Increasing Competition in the Telecommunications Sector of the Philippines
RSN-PCC Working Paper No. 16-003
88 Pages Posted: 9 Dec 2016
Date Written: November 4, 2016
In the advent of broadband technology, the telecommunications sector plays a more important role in the development of the economy. Despite the need for cheaper, faster, and more stable internet connectivity, the Philippines currently lags behind its ASEAN neighbors with an average broadband speed of 3.5 Megabits per second (Mbps) at a relatively high subscription price at USD 24 per Mbps. With the subpar quality of service provided by the incumbent operators, the sector still manages to be one of the most profitable industries in the country, which the proponents hypothesize to be due to the lack of players in the market; eventually raising concern over the state of consumer welfare.
Given these issues, this paper seeks to understand how and why the industry reached its current state through an in-depth industry analysis: evaluating the industry’s value chain, market structure, market performance, and possible anti-competitive behavior. With this examination, the paper looks at possible solutions to increase competition in the industry, of which we recommend regulatory local loop unbundling to open the doors to open network access as well as updating regulations and penalties to ensure industry player’s compliance to anti-competitive laws.
Keywords: Competition, Telecommunications Industry, Broadband Technology, Local Loop Unbundling, Anti-Competitive Behavior
JEL Classification: D23, D24, D43, K21, L22, L25, L41, L42, L44, L96
Suggested Citation: Suggested Citation