Company profiles

The telecommunications industry in the Philippines is a duopoly of the Philippine Long Distance Telephone Company (PLDT, Inc.) and Globe Telecom (Globe). Both are private companies, with PLDT being partly owned by Hong Kong’s First Pacific Group and Globe being part of Ayala Corp. In terms of mobile subscriber base, Globe is ahead by a narrow margin as of 2019, with about 94.2 million subscribers as opposed to PLDT’s 60.49 million (Lamiel, 2020). Both posted an increase of 21 to 27 percent from 2018 figures.

Both companies have posted immense profits: from 2000 to 2016, PLDT paid its shareholders with more than PhP 380 billion (USD 7.3 billion) in cash dividends, while Globe has paid about PhP 135 billion (about USD 2.6 billion) (Camus, 2018a). However, for several years now, consumers have complained about what they described as ‘poor’ or ‘inconsistent’ service from these telecommunications giants. According to Trade Undersecretary Vic Dimagiba, the Philippine Department of Trade and Industry has received 55 complaints against Smart (under PLDT) and Globe over ‘poor internet service, slow speeds or unfulfilled promise of an advertised service’ in 2015 (Elchico, 2015). This is merely an official record and of course does not include reports made on informal channels such as social media. In 2017, a legislator warned that the Congress can revoke the licenses of the companies if reports of poor service continue (Cepeda, 2017).

These claims appear to be bolstered by findings of research firms. Philippines has the slowest internet speed in Asia-Pacific as of 2017 (Akamai Technologies, 2017), with an average speed of 5.5 mbps, lower than the global average of 7.2 mbps. Two years later, the average internet speed still falls below the global average, according to the Speedtest Global Index, which ranks over 130 countries according to average internet speed (ABS CBN News, 2019). Philippines ranks 103rd out of 139 countries in the Index. According to another report by in 2017, Filipinos need to wait about four and a half hours to download a high-definition movie, 50 percent longer than in Vietnam and more than 14 times slower than it would take in Singapore (Camus, 2018a). However, internet speeds appear to be picking up pace, as average mobile internet speed increased by 11 percent from 2018 to 2019, while the average speed for fixed connections jumped by 34 percent (We are Social and Hootsuite, 2020).

In November 2018, Filipino authorities selected Dito Community (formerly Mindanao Islamic Telephone Company), a joint venture of China Telecom and a Filipino tycoon, as the new major telecommunications player that will challenge the telecommunications duopoly. Last year, its Certificate of Public Convenience and Necessity was issued, bringing it a step closer to commercial launch (Bell, 2019).

A new internet provider company, Converge ICT solutions, is also seen as an emerging challenger to the home internet duopoly of PLDT and Globe. Converge ICT offers home fiber plans that are cheaper by 40 to 50 percent than similar offerings of its competitors (Camus, 2018d). The company was cited as the ‘fastest growing internet service provider’ in the International Finance Awards of the International Finance magazine, a London-based publication (BMPlus, 2020).

When it comes to 4G connectivity, the coverage in the country remains patchy especially outside the urban areas, despite the fact that 4G networks arrived in the country around six years ago. However, 4G connectivity has seen a massive improvement in less than two years. Based on a report published by mobile analytics company Opensignal (Fitchard, 2019), LTE users can now access an LTE connection more than 70 percent of the time, a dramatic improvement from the 2018 performance. According to the 2018 report of Opensignal, 4G signals remain ‘hard to find’ in the country and ‘neither of the two Philippines operators provided…users with the 70% availability we have seen in more mature 4G markets.’

5G connectivity is still in its infancy – even though Globe launched its 5G service in 2019, a comprehensive deployment of the technology ‘will take time’, probably three to four years (International Finance Business Desk, 2020).