Low cost internet is the future

MANILA, Philippines —  Telco executives and tech experts believe that the future of Philippine internet lies in low-cost bundles that are now offered by some of the biggest connectivity providers in the country.

As inflation remains a concern for many Filipinos, internet service providers are banking on their respective versions of sachet-sized broadband offerings to keep consumers connected to the internet.

Low-cost packages such as Converge ICT Solutions Inc.’s Surf2Sawa and Globe Telecom Inc.’s GFiber Prepaid are also expected to play a significant role in promoting universal access.

Better Internet PH lead advocate Mary Grace Mirandilla-Santos said the launch of retail internet brings down the cost of getting a wired subscription. Usually, families get a fixed-line connection to serve their connectivity needs at home, particularly for work, study and leisure.

Surf2Sawa, for instance, extends unlimited surfing with a download speed of up to 25 Mbps for P50 per day, P200 for seven days, P380 for 15 days and P700 for 30 days. GFiber Prepaid offers non-stop internet as fast as 30 Mbps for P299 for seven days, P549 for 15 days and P999 for 30 days.

“‘Sachet’ subscriptions are an interesting innovation that have the potential to lower the financial barrier to entry for wired broadband subscriptions,” Santos told The STAR.

Converge, the first to introduce low-cost fiber, managed to grow its subscriber base to more than two million in September with the addition of Surf2Sawa to its product menu.

In addition, Converge brought in a budget version of its flagship FiberX, named BIDA Fiber, that costs P888 a month with a maximum speed of 35 Mbps.

Converge maintains around 116,000 customers for Surf2Sawa and BIDA Fiber as of September, putting it on track to reach its target of 120,000 by the end of the year. The company is confident of its retail segment that it eyes to onboard as many as one million subscribers by 2025.

Globe vice president for brand management Raymond Policarpio said the company entered the low-cost segment to contribute in bridging the digital gap. In support of this, Globe made it easy for consumers to avail of GFiber Prepaid, requiring just a valid ID to proceed with installation.

Globe launched GFiber Prepaid in July, and it hopes to draw in at least 200,000 customers in the first year of its commercial launch.

“The primary goal for Globe is to encourage Filipinos to get fiber broadband in a way that most of the population is now able to purchase and control costs,” Policarpio told The STAR.

However, Santos warned that these low-cost products rely on the same network as the ones used by telcos for their regular-priced services, casting a doubt on their consistency and reliability.

Converge, for example, hopped on the retail market partly because it wants to maximize its fiber network. Converge ended the third quarter with 8.79 million ports and 2.05 million subscribers, leaving it with almost seven million lines without a user.

“As a new business model that shares the same infrastructure, they are likely not much different from the more traditional subscriptions in terms of accessibility and reliability. On affordability, it remains to be seen whether the new plans will have a substantial impact on the average cost of fiber broadband,” Santos said.

The launch of low-cost broadband comes at a time when Filipinos are dealing with price spikes, with inflation averaging 6.2 percent as of October, well beyond the target range of two percent to four percent set by the Bangko Sentral ng Pilipinas.

The International Telecommunication Union, backed by the United Nations, is pushing countries to bring down the cost of internet access to two percent of the average wealth of a citizen, measured as gross national income (GNI) per capita.

In its estimates, the agency found out it requires 11.26 percent of the GNI per capita to subscribe to a broadband connection in the Philippines, one of the most expensive in Southeast Asia.