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Republic of the Philippines Country Report

AsiaAsiaAsiaAsia----Pacific Regional Workshop on Equal Access of Women in ICTPacific Regional Workshop on Equal Access of Women in ICTPacific Regional Workshop on Equal Access of Women in ICTPacific Regional Workshop on Equal Access of Women in ICT

22222222----26 October 2001, Seoul, R.O.Korea26 October 2001, Seoul, R.O.Korea26 October 2001, Seoul, R.O.Korea26 October 2001, Seoul, R.O.Korea

Name of Country : Republic of the Philippines Location & a Brief History : The archipelago, named Felipinas for Spain's Philip II,

was composed of 7,107 islands and islets spanning 1854 kilometers from north to south. The Philippines, also is a window to the New World, stretched from China to the North and the Indonesian archipelago to the south. The northern most tip of the country, Y'ami of the Batanes Island group, is 241 kilometers south of Taiwan while the southernmost tip, Sibutu of the Tawi-Tawi group of islands, is just 14.4 kilometers north of Borneo.

Capital : Manila. Metropolitan Manila is where the country's most

prestigious business addresses and the trendiest leisure establishments are found.

Area : 300,000 sq. kilometers land - 298,170 sq. kilometers water - 1,830 sq. Kilometer Coastline : 36,289 kilometers Climate : Tropical Marine, Northeast monsoon (November to

April); Southwest monsoon (May to October) Terrain : Mostly mountains with narrow to extensive coastal

lowlands Language : Pilipino (official language : English) Religion : 80% Catholic, 15% Moslems & 5% Christian & Buddhist Population : 76.5 Million (as of May 2000) GDP (2nd quarter 2001) : 3.3 % Currency : Peso (PhP)

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STRUCTURE OF THE PHILIPPINE TELECOMMUNICATIONS SECTOR

R A D I O & T VB R O A D C A S T

N E T W O R K

P R I V A T EN E T W O R K S

I N D U S T R YA S S O C I A T I O N S

E Q U I P M E N TM A N U F A C T U R E R S

& S U P P L I E R SP U B L I C

N E T W O R K S

C A R R I E R S ’C A R R I E R

V O I C EC A R R I E R S

R E C O R DC A R R I E R S

O T H E RS E R V I C E

C A R R I E R S

D O T C

N T CT E L O F

C O N G R E S SO T H E R

G O V E R N M E N TA G E N C I E S

DOTC - Department of Transportation and Communications. It is the policy-making body for telecommunications Head : Secretary Pantaleon Alvarez NTC - National Telecommunications Commission

It is the regulatory arm with quasi-judicial powers. Head : Commissioner Eliseo M. Rio, Jr. TELOF - Telecommunications Office

It is the operating arm of the government, providing telecommunications facilities in areas where no such services are available. It also maintains the telecommunications network backbone.

Head : Assistant Secretary Delia R. Hoy-Ganaden CONGRESS is empowered to enfranchise private telecommunications carriers while the NTC grants specific authorities called as Certificate of Public Convenience and Necessity (CPCN).

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I. PHILIPPINE TELECOMMUNICATION HISTORY A. Telecommunications Policy Issuances

1. Department Circular No. 87-188 (March 22, 1987) A landmark document which contained policy statements intended to rationalize

and guide the orderly and competitive development of Philippine telecommunications.

2. Department Circular No. 92-269 "Cellular Mobile Telephone System Policy"

(November 11, 1992) This Circular allows open entry to the CMTS market, subject to availability of

frequency spectrum.

3. E. O. 59 and its Implementing Guidelines "Interconnection Policy" (February 24, 1993) This mandates compulsory interconnection of authorized public telecommunications carriers in order to create a universally accessible and fully integrated nationwide telecommunications network and thereby encourage greater private sector investment in telecommunications.

4. Department Circular No. 93-273 "Domestic Satellite Policy" (June 14, 1993) This Circular opened the domestic satellite communications service market to

competition.

