Overview The
Philippines continues its transformation into a knowledge-based economy with significant
policy and regulatory developments. A new Commission on Information and Communications
Technology was established in January 2004, and a new Optical Media Law that adds
teeth to the effort to combat digital piracy came into force in February 2004.
In addition, the National Telecommunications Commission (NTC), the regulatory
body for the telecommunications and broadcast industries in the Philippines, has
issued rules for WiFi, VoIP, and cellular phone number portability. It has got
involved too in the administration of the ".ph" domain name. Significantly,
the courts have also weighed in on ICT regulation with their rulings on telephone
billings and a domain name dispute. The
government, as the single biggest ICT consumer, continues to move forward with
its e-government efforts. Notable are its mobile government initiatives, an e-government
fund and continuing progress of government agency websites. The
mobile phone industry remains the shining star of the Philippine ICT sector. Competition,
innovation and the continuing Filipino love affair with the cellular phone have
pushed mobile phone ownership to more than 25 percent of the population -- six
times higher than wired phone penetration. Industries The
Philippines is proof that competition in the telecom-munications sector leads
to better and innovative services at lower costs. Before competition was introduced
in the country in 1993, telecommunications services were the pits. In 1990, the
Department of Transportation and Communication announced the National Telecommunications
Development Plan 1991 - 2010, which targeted a teledensity of 2.4 by the year
2000 and 3.5 by 2010. But by 1998, a mere five years after the introduction of
competition, the targets were surpassed. Today, teledensity is at 10. In fact,
currently there are more telephone lines than there are subscribers. Even
more impressive is the effect of a liberalised and competitive telecommunications
market on the uptake of cellular phone services. The Philippines is among the
countries with more cellular phones than fixed/wired phones. And this is not simply
due to the deterioration of fixed/wired phone services. Between 1999 and 2002,
the number of fixed/wired phones increased by 446,491, making the Philippines
the ninth best performer in the Asia-Pacific region in terms of the absolute number
of new lines for the period. However, in the same period, cellular phone subscribers
increased by 11,366,250! This made the Philippines the fifth best in the Asia-Pacific
region in terms of the absolute number of new cellular subscribers and seventh
best in terms of percentage increase (at 399 percent). At the end of 2003, there
were close to 22 million mobile phone subscribers. Cellular
phone services in the Philippines started in 1991 using analogue technologies.
But analogue’s dominance did not last. Problems related to cloning and poor billing
by service providers boosted the shift to 2G. By 1999, GSM was already the new
standard in the market. The
shift to digital technology, the brutal competition for market share, and the
1997 financial crisis led to consolidation in the cellular marketplace. The five
original cellular providers have been reduced to two: Smart Communications, which
had 54 percent of the market by 2003, and Globe Telecommunications, which had
46 percent. In the middle of 2003, a new cellular phone provider, Sun Cellular,
entered the fray offering lower-priced SMS and voice services. Because
of the intense competition for subscribers, the mobile service providers continue
to extend their reach by opening new cell sites in remote areas. Smart claims
that its 4,000 cell sites provide coverage to 80 percent of the entire archipelago.3
The providers have also been upgrading their networks with EDGE technology. Smart
has announced that . . . . . the complete text of this chapter is available for
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