ISPs bound to die, says PLDT

By Darwin G. Amojelar, Manila Times Reporter

Independent Internet service providers (ISPs) are a dying breed across the globe, according to Philippine Long Distance Telephone Co. (PLDT).

The country’s largest telco said this in response to the claim of the National Telecommunication Commission that carrier-affiliated service providers are killing the competitive spirit of independent ISPs in the country.

The NTC earlier blamed lack of competition in the market for the poor performance of ISPs, which, it said was the result of the increasing dominance of carrier-affiliated service providers.

But PLDT opposed the view, saying “there is evidence suggesting that the ISP business model is in decline globally and that the performance of the individual players is not driven by the carriers’ actions, but by the nature of the business and the capabilities of the individual players.”

The company added there is evidence to show that ISP affiliates of large carriers are themselves losing money and unable to grow.

It cited that the number of Internet subscribers in the United States has increased 56 percent to 80 million in 2005 from 51 million in 2000, while the number of dial-up ISP subscribers has gone up to 36 million in 2005 from 47 million in 2000.

“This reflects the fact that ISPs add little value, typically providing simple Internet connectivity and potentially an e-mail service,” the company said.

PLDT argued that its affiliate, Infocom, which falls under the “large carrier” group, posted a stagnant revenue from 2002 to 2004 at about P380 million.

PLDT also said that Infocom’s net income has also “drastically” suffered a loss of P115 million in 2004 from a profit of P25 million in 2002.

“On the other hand, players such as Pacific Internet and Tri-Isys hold leadership positions in the ISP business and have won several awards,” PLDT said