Technology

Filipinos are among the top heavy social media users in the world averaging 3 hours and 43 minutes spent on social media  everyday in 2022, higher than the global average of 2 hours and 31 minutes. 

Facebook and FB Messenger remain to be the favorite social media platform for Pinoys. But Tiktok is fast gaining adherents overtaking Instagram, and X (formerly Twitter). 

Ninety-nine percent of the 114-million population owns a smartphone but only 7 in 10 Filipinos use the internet via mobile phones. 

Internet penetration is at 72.7 percent according to the Department of Information and Communications Technology (DICT) – the country’s national planning and implementing ICT agency. 

Despite the high usage and penetration rates, the Philippines still has a long way to go in keeping up with the rest of the world in terms of internet speed and cost. In October 2023, the Philippines was 50th in Speedtest Global Index for fixed broadband download speed, and 82nd for mobile download speed.  A worldwide comparison of internet costs placed the Philippines in the 21st place among more than 80 countries with a 100 Mbps subscription plan costing USD 40.05 (P2,230.00) monthly on average. 

Lack of market competition, the archipelagic nature of the country that makes it challenging to put up connectivity infrastructure, and bureaucratic policies contribute to these challenges.

Key players in mobile subscriptions, internet, content 

Two companies, PLDT and Globe Telecom, monopolize the telecommunications sector in the Philippines as the biggest mobile and internet service providers in the Philippines. 

Moody’s Investor Service 2022 reported a 57 percent subscriber market share for Globe and 43 percent for PLDT. It noted that DITO Telecommunity, the country’s third telco still has to catch up. 

PLDT has its headquarters in the Philippines, and is purportedly owned by media mogul Manuel V. Pangilinan, who is also set to return as CEO in 2024. 

Globe Telecom is owned by the Ayala family, who is into real estate, banking, and water utilities.

DITO Telecommunity is owned by  Dennis Uy, a contributor to Rodrigo Duterte’s 2016 presidential campaign. From his petroleum business, he expanded into oil and gas, shipping, logistics, real estate, education and gaming businesses during the Duterte administration.

When it comes to browsing and social media, Google, Facebook, and Youtube are the most used platforms in the Philippines. Eighty two percent of web traffic in the Philippines are traced to Google Chrome. Over 1 billion average monthly visits to Google.com were also recorded for 2022. The most popular social networking site in the country is Facebook, which has 94.6 million active users, followed by Facebook Messenger (92.1%), and Tiktok (77.2%). An average of 615 million monthly visits were recorded for Youtube in 2022, while a monthly average of 78.1 million visits for TikTok were recorded for the same year.

With regard to online information and news content, gmanetwork.com has been noted as the most visited site, followed by abs-cbn.com/news and philstar.com in Nielsen’s media landscape report for the second quarter of 2023.

The relationship between tech companies and the government

Philippine policy planning and regulations usually play catch up vis-a-vis the fast-paced technology sector.

In 2017, the DICT, kicked off its 10-year National Broadband Plan in response to former President Duterte’s directive to provide free public wifi and increase internet speed in the country. The plan consists of five phases. As of 2023, the NBP has completed 70% of Phase 1 involving the construction of a national fiber backbone. The free wi-fi project is eyed to be completed in 2026.

In response to the growing demand for affordable and accessible internet, the DICT, in 2020, released the guidelines for shared cell tower use among mobile network operators. The Philippines only has 22,000 cell towers operated by three telcos. Shared cell tower use is seen to allow mobile networks to operate in the market. 

Crimes involving mobile technology are also common in the Philippines. From January to September 2022, the national police recorded more than 4,000 of these crimes. To help law enforcers run after mobile crimes, the SIM Registration Act was implemented in 2023 by the DICT through the National Telecommunications Commission (NTC). The law requires mobile phone users to register their SIM numbers to continue using mobile services. In July 2023, over 100 million mobile users in the country were able to register.

To boost market competition, the Public Service Act was amended in 2022 to allow full foreign ownership of public services in the Philippines, including telcos. 

What is the relation between tech companies and the media? 

It is important to keep in mind that the media rely on technology to produce and disseminate content. This relationship facilitates a mutually beneficial economic relationship between the two. 

Tech companies affiliated with media entities through common business interests or ownership benefit from this relationship through advertising space, sponsorship opportunities, and public relations. This is in the case of PLDT, which is connected to MediaQuest companies and the Philippine Daily Inquirer through its Beneficial Trust Fund.

Advertising revenues from telcos and tech companies are not available but these ads are ubiquitous in traditional and new media outlets. 

Media companies are also a sustainable clientele for telcos. Journalists, producers, and other personnel are often issued with company laptops and smartphones that come with mobile and data subscriptions in order to facilitate productivity.

How are tech companies regulated?

Telecommunications used to be regarded as a public utility until the Public Service Act was amended in 2022. Aside from the lifting of restrictions on foreign ownership, telcos are now categorized as a public service owning critical infrastructure which has implications for the country’s national security

Telcos are still required to obtain a legislative franchise from Congress and licenses to operate from the NTC. Among these NTC licenses are the certificate of public convenience and necessity, which can take up to 10 years to be granted and carries an application fee of more than PhP300,000.00 (US$5,000). While a CPCN is still pending approval, the NTC can issue a provisional authority that allows the company to operate. Telcos applying for these permits need to prove their capacity to provide services. The NTC also assigns the frequency allocation for networks.

The government also has mechanisms to regulate mergers and acquisitions of companies including telco and media players through the Philippine Competition Commission. The agency is mandated to look into transactions that may result in fewer market choices and competition that is disadvantageous to consumers. 

One example would be PLDT’s proposed acquisition of SkyCable’s broadband services. 

PLDT is linked to Manuel Pangilinan, while SkyCable is a pay and cable television and broadband service provider owned by the Lopezes of ABS-CBN.

PCC has been conducting a review and monitoring of the proposed transaction. In March 2023, PCC solicited public comments and observations about the proposal to more thoroughly assess whether the move will lessen market competition. This is important in the Philippine context where internet services remain costly because of lack of competition.