PDIP won’t boost Philippine fibre uptake unless prices come down: BMI

Details: John Tanner; Category: Optical & Fixed Networks; 05 July 2024; 7472 views

The Philippine government’s new project to expand the reach of fibre broadband across the country will result in more lines deployed, but it won’t get more people connected if services are too expensive, says analyst firm BMI Country Risk & Industry Research.

Last week, the National Economic and Development Authority (NEDA) approved the Philippine Digital Infrastructure Project (PDIP), which aims to improve and expand fibre broadband infrastructure across the country, especially for remote areas.

The PDIP includes building backbone, middle-mile and last-mile FTTx networks, as well as network security and project management. The NEDA has authorized a price tag of P16.1 billion (about US$274.4 million) for the project, which will be funded by loans from the World Bank.

However, according to local media outlets, a report from Fitch Group’s BMI earlier this week said that whether the project helps to boost the Philippines’ internet population will depend on whether the resulting services are more affordable than they are now.

BMI estimates that fibre connections in the Philippines will reach 1.58 million this year, and then grow to just 1.83 million by 2033. BMI stressed that the main obstacle to fibre uptake is cost, “particularly stemming from the elevated costs of rollout that are further increased by the Philippines’ archipelagic configuration.”

Much of the projected growth is expected to come from uptake in metro and suburban areas, driven in part by moved from PLDT, Globe Telecom and Converge ICT Solutions to offer low-cost fibre packages. Consequently, the BMI report said, “the PDIP may only provide marginal upsides to our outlook.”

That said, BMI reckons the PDIP could help by executing and managing the project in ways that encourage wholesale network providers and ISPs to lower the price of fibre packages, particularly “by extensively co-financing last-mile area rollout”.

According to 2022 figures from the World Bank, the Philippines is one of the most expensive fixed broadband markets in ASEAN, with prices more than double the regional average.