The telecommunications sector in the Philippines is finding itself at a crossroads today. The industry has long been a monopoly, and was deregulated only during the presidency of Fidel V. Ramos from 1992-98. During that time, a number of players came into the picture thereby increasing the number of national carriers to 10 and some 40 small private telephone companies scattered throughout the Philippines.

Telecommunications Infrastructure and Current Developments in Rural Philippines

The National Telephone Program (NTP) has provided 59,150 lines in Luzon, 13,728 line in the Visayas, and 31,153 lines in Mindanao. Combined with existing lines put into place in the past, as well as the lines provided by the 10 leading telecommunications providers in the country, these installations have resulted in a total of 6,545,334 lines or a teledensity of 9.05 as of June 30, 1998. The teledensity in the Philippines in the last 10 years has constantly increased from 0.86 in 1989 to 9.05 in mid-1998.

The Philippine government also has a program to install telephones in the villages called the Municipal Telephone Project, which includes installation of public calling offices in areas not currently served by existing carriers. This project uses a combination of microwave radio and satellite technology to provide voice and facsimile services.

Problems and Needs

To be sure, there are a lot of problems within the telecommunications industry in the Philippines. Many are minor problems, but the major ones include the following:

1. Interconnection issues. In the Philippines, there has been a great increase in the number of telephone lines that have been made available to telephone subscribers. However, making a call that cuts across different carrier lines is still a problem because frequently the call takes too much time to be connected. To remedy this problem, the National Telecommunications Commission (NTC) is proposing to provide tangible benefits that would entice the national carriers to interconnect with one another. This package of benefits could include granting of tax holidays, or discounts or exemptions from fees charged by the NTC for its services. At the same time, government is also considering non-interconnection by national carriers as some kind of economic crime punishable by law.
2. Inability of telecommunications firms to meet commitments. Under Executive Order 109, which deregulated the telecommunications industry and which took effect in 1995, international gateway facility (IGF) operators must put up at least 300,000 land lines within three years, while cellular mobile telephone companies were required to provide 400,000 lines. Providers of both services (IGF and cellular phones) were required to put up 700,000 land lines.

   To date, three carriers have satisfied their respective roll out commitments, while the others have failed to meet theirs. According to the NTC, most of the telecommunications firms were unable to meet their respective commitments to install lines in the rural areas where such services are at the moment considered not viable economically.

3. Channel capacity of outstations provided by government not maximized. The Department of Transportation and Communications has installed microwave radio outstations throughout the country. Each of these outstations has a capacity of 32 voice channels, but only 4 are used by the public calling offices project of government. Other users are not taking advantage of this facility because there are no economic activities at the sites of the outstations.
4. Inaccessibility to educational institutions. Telecommunications facilities in the country are not completely accessible to educational institutions due to high commercial rates. There does not seem to be any move to provide services at special discounted rates to educational institutions like the University of the Philippines Open University.

Development Plans in the Sector

The three major plans that the Philippine government is undertaking are:

1. Convergence policy. Basically, government is considering the adoption of a policy to encourage convergence of telecommunications, cable television, broadcasting, and computing. In the convergence scenario, telephone companies would be allowed to provide video services, while cable TV could engage in telephony. Broadcasting companies, on the other hand, would be able to carry data services.
2. Philippine Information Infrastructure (PII). The objective of this project is to enhance the physical infrastructure that shall have as its backbone an integrated, interactive, high-capacity multimedia (voice, data, images/video and other advanced services) telecommunications network of networks.
3. Government Transponder Utilization Plan (GTUP). The Philippine government has prepared a plan of how to optimize use of the two transponders that were allocated to it for free use by Philippine Agila Satellite, Inc. (PASI). The plan envisions to link the vast internal structure of the government, uniting and harmonizing the diverse functions of its many agencies through satellite communications.

Suggested Regional Cooperation Concerns

1. Asia-Pacific Information Infrastructure (APII). This is an on-going project that will enable Asia-Pacific countries to link up with one another and with the Global Information Infrastructure.
2. Asian Internet Interconnection Initiatives (AI3). This is a regional R&D project of the satellite-Internet community in Asia which is based in Japan, and which is currently on-going with the participation of Japan, Hongkong, Indonesia, and Singapore. The Philippines and Malaysia are expected to come on board soon. It would be wise to look into the feasibility of expanding participation in this project to include other member countries of the UN-ESCAP.
3. Joint development of distance education programs and courses. This could be undertaken by distance education institutions in the region. There is a lot of expertise in the different countries and sharing this expertise through program and course development efforts will go a long way towards promoting educational endeavors among member countries of the UN-ESCAP.
4. Full operationalization of the Community Tele-service Centre (CTC) Project. To get member countries to implement their respective CTC projects, it may be necessary to conduct a regional survey and analysis to determine whether or not said member countries are ready to put up their respective CTC projects. A study team of experts should visit the countries concerned for an ocular inspection and discussions with the country experts and decisions makers to ascertain their willingness and ability to participate. Funding for this study is obviously in order.