5. E. O. 109 and its Implementing Guidelines (July 12, 1993) “Policy to Improve the Provision of Local Exchange Carrier Service” This mandate authorized international gateway operators and CMTS operators

to provide 300,000 and 400,000 local exchange lines respectively in unserved and underserved areas, including Metro Manila with an obligation of 10:1 urban:rural ratio.

6. Republic Act No. 7925 and its Implementing Guidelines (March 1, 1995) “An Act to Promote and Govern the Development of Philippine

Telecommunications and the Delivery of Public Telecommunications Services”. This act is also known as the "Public Telecommunications Policy Act of the Philippines."

The objective of the government is to develop and maintain a viable, efficient,

reliable and affordable technologies, as a vital tool to nation building and development. This act encourages network operators, among others to extend basic services to areas not yet served.

7. E. O. 436 (September 9, 1997)

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"Prescribing Policy Guidelines to Govern the Operations of Cable Television in the Philippines"

This executive order specifies the rules and regulations on who, how and where to operate cable television system. Also, it clearly states that cable television services is separate and distinct from telecommunications or broadcast.

8. Department Circular No. 97-01 "Guidelines on the Procurement of Orbital Slots and Frequency Registration of Philippine Satellite(s) (October 17, 1997)

This Circular provides guidelines for the DOTC, the NTC, and prospective satellite operators in the acquisition of orbital slot(s) and registration of frequency assignments of Philippine satellite(s).

9. Department Circular No. 98-01 " Global Mobile personal Communications by Satellite (GMPCS) Policy (February 27, 1998)

This Circular allows authorized Public Telecommunications Entities to provide GMPCS service in the country.

10. E. O. 467 (March 17, 1998) "Providing for a National Policy on the Operation and Use of International

Satellite Communications in the Country."

The executive order allows all international carriers and broadcasters access to fixed and mobile international satellite.

11. Republic Act No. 8792 - "Electronic Commerce Act" (June 14, 2000) "An Act Providing for the Recognition and Use of Electronic Commercial and

Non-Commercial Transactions, Penalties for Unlawful Use thereof, and Other Purposes." This Act is also known as the "Electronic Commerce Act."

The Act aims to facilitate domestic and international dealings, transactions, arrangements, agreements, contracts and exchanges and storage of information through the utilization of electronic, optical and similar medium, mode, instrumentality and technology to recognize the authenticity and reliability of electronic data messages or electronic documents related to such activities and to promote the universal use of electronic transactions in the government and by the general public.

B. Service Providers

Below is a list of telecommunication services and corresponding number of operators providing such services.

No. Of Operators per Telecom Service As of December 2000

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TELECOM SERVICE OPERATORS Local Exchange Carrier Service 77 Cellular Mobile Telephone Service 5 Paging Service 15 Public Trunk Repeater Service 10 International Gateway Facility 11 Satellite Service 3 International Records Carrier 5 Domestic Record Carrier 6 Very Small Aperture Terminal 5 Public Coastal Station 12 Radiotelephone 5 Value-Added Service 156

C. Sector Statistics

The following are sector statistics showing growth rate for selected telecommunications services.

1. Fixed Lines

TELEPHONE DENSITY INDEX

1.17 2.014.66

8.07 9.08 9.12 9.05

0

5

10

1992 1996 1998 2000

Year

Tele

dens

ity (p

er

100

Pers

ons)

TELEPHONE DISTRIBUTION BY OPERATOR

0

600,000

1,200,000

1,800,000

1 2 3 4 5 6 7 8 9 10 11

Operators

No.

of S

ubsc

riber

s

Legend: Operator No. Operator

1 PLDT 2 DIGITEL

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3 BAYANTEL 4 ISLACOM 5 GLOBE TELECOM 6 SMART 7 PT&T 8 PILTEL 9 PHILCOM 10 ETPI 11 OTHER OPERATORS

2. Cellular Mobile Telephone Services

GROWTH IN CELLULAR MOBILE TELEPHONE SERVICE SUBSCRIPTION

1,34

3,62

0

1,73

3,65

2

2,84

9,88

0 6,45

4,35

9-

2,000,000

4,000,000

6,000,000

8,000,000

1997 1998 1999 2000

Year

No.

