How The Philippines Got Asia's Worst Internet Service

By: Ralph Jennings

A traveler to the Philippines knows the dance too well. You check into a hotel that advertises Wi-Fi. Turns out it’s only available in the lobby, and only in the daytime. Then you learn of a freak service outage in the lobby. When you do eventually connect, no websites come up. On better days, each website takes a minute or two to load. Yes, on any kind of device.

The Philippines is Asia’s outlier for Internet sloth, but why?

Occasionally the answer is local. Your host might be afraid of keeping the router going 24 hours, for example. Or the hotel lacks money to extend Wi-Fi coverage to guestrooms. But more common explanations in the Southeast Asian country popular with foreign tourists are linked to economic development pains and awkward relations among providers. Obviously the issue isn’t limited to tourists. Gum in the Internet slows business for the nation of 102 million people. Oh, and apparently help is not on the way.

Here’s a schematic of how things don’t work.

The Philippines is made up of about 7,100 islands, making fixed networks particularly hard to build. Permits may be issued only at the smallest level of local government, and one by one. The government also charges “high fees,” a deterrent to any start-ups or foreign investors in broadband, said Fiona Vanier, senior media analyst with market research firm IHS Technology. Dominant broadband provider Philippine Long Distance Telephone Co. controls much of the infrastructure, allowing it to charge fees higher than elsewhere in Asia despite a relatively poor population. The phone company goes on to charge other providers for traffic through its network as well, Vanier said, and the Philippines lacks Internet peering, which slows broadband speeds.

Most fixed-line Internet users still use old systems such as xDSL rather than newer fiber-to-the-home (FTTH) technology, reducing speeds, says market research firm IDC’s Southeast Asia senior telecom research manager Alfie Amir. Last year, IDC says, just 2% of fixed Internet connections in the Philippines were FTTH, compared to 33% across Asia excluding Japan.

High-speed service costs about $57 per month, more than in the United States, estimates Manila-based software technology entrepreneur Valenice Balace. After food, rent and education, that Internet bill “seems like a luxury,” she says. “Clearly, price would be the number one barrier for availing good internet speeds in the Philippines, since most people can’t afford it.”