improve online connectivity here.

In 2007, it signed a multimillion-dollar deal with ZTE for a national broadband network but the project was riddled with anomalies, including including allegations of overpricing and corruption among officials who brokered the deal.

Past efforts to break the Globe-Smart duopoly have floundered.

Australia's Telstra teamed up with local conglomerate San Miguel to form a third player. But the venture failed, after Globe and Smart refused to share their internet infrastructures.

There are studies that conclude, however, that the government bureaucracy is as much to blame.

"While the general perception of the public is that internet access here in the Philippine is slow and expensive, we could not be the world number one BPO voice service provider if our internet speed is slow and its cost is expensive," said Mr Eliseo Rio, acting head of the Department of Information and Communications Technology.

He said the government has been slow in approving applications for more cell sites. That result is that the Philippines only has 20,000 such sites compared with Vietnam's 70,000.

"We need 25 government permits to construct one cell tower," he said.

That capacity is too small for the volume of online traffic now coursing through mobile devices.

""Now we have a lot of catching up to do," he said.

rdancel@sph.com.sg