April 24, 2012
Grace in Mono: Localizing the internet in the Philippines

PHOpenIX must address critical issues before fostering interconnects.

Grace Mirandilla-Santos | April 24, 2012

In this interconnected world, no economy can grow without the internet. Several studies have shown that a 10% increase in broadband penetration could improve gross domestic product (GDP) and labor productivity, especially in low– and middle-income countries. But apart from access, the quality of connection defines how the internet can bee exploited for development.

Internet exchange points (IXPs) are facilities that allow ISPs to connect directly to each other and exchange traffic using local infrastructure. Naturally, the shorter distance lessens latency, improves connection quality, and reduces the transmission cost of using third-party networks and expensive international links for routing traffic.

The Internet Society recently released a pioneering study that, for the first time, quantifies the positive impact of IXPs in emerging countries, like Kenya and Nigeria. The report attributes annual savings of at least $1 million for telcos, plus millions in additional revenues from new traffic, speeding local data exchange, and encouraging locally hosted content and services.

While developed nations in North America, Europe and Asia have long reaped the benefits of IXPs, countries like the Philippines have yet to exploit it. Internet users in the Philippines contend with a rather ridiculous situation. If A and B are subscribers of different ISPs, data from A will have to travel outside the country—making several hops to the US then to Hong Kong and Singapore—before it comes back and finally reach B. All this, even if A and B are just five kilometers apart!

Clearly, this sounds illogical. But the mere fact that major ISPs are not interconnected means that this makes (business) sense to at least one player.

Not that there is no IX facility available. In 2007, the Advanced Science and Technology Institute (ASTI), the research and development arm for ICT and microelectronics of the Department of S&T, developed the Philippine Open IX as an open peering facility for local ISPs. Several players have already connected to the IX, but without the major ISPs, its impact remains very limited.

Read the full entry here. Visit Telecom Asia for news and analysis for Asia’s telecoms operators.

April 24, 2012
Grace in Mono: What govt can do for the IT-BPO sector

Grace Mirandilla-Santos | April 12, 2012

The Philippines ICT industry recently made a great promise: by 2016, it will contribute as much as $50 billion in direct revenues, 70% of which would come from the IT-BPO industry.

It also promised a projected $150 billion in indirect investments in the economy, primarily through real estate, transport and telecommunications, banking, and taxes.

The country’s economic development authority already sees the IT-BPO segment growing at 15% annually. Much hope is also pinned on the sector in helping ease the country’s 7% unemployment rate and accelerating countryside development. Currently, IT-BPO accounts for only 1.6% of the 40-million strong labor force and 5% of the GDP.

Beginning with the Arroyo administration, the government has been gung-ho on harnessing the huge potential of IT-BPO as a means to leapfrog economic growth. Today, under the Aquino government, the Information and Communication Technology Office of the Department of Science and Technology is raring to tap into this gold mine—a priority in its ICT industry development programs.

All this raving about IT-BPO is for good reason. In recent years, the sector has contributed to the country’s economic growth, together with telecommunications, real estate, housing, and retail trade. The Philippines has already established itself as the clear global number two IT-BPO leader after India, which it had surpassed in 2010 as the main location for business support services.

To exploit the opportunity that IT-BPO brings, what is government doing for the sector?

Read the full entry here. Visit Telecom Asia for news and analysis for Asia’s telecoms operators.

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