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Study: The Government is the Most Viable Third Telco Provider in PH

The Philippine government is the most practical option, a study says.

According to Globe Telecom, given the current circumstances in the country, the Philippine government is the only “realistic” and “viable” third major telco operator that can possibly keep up with the financial cost of the business, as well as effectively compete with the two established major telcos.

Citing a study by University of the Philippine Professor Emeritus Epictetus Patalinghug, Globe Telecom noted that: “The present two-player structure is characterized as fiercely competitive. However, the market realities of capital intensity, sunk costs, and economies of network size prevent a realistic entry of a private third player. Only a publicly-owned third player that builds a ‘last mile’ network that is financially not viable for private operators to build, can complement the coverage gap in the present network.”

The study in reference is entitled the “Assessment of the Structure, Conduct, and Performance of the Philippine Telecommunications Industry” written by Patalinghug and co-authors Wilfred Manuela Jr. and Regina Manzano-Lizares.

“The only realistic third player is the government because it has the capacity to pour investments in ‘last mile’ and high-cost areas to build a ‘last mile’ network that complements existing networks,” quoted the study.

ICT Secretary Rodolfo Salalima said the country is open and prime to having more telco operators.

“If any local franchisee wants to be the third or fourth operator of consequence in this country, bring in a foreign partner with the legal, technical and financial credibility and capacity to mount a credible and effective competition against the existing telcos,” he told the press.

So, the Philippine government as the third major telco operator? Your thoughts on the issue, Unbox readers? Post them below.

Source: GMA News Online

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  1. Our government cannot be trusted to run this sort of infrastructure. They will just run this to the ground. A perfect example of this is our transportation system.

  2. The study is not complete since it only focuses on viability and less on reality. While the reality on studies assumed on govt running an infra in an ideal approach, it may did not show how our govt will actually manage such. Lets not go far. Take the MRT signaling system. No improvement or less improvement had been made on it. It is a vital part of MRT system and yet the govt had taken the signaling system for granted. Kaya ang daming “stop overs” sa gitna ng riles.

    Magpakatotoo tayo. May mga tao sa govt na walang inisip kundi paano magkamal ng pera. Its really a sad thing to note.

    Now, kung ang magpapatakbo ng govt infra ay ang mga taong malilinis ang konsyensya, gaganda ang service. Pero kung corrupt, kawawa si juan dela cruz.

  3. Not a chance, especially with how unreliable and corrupt the government are. Not to mention, the statement came from Globe Telecom, a major telco monopoly. Go figure! lol

  4. One more thing, the last mile network is as important as other connectivity. Because this so called “last mile” is where the clients are. In rural areas the far flung areas are areas that must be reached. They are the ones hardly hit by natural calamities.

    If these telcos (specially Globe telecom) wants to serve the people, they should NOT depend on the government to implement the “last mile” connection. Malaki naman kinikita nila sa ating mga subscribers. Ano ba naman yung kaunting tulong (na wala pa ata sa kalingkingan ng kanilang kita) na pwede naman nilang iabot sa mga naghihirap nating mga kababayan? This last mile can and will serve as the backbone of Republic Act No. 10639 or the “Free Mobile Disaster Alerts Act” for people in far places and danger zones.

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