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Our foreign-run Internet the lousiest in Asia; Duterte should take on the telco oligarchs

EVERY quarter since 2009, the Massachusetts–based Akamai Technologies releases its authoritative “State of the Internet” report, and its most recent edition, for this year’s first quarter, point to a stark reality: We have the lousiest Internet service, and despite the jumps in technology in seven years, our average Internet speed, at 5.5 Mbps has barely increased.

PLDT and Globe are run by the state firms NTT of Japan and Singtel of Singapore. Japan and Singapore have the highest average Internet speeds in the world, at 20 Mbps. But we have the slowest Internet in Asia.
China, Vietnam and Indonesia have all overtaken us in Internet speed. In the entire world, we can boast that our Internet is better than only seven countries: Namibia, Nigeria, Iran, and four small Latin American nations.

The last in percent of connections with Speeds of more than 4 mbps

What’s so different about our telcos from those in Asia? Nearly all of them are owned and run by state corporations, even if some of them, like NTT and Singtel have in the past 10 years taken minority foreign shares.
NTT and Singtel in fact have grown into global firms as they were coddled by their governments to be monopolies in their countries. And only when they had already grown into behemoths, did their governments pay lip service to a free market, and allowed foreign firms to come in—which however control only a small share of their markets.

China and Vietnam have been clever in having several telecom state firms to compete among themselves. China has China Mobile, China Unicom, and China Telecom. Vietnam has Vittel, owned by its Ministry of Communications, while the two other telcos, MobiFone and Vinaphone, are subsidiaries of the Vietnam Posts and Telecommunications Group.
In the Philippine case, the biggest telco is PLDT, whose biggest owner is the Indonesian magnate Anthoni Salim, and the next largest, which provides its technology needs, is NTT. The other member of the duopoly, Globe, has Singtel as its biggest owner, and the old-elite property conglomerate Ayala as the second largest shareholder.

Is it still debatable that the priority of foreign firms, most especially if they are listed firms like Salim’s First Pacific Co. Ltd. and Singtel, would be to remit as much profits to their headquarters, rather than provide the most efficient service? In fact, I had computed in my book Colossal Deception: How Foreigners Control our Telecom Industry that First Pacific, since 2000 has, based on its reports to the Hongkong authorities, received $1 billion in dividends from its subsidiary, PLDT.

The profit motive is paramount to our telco firms, rather than public service, which is required almost by definition of a public utility firm.

That is one reason why rather than doing the obvious – investing in better technology and telecom infrastructure – PLDT in 2014 invested $362 million, or P18 billion, in a German Internet firm, Rocket Internet. Rocket isn’t even into hard technology, but merely specializes in setting up Internet-based businesses like online food delivery and retailing. Rocket turned out to be a lemon, such that in 2016, PLD booked P5.4 billion losses. And with such huge losses, PLDT investments in building better Internet infrastructure are of course reduced.

Duterte’s announced agenda to weaken the oligarchs’ hold on the economy—and on politics—will have the most impact if he prioritizes as his targets our telcos. Economists have pointed out that a nation’s GNP growth in this modern era owes much to the level of its telecom and internet sectors.

It is not coincidental that the richest nations on earth now—US, Japan, Germany, France, and the UK—have the most developed and efficient telecommunications.
While for the entire country, China’s internet speed averages just 8 Mbps—just a bit faster than our 6 Mbps—these are really at least 20 Mbps in its major cities such as Beijing and Shanghai. As a result of its vast improved internet infrastructure, China’s major cities have been fast moving into a cashless economy, by which payments are made through cellphones.

In our case, how can we do that if cell signals aren’t even reliable?