Gov't: Cell towers, frequencies to blame for slow Internet

Metro Manila (CNN Philippines) — Internet in the Philippines is slow because there aren't enough cell towers in the country and frequencies are poorly allocated to telco companies, a Cabinet official has said.

Rodolfo Salalima, who heads the newly-formed Department of Information and Communications Technology (DICT), said these "twin problems" make it hard for telco companies to improve Internet speeds.

Most homeowners' associations prohibit the construction of cell towers in their subdivisions — even when their residents complain of slow Internet, he explained.

Cell sites are banned because homeowners fear radiation, but he claimed that towers emit just as much radiation as television sets, which people have inside their own homes.

"If we cannot cooperate with one another… just for the purpose of letting telcos put up their cell sites in these localities, kindly naman be fair," Salalima said during a press briefing last Thursday (October 27).

"Do not be complaining when you yourselves are preventing them from coming into your subdivisions."

Moreover, the ICT Secretary said the government also gave away frequencies in the past to telco companies who had no intentions of putting up networks.

These "speculators," he said, only wanted the frequencies as investments, holding on to them until they can sell them off later for a much higher price.

"If they are not putting it into public service for an unreasonable time, I told [the National Telecommunications Commission] to start revoking them so that the other telcos can use them."

"Monoliths"

However, an advocacy group contends this would worsen the problem.

According to Democracy.net.ph, which lobbies for Internet freedom in the Philippines, the telco industry is already controlled by giants Globe Telecom, Inc. and Smart Communications, Inc.

The two are "monoliths," both owning and operating each segment of the telco industry, Pierre Tito Galla, co-founder of Democracy.net.ph, said in a report.

New players find it difficult to come in because they would have to compete with Globe and Smart on all fronts - from the international gateway, the national backbone, even the content providers. This will require a lot of time and money, he pointed out.

Without any "real competition," there is no pressure for the telco giants to improve their service or bring down prices, Galla claimed.

Citing a University of Florida study, he said there should be at least five players in the telco industry to keep it competitive, with each player not holding more than 40% market share.

The Ayala-run Globe and PLDT's Smart have repeatedly rejected claims they act as a duopoly. Officials say they have always tried to beat each other's offerings and prices.

However, the two companies are in hot water, after they both bought out San Miguel Corp.'s telco business in May.

The San Miguel Group was planning to partner with Australia-based Telstra Corp., Ltd. and come in as a third player, but talks failed.

After Globe and PLDT-Smart acquired San Miguel Corp's telco assets, the Philippine Competition Commission took notice and now wants to review the deal — for a possible violation of the country's policy on fair competition among businesses.

But as the Philippine Competition Commission sought to review the acquisition, both Globe and Smart filed a stop order at the Court of Appeals.