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Why do Filipinos pay more for slower internet?

It’s just one of the many questions that kept on popping out in my head recently; why do we pay more for slower internet? Our neighboring countries such as Japan & South Korea feature the fastest internet speeds in the world, and here we are living with expensive and subpar connections.

filipino oligarchy internet

Here’s a rough comparison: in Japan, 35mbps costs at around Php2k a month more or less, wherein locally, a similar deal would be nearing Php6k.

Let’s tackle the basic economics here. If consumers demand for more data, the supply is supposed to meet it halfway at the equilibrium price – the point in a curve where the buyers and sellers agree on (*loud cough* unless we have no choice *cough*). If that has been the case for years already, then factors affecting supply such as technology & costs of production should have vastly improved already, thus shifting the supply curve to the right.

economics slower internet 2

In short, by this time and with this kind of demand, internet data, and SMS costs should have already decreased in price.

One thing to note though; substitutes are also popping out recently. 4G LTE is becoming the main focus for telcos now, so by increasing the price of broadband internet, demand for 4G LTE will increase – which might have influenced the high price of internet today. But even with that said, the development of our internet speed is still on the slow side.

A similar case is presented in one of our past articles too – “In the age of mobile data, is an SMS still worth Php1?”. Our guess is that, a slight decrease in price (even .20 cents) would decrease a company’s profit by hundreds of millions in a year.

Price control isn’t the best thing to do for economic growth, unless however abuse is shown by the producers. If that’s the case, then our government should step in and implement a price ceiling.

I guess we’re stuck here guys; we’re under oligopolists. It’s the same thing with gasoline, but more complicated because of the oil deregulation law – no government price controls will be there for it.

So what’s the answer? Why do we pay more for slower internet & less data? I guess the answer’s already above; we have no choice. Personally, a good start to fixing the problem would be to talk about it.

Maybe if the government and the companies start hearing that we care so much, or maybe we can push an amendment in the constitution that would trash the 60/40 ownership rule to attract foreign investors (more choices, more competition & more innovation), we’d have cheaper and faster network services in the Philippines.

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Avatar for Bob Freking

Bob Freking occasionally contributes articles to the website. He is a UST Graduate of Commerce & Business Administration, Major in Marketing Management, and a full-time Sith Lord with three dragons.

79 Responses

  1. Avatar for coco coco says:

    I completely agree with you. I am from Japan and staying in your country now. But I am thinking to leave soon.
    I can’t stand such a slow speed, much slower than I expected before.
    Now I am using both smart and globe, both are terrible, but no choice as long as you are staying in this country.

    The service of customer center is also terrible. This is colored by your nationality. Staff has no brain so they are always helpless.

  2. Avatar for Edward Marsh Edward Marsh says:

    Globe recently downgraded 999 peso broadband.Started from may 1 i was told.i paid 999 on may 27 and no one told me about no more unlimited.i and others before me visited the globe store in la carlota.the store circular went out on june 9.its unlawful.complain? yes but who cares.

  3. Avatar for xdarkx xdarkx says:

    Another article which should be bitch-slapped on Bum Aquino…

    ***********

    “One thing to note though; substitutes are also popping out recently. 4G LTE is becoming the main focus for telcos now, so by increasing the price of broadband internet, demand for 4G LTE will increase – which might have influenced the high price of internet today. But even with that said, the development of our internet speed is still on the slow side.” – But then, these LTE’s, as I’ve inquired with Scumbag Globe, also have data caps… >.<

    "Price control isn’t the best thing to do for economic growth, unless however abuse is shown by the producers. If that’s the case, then our government should step in and implement a price ceiling." – But then, even government is f***ing us up. Sigh…

  4. Avatar for Nein Nein says:

    When you have backwater and war torn countries like Ghana and the Democratic Republic of Congo beating the PH in internet connection, there’s no denying something went terribly wrong.

    No, don’t give me the tired excuse of, “but we’re so poor so we take what we can get.” It reeks of complacency and mediocrity that these crooks heading these companies easily take advantage of. When the Philippines is surrounded by tech giants such as Korea, Japan and Singapore on both sides you’d think the country would follow suit, but look where we are. I sometimes wonder if this is a cultural thing wanting to be as less Asian as possible by being shitty, but as already mentioned it’s just good ol’ oligopoly at work.

    The country has the resources and potential to pull off decent internet. It’s just that the current business attitude there is so toxic it’s pulling everyone else back hard.

    • Avatar for Zobel Zobel says:

      PH is just as backwards. Even more so. Even the Neanderthals were far more civilized than this beloved shithole of ours.

  5. Avatar for Joseph Rayne Joseph Rayne says:

    Simple. PLDT control the backbone of the internet connection to and from the Philippines. And like one of the comments and PLDT doesn’t want it to be open like in other countries. Ganid lang ba. Don’t tell me cost and stuff… with the copper wires, for telephone, they have installed ages ago nabawi na nila ung investment nun and made more. And ang claims nila na fiber optics na sila, oo, servers nila, pero it is still copper wires na nakalatag outside.So getting the backbone won’t be a problem for them financially.

    Used to be PLDT. Then the habagat happened, took them 2 months to restore it. And during the period, a total of roughly 20hrs sa phone trying to get it restored sa Call Center nila, talked to 2 supervisors, went to their Business Center twice, and gave misleading information. In some instances conflicting pa. That’s the time I tried by brother’s Wi-Max, and to my surprise, wireless ang main connection at 3x speed ng download at 150 kpbs sa torrent, same price lang sa PLDT. After they successfully restored the dsl connection sa area namin, they offered no “pakunswelo” or stuff.

    Now we transferred houses, I’m doing a parallel test with Globe Wi-Max and SkyBroadband. Into my 2nd month, and SkyBroadband is winning by a mile.

    I guess what worked before kaya maganda connection ko sa Wi-Max is because we lived near a Cell site.

  6. Avatar for Smokescreen Smokescreen says:

    Profits from internet services is already hitting a plateau. As expensive as it is now….internet providers have figured out a way to make the expensive internet service….even more expensive!

    Presenting the CAPPING of your internet usage. Mahal na yun internet, gusto nila mag upgrade ka pa to a higher and of course more expensive plan.

  7. Avatar for Mr. Butch Mr. Butch says:

    Another reason why our country has slow internet speed compared to others is maybe because we can’t afford the bandwidth. So yes, it is important to get investors so that we can afford higher bandwidth. I also think the bandwidth allocation we have as a country is not as accommodating as in the US for example. I mean, we have lower speed and we have a smaller “bowl” of internet connectivity to share amongst us. That’s probably one of the reasons why the price is still high.

    Lastly, something funny to share, I just tried pingtest and speedtest. I have a Globe connection. When I do the test using Globe’s or any local server, the results are fine. But when I used off-shore ones like Seoul and HK, the results were better/faster, hehe–proof that the connections off-shore are faster and more stable.

  8. Avatar for gardo gwapo gardo gwapo says:

    why do filipinos pay more for slower internet? isa lang ang sagot ko dyan, mapa-upper class, middle class at lower class ka man, tayong lahat ay uto-uto.

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