Updated 13:17 PM PHT Tue, July 12, 2016
Metro Manila (CNN Philippines) — Smartphones and mobile internet will dominate the telecommunications industry for years to come, a report has shown.
As more and more Filipinos get on their phones and go online, the government must put up a strong internet backbone in the country to help absorb the traffic.
Smartphone users in the Philippines are expected to more than double, hitting 90 million by 2021 from just 40 million today, the Ericsson Mobility Report said last Friday.
Mobile data is forecast to grow even faster. Only 5 percent of all mobile phones are currently capable of accessing the much-faster LTE (long-term evolution) speeds, the report said. In the next five years, 70 percent of phones will have LTE -- an 14-fold increase.
This growth projection does not yet factor in government investments in mobile telecommunications, which would drive an even faster and broader expansion.
Sean Gowran, Country Manager of Ericsson Philippines and Pacific Islands, said the boom is driven by the increasing affordability of smartphones and improvements in technology.
A smartphone is a cellular phone that can function like a computer. It typically has a touchscreen and is able to access the internet and run multiple applications, making it an ideal mobile communication device.
The youth segment will underpin this growth in smartphone use, Gowran said. Young Filipinos are the heaviest users of mobile internet in the country, according to the report. They spend most of their time online watching videos, using social media and instant messaging apps — all data-heavy activities.
The surge in internet traffic will inevitably put pressure on the country’s already-struggling network infrastructure.
The two telco providers, Globe Telecom, Inc. and PLDT, Inc., are often castigated for their poor service and sluggish internet speeds.
But Gowran said, Globe and PLDT already reinvest about 30% of their revenues to build their networks — well above the world average of 20%.
The government, he pointed out, must also do its part.
“If we look at the markets where we normally talk about high quality and speed of Internet access – Singapore, Korea, Japan, Australia – then we see significant investment of government,” he said in a press conference.
According to Gowran, the government needs to help build the internet backbone of the country. This will help facilitate internet traffic that is much faster and much cheaper.
The National Telecommunications Commission (NTC) admitted the state of network infrastructure is poor.
NTC Regulation Branch Director Edgardo Cabarios told CNN Philippines the Commission had long asked Congress to set up a fund for universal access. This would help finance the construction of satellites, fiber optic cables, and more.
The creation of the Department of Information and Communications Technology (DICT) last month should give the final push needed for the government to start building.
“[The DICT] will be preparing plans towards that end. They will identify where they should invest in the development of broadband infrastructure, where subsidies can be given, and where private sector can develop alone,” Cabarios said.
The country’s geography makes it even more difficult for the government to connect all 7,000 islands to the network, he explained. The review will look at the specific needs of each region, and the most cost-effective technology that can be deployed, he said.
Cabarios said the DICT’s review will likely be wrapped up within the year and will be submitted to the National Economic and Development Authority for approval.
Gowran encouraged Globe and PLDT to use their spectrum frequencies wisely — especially after they acquired San Miguel Corp.’s 700-megahertz spectrum in May.
The low bands, such as the newly acquired 700-megahertz spectrum, provide reach. They can penetrate indoor areas better and cover more ground, Gowran said. They are best suited for connecting far-flung, rural areas to the internet.
The higher 1,850, 1,900 and 2,100 megahertz spectrums that Globe and PLDT have are best suited for capacity, carrying internet traffic in heavily crowded areas, like the greater Metro Manila area.
“It's about efficient use of spectrum,” Gowran said.