“Is it freezing? Is that [internet] dial-up?” Mark Averilla, a Filipino content creator known as Macoy Dubs, jokes about slow internet speeds in one of his many TikTok parodies about life in the Philippines. It’s funny because it’s true. Today, most people need a stable connection to go about daily life, but the internet in the Philippines is notoriously slow.
While it’s not as bad as dial-up internet from the early 2000s, download and upload speeds in the country still lag behind its Southeast Asian neighbors. For fixed broadband, the Philippines has an average download speed of 32.37 megabits per second (Mbps), which puts it at around 100th place in global rankings. Meanwhile, Thailand and Singapore rank in the top three, with 220Mbps and 247Mbps, respectively. The irony is that fixed broadband plans in these two countries cost about the same as the Philippines, based on a report by The World Bank. Besides its snail-paced speeds, internet connectivity in the Philippines is also among the costliest in the world. A 2020 Digital Quality of Life Index ranked the Philippines 82nd in terms of internet affordability out of 85 countries.
The high cost and low service quality offered by internet providers has been exasperating for Filipinos, believed to be some of the most social-media active people. This is especially true now, as the world grows increasingly digital.
Christian Rillera is the 26-year-old founder and CEO of online third-party logistics company T & C Logistics. He provides trucking and delivery services to small businesses, which are bookable through an app. But he regularly encounters internet connectivity problems, which frustrates his customers and impedes his business.
“Our customers are booking online. So when they book online, even if they do have internet in their area [but we don’t], we cannot receive it. [If] we don’t receive it, we cannot serve them,” Rillera told VICE World News.
For Rillera, a patchy internet connection means a loss of about $1,000 per week. He said that whenever he calls their internet provider’s customer service hotline, they put him on hold for 30 minutes and ask him to wait until they file a report regarding his complaint.
There are many factors that contribute to the inadequate internet services in the country, particularly the lack of competition in the industry. Right now, two companies are basically running the telecommunications scene — Globe Telecom and the Philippine Long Distance Telephone Company (PLDT) — both owned by powerful and long-established conglomerates. There are smaller players, but they only offer fixed broadband plans and not mobile internet. Because competition is limited, experts say that there’s little incentive for these companies to improve infrastructure and services.
“If your subscribers don’t have any choice but to avail of your services, you can thrive even if you don’t improve your service. Or even if you don’t spend too much on making more investments or expanding your network,” Mary Grace Mirandilla-Santos, a Philippine-based Information and Communications Technology analyst, told VICE World News.
The main reason why competition is sparse can be traced back to an old law. In 1995, the government implemented the Public Telecommunications Policy Act of the Philippines, supposedly to improve the country’s public telecommunications networks. It was intended to promote a “healthy competitive environment…with the end in view of encouraging their financial viability while maintaining affordable rates.” However, it also required operators to build 400,000 telephone lines, which experts say is expensive, unprofitable, and outdated as an investment. This made it so that only cash-rich conglomerates could meet the guidelines, and new players are disincentivized to enter the market.
“It eventually became a barrier to entry,” Mirandilla-Santos said. “It requires a company to be big enough to not only have the resources but the temerity to actually go through that process.”
Telecommunications is considered a public utility and in the Philippines, public utilities must be owned, operated, and controlled by Filipino citizens or corporations that are at least 60 percent Filipino-owned. This makes it difficult for foreign players to enter the market. At the same time, the government also treats the internet as a value-added service. This means suppliers are free to provide the service on their own terms. The internet would have to be identified as a basic service for the government to regulate it.
The country’s regulatory landscape also makes it difficult for internet service providers to put up the necessary infrastructure. A single cell site can take as much as eight months to build, with much of that time spent securing government permits. There are around 18,000 telecom towers installed across the Philippines. The country would need 50,000 more for optimal coverage. Since most Filipinos rely on their mobile phones to access online services, these cell towers are crucial in providing connectivity to the masses.
This creates a disparity between those who have internet access and those who don’t, one that is emphasized more so now that COVID-19 has moved much of the world online. There are now posts circulating of Filipino children in rural areas climbing mountains to get an internet signal, just so they can attend classes or submit assignments. And because connectivity isn’t cheap, many families are making sacrifices to accommodate the new normal.
Susana Lebria, a mother of seven, uses money meant for food for mobile data her children can use for classes. Two dollars can buy the family one week of data or two kilos of rice. Education wins over hunger in the Lebria household, and yet connectivity remains an issue.
“Poor people like us work hard to afford the internet, so how I wish our efforts would be worth it. We are already left behind. Without internet, we will fall even further,” Lebria said.
The pandemic has pushed Filipinos to the limit, and President Rodrigo Duterte responded to the issue with a threat to the telcos. “I might just as well close all of you, and we revert back to the line telephone. I will revoke your license. I will expropriate it to the government,” he said in his 2020 State of the Nation Address (SONA).
Set to challenge the existing duopoly is DITO, which was allowed to operate in the Philippines in 2019, and is expected to launch this year. But this came with its own controversy. Although owned by a Filipino businessman, it is backed by a state-owned Chinese company, sparking security concerns.
Meanwhile, amid calls for better connectivity in the new normal, Globe and PLDT have said they would provide better internet nationwide, and accelerate the rollout of cell sites in the country.
Globe and Smart, PLDT’s wireless communications arm, announced their plans to launch 2,000 new cell sites or towers each in 2021. Just recently, a Globe subsidiary closed a $2 million investment with Singapore-based space tech startup Transcelestial Technologies, which uses wireless laser communication technology in lieu of cell towers and other physical infrastructure. The move is said to address the last-mile and global bottleneck issues that telcos face in the Philippines.