Industry Trend Analysis - Competition Key To Broadband Plan Success, But Government Support Crucial - DEC 2017

BMI View : Additional players, less restrictive regulations and a more commercially orientated mindset will help secure a successful outcome to the Philippines ' government ' s ambitious four-year National Broadband Plan . Incumbents PLDT and Globe should not seek to block t he entry of PT&T and TransCo ; should they do so, the regulator should not automatically find in the incumbents ' favour, as it has done in the past. Nevertheless, the government should thoroughly assess the viability of the Plan in light of the newcomers ' proposals and not attempt to treat their contributions as an after-thought.

The Department of Information and Communications Technology (DICT) proposes to build a public sector funded national broadband infrastructure over a three- to four-year period. The Duterte government has identified low broadband quality and availability as being a major impediment to economic diversification and has called for more focused and rationalised investment in the underlying infrastructure to help establish a digital economy.

Incumbents PLDT and Globe Telecom have effectively become a bottleneck for improvement as, without effective competition, they have little incentive to augment their networks or lower prices. Investments in fibre have so far targeted the most commercially attractive areas of the country, leaving the majority of Filipino consumers and businesses to contend with low-speed wireline connections and 'good enough' basic 3G and 4G mobile connectivity. A third, or even a fourth, infrastructure-led player is needed to stimulate investment and, ostensibly, the government's plans will provide the opportunity to move forwards.

Filipinos Need More Than 'Good Enough' Mobile Broadband
Philippines: Broadband & 3G/4G Forecasts
f = BMI forecast. Source: BMI, Operators, NTC

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