IBPAP sees growth amid telco competition

THE Information Technology and Business Process Association of the Philippines (IBPAP) sees growth in the local telecommunication industry amid the entry of a third player, its official said.

Genny Inocencio-Marcial, executive director for external affairs of IBPAP, said tapping an additional telecommunication company (telco) from China was a good move of the government.

Inocencio-Marcial said competition would make the whole telecommunication environment as a service sector more competitive.

“Normally, competition makes quality of services better,” she said, adding that this development poses a challenge to existing telcos to also improve.

President Rodrigo Duterte offered China the privilege to operate the third telecom carrier during his bilateral meeting with Chinese Premier Li Keqiang in November last year.

Presidential Spokesperson Harry Roque had earlier said the investment venture with China would break the “duopoly” in the telecommunications industry that has frustrated consumers for years.

The Philippines’ data and voice services is reportedly among Asia-Pacific's slowest and most intermittent, which prompted Duterte to warn existing providers Globe Telecom and PLDT to shape up or face new competition.

However, concerns regarding limitations on business ownership in the Philippine constitution arose recently.

The 1987 Constitution states that Filipinos must own 60 percent of a telco, with foreign ownership limited to 40 percent.

In a report Wednesday, Roque said that if China cannot work with these limitations, “we are open to tapping other companies to help set up the third telco player in the country.”

The China Telecom has not yet expressed any concerns or aversion to the constitutional limitation, the President’s spokesman added.

As talks and finalization of deals continue, IBPAP remains upbeat that a competition resulting from a third player would happen sooner.

Inocencio-Marcial said that amid challenges on improving connectivity in the country, the industry has still been growing.

But more options would result to further growth, Inocencio-Marcial said, stressing that when the local industry started there are only three landing stations in the Philippines.

“Now, there are already nine so in terms of connectivity the whole country is already covered. We just have to ensure better cost of services and reliability especially in the countryside," she added.

The IBPAP official said they also want to grow the “footprints” in the provinces, including Bacolod City and other less developed areas.

Based on the growth trajectory through the industry roadmap 2022, the growth towards provinces is bigger every year at 11 percent.

It is higher than Metro Manila, at only seven percent, Inocencio-Marcial added.
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