of S

ubsc

riber

s

CMTS Subscriber Share Per Operator

SM ART44%

GLOBE TELECOM40%

PILTEL10%

EXTELCOM3%

ISLACOM3%

3. Other telecommunications statistics.

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A. Public Trunk Repeater Service

STATUS OF PUBLIC TRUNK REPEATER SERVICE SUBSCRIPTION

-20,00040,00060,00080,000

100,000

1997

1998

1999

2000

Year

No.

of S

ubsc

riber

s

b. Trunk Radio Subscriber Share per Operator

TRUNK RADIO SUBSCRIBER SHARE PER OPERATOR

LBNI8%

UTS4%

TNRI5%OMNINET

5%

CONTEL10%

WORLDWIDE14%

CORONA3%

BAYANTEL0%

RA DIOM ARINE

0% NEXTEL51%

c. Growth of Broadcast Stations and CATV Networks

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AM FM TV CATV DTU

0

200

400

600

800

1000

1200

AM FM TV CATV DTU

GROWTH OF BROADCAST STATIONS AND CATV NETWORKS

1997

1998

1999

2000

D. Telecommunication Entities

"Article IV. Telecommunication Entities" of the Republic Act 7925, categorizes the telecommunication entities as follows:

1. Local Exchange Operator It is an entity providing transmission and switching of telecommunications

services, primarily but not limited to voice-to-voice in a geographic area anywhere in the Philippines. The liberalization of the industry beginning in the mid-80s saw major changes in the fixed (or wired) telecommunications sector. Liberalization resulted in increased competition, introduction of new technologies, and direct investments. In 1999, telecommunications firms attracted $769.5 M worth of investments from fund companies. Most of the investments made in telecommunications services were focused on switching technology, backbone/trunking, and interconnection.

2. Inter-Exchange Carrier

It is an entity, sometimes referred to as carrier's carrier or national backbone network operator, authorized to install, own and operate facilities which connect local exchanges within the Philippines and to engage in the business of inter-exchange national long distance services.

3. International Carrier

It is an entity primarily engaged in the business of providing transmission and switching of any telecommunications service between the Philippines and any other point of the world to which it has an existing correspondent or prospective interconnection agreements.

4. Value-added Service Provider (VAS) It is an entity which, relying on the transmission, switching and local distribution facilities of the local exchange and inter-exchange operators, and

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overseas carriers, offers enhanced services beyond those ordinarily provided by such carrier. VAS providers who do not build their own networks are not regulated by NTC. The only requirement is to register with the NTC and submit quarterly reports on the operation. At present Internet Services fall within value-added services, thus it is not regulated.

5. Mobile Radio Services Mobile radio telephone system is a wide area mobile radio telephone system with its own switch, base stations and transmission facilities of providing high capacity mobile telecommunications by utilizing radio frequencies.

The cellular mobile telephone service is growing at a rapid pace since the deregulation of the sector in the early 90s. Wireless data has become a service for mobile phone operators, particularly with new developments in technology that allow users to download data from the internet through WAP (wireless application protocol)-enabled phones.

6. Radio Paging Services Radio Paging Service was introduced in the country when Pocketbell Philippines, Inc. was given authority to provide paging service in 1975. It started offering tone only radio paging and later expanded to introducing voice paging. After ten (10) years, the NTC authorized a second operator, EasyCall Philippines, Inc. which offered alphanumeric and numeric radio paging service. These two operators were authorized to provide the service nationwide. In 1989, T.N. Romasanta (DigiPage) was authorized to provide numeric radio paging service.

Between 1992 up to 1998, twelve more companies were authorized to provide the service. The influx was mainly due to the partial deregulation of this segment of the industry with the enactment of Republic Act 7925. The law provides that possession of a valid franchise and availability of frequencies are the only prerequisites to obtain authorization to render the service.

With the introduction of short messaging system (SMS) in cellular phones, this service began to decline.

