IT, BPO still growing despite slow internet

Cebu’s BPO’s eTelecare.
CDN FILE PHOTO

Business will continue for those in the information technology (IT) and business process outsourcing (BPO) industries even if the Philippines has been lagging behind other Asian countries in terms of internet connectivity and speed.

However, local stakeholders believe that the situation will improve given the government’s ambitious plans to roll out more telecommunications infrastructure as well as the introduction of a new telco player in the country.

Cebu Innovation Council (CIC) President Paulo Uy said with most people now being mobile, the majority can feel the problems of the country’s internet connectivity.

“The state of mobile service in the Philippines needs a lot of improvement. I do hope that the third telco (telecommunications company) will help improve it,” he told Cebu Daily News.

Uy, who is also the director of Cebu Digital and the vice president of Azpired Inc., was reacting to the latest State of LTE report — a crowdsourced survey by OpenSignal.

Based on the report that covers the fourth quarter of 2017, while there were improvements in the availability of 4G internet and speed in the Philippines, it still remains behind most of its neighbors in Southeast Asia.

The Philippines was at 75 out of 88 countries in terms of 4G availability. On the other hand, the country ranked 85th out of 88 countries in terms of LTE speed despite the improvements from 8.24 megabits per second (Mbps) in the third quarter of 2017 to 9.5 Mbps in the fourth quarter last year, an Inquirer report said.

For his part, Michael Cubos, the immediate past president of CIC, echoed Uy’s statement that there are still a lot of things that the country must improve on in terms of internet availability and speed. He said the report of OpenSignal is not something new.

“Effective infrastructure, government legislation and regulations play a big role. It will not happen overnight but I believe it will be better next year,” he said.

“Given the current direction of the government in terms of infrastructure, introduction of a new telco player, common tower plan, and advancement of technology, it is going to be better for sure,” added Cubos, who is the managing director of homegrown BPO company Performance 360 Global Services Inc.

Breaking the duopoly

The Duterte administration is strongly pushing for a third player in the country’s telecommunications industry to break the duopoly of PLDT Inc. and Globe Telecom Inc. which were also the bases for the State of LTE report.

President Duterte wants the new player to be up and running by March but the Department of Information and Communications Technology (DICT) is targeting it to be done by May yet.

Among the guidelines set by DICT for the bidding is that the company should have a net worth of at least P10 billion. Companies from China and India have reportedly showed interest in joining the bidding.

The DICT has also earlier announced that they will be bidding out within the month a project to put up 10,000 more free WiFi access points all over the country.

At the same time, the DICT and state-owned Bases Conversion and Development Authority (BCDA) has signed a landing party agreement with Facebook for the P1 billion Luzon Bypass Project, which tapped the social media giant into putting up high-speed internet infrastructure in two landing stations in Luzon.

It is expected to bring in an additional 2 million Mbps or two Tbps of internet in the country. First phase of the project is targeted to be completed by June this year while the entire project is expected to be finished by August 2019.

‘Business as usual’

But while all these projects and plans are not yet in place, both Cubos and Uy said local industries relying on internet connection and speed will continue to thrive.

“For the industry, it’s business as usual. Take note, this slow internet issue affects mostly consumers only. The issue we have is just the cost, not speed,” he said.

Cubos explained that businesses in the IT and BPO sectors continue to have access to “very fast and reliable” internet although it comes at a greater cost.

Uy agreed by saying that there is still a premium for those who want good speed as long as they are willing to pay.

According to the State of LTE report, the Philippine’s internet speed was faster than that of Indonesia (8.9 Mbps) and India (6.07 Mbps). However, it was slower than that of Thailand (9.6 Mbps), Malaysia (14.8 Mbps), and Vietnam (21.5 Mbps).

Singapore topped the list with a speed of 44.3 Mbps.

“The fastest LTE speeds seem to have hit a plateau at around 45 Mbps. For the last several global reports, we’ve failed to see any sizable increase in 4G speeds among the top performing countries, and the Holy Grail of 50 Mbps remains just as elusive,” read one of the four highlights of the report.

Meanwhile, 4G availability in the Philippines was at 63.7 percent, which was higher than the 58.8 percent reported for the third quarter of 2017.

Availability refers to how consistently a user could access a 4G network during a given period of time.

Philippines’ 4G availability was better than Myanmar (62.5 percent) and Sri Lanka (45.3 percent).

However, it was still behind that of its close neighbors like Vietnam (71.3 percent), Indonesia (72.4 percent), Brunei (73.6 percent), Malaysia (74.9 percent), Singapore (84.4 percent), Thailand (85.6 percent), and Hong Kong (90.3 percent).

Asian countries South Korea and Japan topped the list with 97.5 percent and 94.7 percent, respectively.