PHILIPPINES ON THE VERGE OF NEW INTERNET BOOM

MANILA, Asia Pulse - Get ready to trade online. The Philippines is on the verge of a new Internet boom driven by cheap dial-up and broadband access.

"We expect Internet use in the country to grow by leaps and bounds in the months ahead as low-priced dial-up and broadband Internet services draw more subscribers," said Catanduanes Rep. Joseph Santiago, former chief of the National Telecommunications Commission (NTC) and vice chair of the House transportation and communications committee. ADVERTISEMENT

Inexpensive, conventional, as well as high-velocity Internet access through landlines and mobile telephones would trigger a fresh surge in computer and Internet use by households and small businesses nationwide, he predicted.

This, in turn, would drive business-to-business as well as business-to-consumer electronic commerce, he said.

The growing popularity of broadband access has forced traditional dial-up Internet service providers (ISPs) to drastically reduce their monthly fees, thus making web browsing within reach of even more Filipinos, according to Santiago.

"Actually, the cheapest dial-up Internet access now is P160 monthly," the solon said, referring to Philippine Long Distance Telephone Co.s (PLDT) recent "all in" offering -- P840 monthly, a bundled service that covers the basic monthly landline service and unlimited Internet access.

Thus, a landline residential subscriber now paying about P680 monthly would have to add just 160 pesos to get unlimited dial-up Internet access.

"Outside of PLDT, we now have independent dial-up ISPs offering unlimited Internet use for as low as P13.30 per day or P399 monthly. Before this, the cheapest Internet service was P24.94 daily or P748 monthly," Santiago said.

Santiago said he expects telecommunications providers to draw tens of thousands of new broadband and dial-up Internet service subscribers.

"Broadband is attractive to existing landline subscribers because they can use their telephones for voice calls while staying connected to the Internet all the time," Santiago pointed out.

This is because in broadband, a wire carries several data channels. A digital subscriber line (DSL) service, for example, combines separate voice and data channels over a single telephone line. Voice fills the low end and data fill the high end of the frequency spectrum.

PLDT reported a total of 76,000 broadband Internet subscribers as of September 2005, an increase of 54 per cent over its 49,500 users in September 2004.

In addition, Smart Communications Inc. and Globe Telecom Inc. had between them about 20,000 wireless broadband subscribers as of September 2005.

Another "leading indicator" of an Internet boom is the rapid growth of web shops, according to Santiago.

"Netopia is putting up 71 new branches this year. Obviously, Netopia will not be expanding that aggressively if it does not see a pent-up demand for high-speed Internet service among young Filipinos," he said.

Netopia is the country's largest Internet cafe chain, with 220 branches and about 5,000 workstations nationwide as of 2005.

Netopia reported P192 million (US$3.7 million) in revenues in 2004, 175 per cent higher than the P70 million it posted in 2003. The company has yet to report its 2005 revenues.

Santiago, meanwhile, said third-generation mobile telephony would eventually give the Internet boom a big push. "It will all depend on pricing -- how the new 3G handsets and services will be priced. And pricing will depend on the amount of new capital service providers are prepared to risk," he said.

Back in the mid-1990s, mobile handsets priced for less than P2,000 helped to drive the cellular telephone boom, Santiago noted.

"In 3G, many Filipinos previously uninitiated to the Internet will be exposed to the web for the first time via mobile telephones," he added.

Last month, the NTC awarded 3G licenses to Smart, Globe, Digital Telecommunications Inc. and Connectivity Unlimited Resources Enterprise Inc. They must offer 3G services within 30 months or by mid-2008.

3G is seen to drive Internet use since the new technology enables advanced connectivity and greater multimedia applications via mobile telephones, including real time large data transmissions, streaming video and music and ultra high-speed web browsing.

The International Data Corp. projects Internet users in the Philippines to almost double to 20 million by 2007, from only 11.8 million as of end 2004. (PNA)