E. Foreign Ownership Limitation

Section 11, Article XII of the 1987 Philippine Constitution limits 40% foreign ownership and participation in telecommunication entities.

II. INFORMATION AND COMMUNICATIONS TECHNOLOGY (ICT)

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A. The Information Technology and Electronic Commerce Council (ITECC)

ITECC was formed through the merging of the National Information Technology Council (NITC) and the Electronic Commerce Promotion Council (ECPC). Executive Order 18, dated May 25, 2001, signed by President Gloria Macapagal Arroyo restructured ITECC with President Arroyo acting as its chair.

ITECC was established to function as the primary planning and policy body on development, promotion and application of national ICT and e-commerce initiatives.

The Council is composed of ten (10) members from government and eight (8) members from the private sector.

Below are the five Sub-committees of the ITECC with their corresponding lead agencies. Each committee is co-chaired by a private sector representative.

1. Information Infrastructure Committee - chaired by the Department of

Transportation and Communication (DOTC)

Focus Areas:

• Identify priority hubs for Network development • Develop Project Study on bandwidth requirements plan • Develop incentive programs for private sector network capacity build-up in

non-commercially viable areas • Develop policy on interconnect charges • Review, update and revise frequency management policies and practices • Pursue and resolve interconnection issues

2. E-Government Committee - chaired by the Department of Science and

Technology Focus Areas:

• Commission study on developing an implementation plan for GISP • Review and consolidate all networking requirements of government

agencies • Study feasibility of a single government portal • Review all government ISPs to ensure alignment with GISP and maximize

synergy through use of common resources • Review mandate of NCC and align with ITECC directions • Monitor compliance of agencies to E-Commerce Act

3. Legal and Regulatory Committee - chaired by the Department of Justice

Focus Areas:

• Finalize draft bill for creation of DICT

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• Monitor all IT related bills filed in both houses • Finalize IRR for E-Commerce Act • Develop programs for enforcement of IPR laws • Pursue legislation in Internet privacy and security • Develop guidelines on regulatory issues related to ICT • Develop guidelines on ownership and security of data in BOT/BOO IT

projects

4. Human Resource Development Committee - chaired by the Commission on Higher Education

Focus Areas:

• Develop policy and programs on E-learning • Develop guidelines on enhancement of Basic Education • Develop programs on government/private sector initiatives in increasing

supply of IT skills • Monitor implementation of HR Cluster recommendations

5. E-Business Development Committee - chaired by the Department of Trade

and Industry Focus Areas:

• Enhance fiscal incentives for investors • Enhance financing schemes for SMEs • Plan and set policy for venture capital market • Promote Philippines as E-Services Hub • Develop an inventory of existing IT skill in the country

III. PENDING BILLS/REGULATIONS

A. Bills on Cable TV The bill aims to bring the Philippine Cable Television Industry at par with its

global counterparts and encourages foreign participation in the local industry through capital infusion and technology transfer.

B. Bills on Interconnection The bill aims to penalize officers and personnel of Public Telecommunications

Entities that Refuse or Fail to Interconnect their Facilities to those of other Telecommunications Operators.

IV. RECENT ITU ACTIVITIES

A. Philippine Convergence Project

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This project has been undertaken by the Department with funding assistance from the ITU.

It has involved the preparation of three key deliverables namely:

1. Revised Draft Convergence Bill 2. National Convergence Policy Framework; and 3. Outline of a Convergence Master Plan

B. Telecommunication Policy and Regulatory Training Program for the Philippines

The Philippines is one of the recipients of ITU Asia and Pacific Center of Excellence one-country programme for training on policy and regulation with the following objectives. 1. To provide innovative training for high level personnel in the public and

private sectors in policy and regulation. 2. To make use of latest available technology and introduce knowledge

management into the training. 3. To provide an important component of capacity building for developing

countries in Asia and Pacific region.

The course will involve a combination of workshop sessions as well as case studies, work-based assignments, interactive discussions, special lectures and access to information arranged on-line.

The tentative date of implementation is on October 2001.