Why The Philippines Needs a Third Telco Player

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Internet and social media have been abuzz with talks on the emergence of the Mislatel Consortium as the lone qualified bidder among 10 groups who placed their bids to be the third telco player in the Philippines.

With the entry of a third telco player in the works, what would it mean for consumers and end users? Here's a quick lowdown on the government's selection process, internet speed in the Philippines, and things that we can expect once the duopoly has been broken.

What You Need To Know About The Third Telco Player Bid

For the longest time, there has been a constant clamor among Filipinos for faster broadband speed and more a more affordable and reliable data service.

When President Rodrigo Duterte assumed office in 2016, he issued a stern warning to telcos that if they wouldn't be able to provide a faster internet service, the playing field shall be opened to foreign investors who might be able to do a better job.

After overcoming several roadblocks, the bids for the third telco player slot was opened last November 7. Racking in 456.80 out of 500 points, the partnership of Davao-based Udenna Corp. and China Telecommunications Corp emerged victoriously.

Criteria for Selection Requirement Mislatel's Commitment
National Population Coverage Service at least 10% per year or 50% of the national population by the end of the 5th year. 84% of the population by the fifth year
Capital and Operational Expenditure Invest not lower than P40B for the first year and P25B for succeeding years (total of P140B). P40B - P140B investment for the first year (total of P257B by the fifth year)
Minimum Average Broadband Speed Provide a broadband speed of at least 5 Mbps up to a minimum average speed of 55 Mbps at most. 5 Mbps minimum and 55 Mbps maximum speed for the next five years

PH Internet Penetration Rate

There is no doubt that Filipinos love to go online. Out of the 105.7M total population, 67M or more than 63% are internet users and are active on different social networking sites.

Based on the "Digital in 2018" report of Hootsuite, a US-based social media management platform, Filipinos spend an average of 9 hours and 29 minutes a day online.

Known for having close family ties and a great sense of community, Filipinos indeed thrive on staying connected with one another, whatever the channel may be.

Current State of Broadband Speed In the Philippines

Why The Philippines Needs a Third Telco PlayerSource: Ookla Speedtest Global Index (September 2018)

The Philippines ranks 99th out of 124 for mobile broadband speed with a download speed of 13.83 Mbps and upload speed of 6.33 Mbps. As of September 2018, global average speed is at 23.64 Mbps for upload and 9.34 Mbps for download.

For fixed broadband, our country currently holds the 84th spot out of 130 with a download speed of 18.09 Mbps and upload speed of 15.87 Mbps. Global average speed for fixed broadband upload and download is at 18.09 Mbps and 15.87 Mbps, respectively.

Current Duopoly In The Industry

Before PLDT acquired Digitel in 2011, there were actually 3 main network providers in the Philippines with quite an aggressive competition - Globe, Smart, and Sun Cellular.

After said merger, PLDT regained its position as a key industry player but left consumers with only two choices.

What To Expect Once The Third Telco Player Comes In

More choices for consumers
With only two providers available, users are currently left with practically no choice. Once dissatisfied, they will simply switch to the other network with no questions asked.

Networks would be compelled to up their ante in terms of customer care initiatives. With the presence of a third telco player, there will be two other choices left once a customer gets frustrated with a network's service.

Fiercer competition among networks
Currently, the two existing providers are somewhat doing reactive marketing by responding with a promo that is almost the same or equal to the value being provided by their competitor.

Facing a three-way battle once the third telco enters the picture, all three would be driven to think out of the box and try to come up with more unique offers to their customer base.

A potentially more flexible pricing scheme
If you look closely at existing call, text, and data bundles from the rival networks, its pricing scheme is structured the same way and is not being disrupted by any of the two parties.

By having a third telco player with the potential to bring something new to the table and a fresh take in terms of doing business, there's a chance that somehow, packaging of services, including its pricing will be improved for the benefit of end users.

 

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Written by

Stef Reyes