Philippine ISPs undergo makeover

PHILIPPINES--The country's Internet access industry is undergoing major changes with traditional Internet service provides (ISPs) now making way for multi-service, multi-focus companies offering services that go beyond basic Internet access.

According to William Torres, president of industry group Philippine Internet Services Organization (PISO), Internet companies in the Philippines have transformed their business to align themselves with emerging market demands, such as online games and communications.

"We have seen how traditional ISPs, which have invested heavily on providing Internet access [services] only, may have had to close shop or transform themselves to keep up with emerging demands," Torres said, in an interview with ZDNet Asia.

He noted that the industry is moving away from traditional online services, "forcing" these companies to transform.

Also the chairman and president of local ISP Mozcom, one of the largest Internet services companies in the Philippines, Torres said the availability of broadband and falling broadband rates have paved the way for the emergence of smaller ISPs that have overtaken their larger peers in terms of presence and customer base.

The wider availability of broadband services has proven to be a catalyst for small service providers to enter the access business, and in the process, grab a significant piece of the pie that "traditional" ISPs previously dominated, he said.

More importantly, Torres added, growing segments of the Philippine society are "discovering more and more uses" of the Internet.

"Suddenly, demand for cheaper alternatives for voice calls such as VoIP (voice over Internet Protocol), [is providing] a good source of revenues for small cafés, with more and more customers, particularly those with relatives and families abroad, discovering the technology and how easy it is to walk into a neighborhood café and make that overseas call," he said.

According to Torres, PISO projects that only a handful of ISPs still play in the access-only business, where the majority are now opting to diversify their services.

"By our own estimate, we have some 200 to 300 value-added service providers in Metro Manila alone," Torres said. More than 20 of the country's largest ISPs now offer VoIP services, including Mozcom, he added.

By PISO's unofficial estimate, Torres said there are some 1.4 million Internet subscribers in the Philippines, and 600,000 who access the Internet wirelessly.

However, he added, the actual user base could be as high as 9 million to 10 million because some of these individual subscribers may be small Internet cafés, which are "common access centers" for several other to access the Web.

Torres noted that government agency National Computer Center (NCC) is currently conducting a nationwide Internet survey, though developments are still under wraps due to the scope of the project. "The NCC survey will give us a more accurate picture on the number of Internet users, and Internet usage in the Philippines," he said.

Role of the government
Meanwhile, the Philippine government is urging for more changes in the Internet industry and calling for cyber cafés to promote Internet adoption, Torres said.

The emergence of Internet cafés as multi-purpose centers has prompted some government agencies to look these centers as possible solution to extend adoption, particularly in rural areas across the Philippines.

Torres explained: "The government's Commission on Information and Communications Technology (CICT) and a host of private associations are working hand-in-hand in encouraging more ISPs to promote access."

He added that the government is looking at establishing "e-centers", which can be deployed to allow more rural areas to have Internet access.

The task, however, is daunting, Torres said, considering that the country is an archipelago and wireless broadband access is much more expensive than fixed-line broadband.

"But for areas that can be reached by a telephone line, these multi-purpose centers will help promote access," he said.

The Philippine government said it currently has 700 community e-centers scattered nationwide.

Torres said some smaller cyber cafés can even specialize in providing only VoIP services, particularly in areas where there is a large concentration of individuals with family members working overseas.

Joel D. Pinaroc is a freelance IT writer based in the Philippines.