Government mulls subsidy to telecoms sector

Government is studying the possibility of providing an outright subsidy to the telecommunications sector or further liberalize the industry to bring down the cost of broadband services.

Trade and Industry Secretary Manuel Roxas II said yesterday that the high telecommunications cost in the country is "imperiling" the development and growth of the information and communications technology sector.

"The government is studying either paying an outright subsidy or further liberalizing the industry to bring about competitive pricing," he said.

Broadband services provide high-speed and high-quality transmission of voice, data and video via the Internet.

Existing broadband service providers include the Philippine Long Distance Telephone Co., Globe Telecom Inc., Meridian Telekoms, Bell Telecommunication and Multimedia Telephony’s Broadband Philippines.

According to Roxas, the high rates being charged by the existing broadband service providers is due to government’s requirement to put up similar facilities and infrastructure in the provinces.

"The existing providers are merely trying to recover their investments in the provinces by charging higher rates for their services in the urban areas," he said, adding that "these companies have to earn back the money they invested."

The government, according to Roxas, is looking at "alternative ways for them to boost their investment returns to enable them to make broadband services more affordable."