3rd telco can drive economic growth – analyst

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The expected entry of China Telecom as the Philippines’ third telecommunications player can lower the cost of telecom services and boost the country’s economy, an analyst said.

In a phone interview, Summit Securities Inc. President Harry Liu said a new industry player that would compete against the country’s two dominant telecom firms is needed to bring down costs and increase internet speed.

Noting that neighboring countries have inexpensive yet quality broadband access, he said it was about time for the Philippines to explore ways to better serve its people.

Cheaper and better internet access can drive economic growth as broadband penetration in the country will increase and end-users will become more active in cyberspace, he added.


In December, National Telecommunications Commission chief Gamaliel Cordoba said that “[f]or every percentage increase in your internet penetration and speed, there’s also a corresponding increase in GDP (gross domestic product).

According to the World Bank, every 10-percentage-point improvement in broadband penetration increases a developing country’s GDP by 1.3 percent.

Liu said PLDT Inc. and Globe Telecom have to boost their network services, because the one doing the better job at it would benefit more.

PLDT Chairman Manny V. Pangilinan disclosed in December his company’s plan to allot more than P50 billion in capital expenditures (capex) to improve its network, while Globe CEO Ernest Cu said in October his company may keep its capex at P43.7 billion.

Globe spent its capex last year on expanding its mobile data network and deploying long-term evolution (LTE) cell sites.

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