Why telcos can't guarantee minimum 3G speeds?

Why telcos can’t guarantee minimum 3G speeds?

During a press briefing with one of the local telcos last week, the question of minimum speed was again raised by one of the members of the media. NTC has also released a memorandum circular to that effect but I think the issue will continue to linger.

The answer to the question was a bit vague but they promised they’ll do their best to provide it. So, why telcos cannot and will not guarantee minimum 3G (mobile internet) speeds?


Well, there are actually many reasons, both technical and financial in nature, that prevents telcos to guarantee a minimum speed (take note the reasons are for mobile internet only).

  • Nomadic Nature of 3G Users. Mobile internet users are always moving around and as such, the density of users in specific locations at specific periods of time will vary. This means certain base stations may be congested while others are not.
  • Coverage of Cellular Base Stations. Thousands of base stations are spread across the country to maximize the spread of 3G coverage but that’s not yet 100% fully covered. Last time I heard, they have 98% reach of the population (not area) of the country. That’s just cellular reach, which means GPRS, EDGE and 3G combined. My bet is that less than 50% of the population has 3G coverage so they still have a long way to go.
  • Bandwidth Cost & Provisioning. To guarantee a minimum bandwidth means they need to buy more international bandwidth. That minimum speed might not cover the Php999 monthly fee users pay for unlimited mobile internet. I also discussed here the true cost of guaranteed speed.
  • Geography and Topography of the Philippines. The country’s geographic make-up and the topography of each island is so different, it’s a bit harder to set-up towers and get it to maximum efficiency. Our land mass is not as small as Singapore and Hong Kong so telcos need more resources (so much more I guess) to blanket the entire archipelago with a 3G network.
  • Extraneous Factors. Extraneous factors such as weather and other interferences that affect signal quality (let’s not even talk about the NPA that regularly bomb cellular base stations just to get revolutionary taxes).
  • Simple Economics (Law of Supply and Demand). Telcos will never invest in a location where demand for their services are low, sparse or non-existent. That’s the reason why you cannot get any 3G signal in Batan Island in Batanes. The demand is too few to justify putting up one.

If and when the carriers are required to provide minimum 3G speeds, I am sure they will find a way to circle around it. Just read the fine print. Requiring a minimum 3G speed will be a blanket provision (the odds are stacked against them) and they know it will be a losing proposition. I think, and this is just my personal opinion, that NTC memo will not fly and the commission should just look at the quality of customer service first.

My suggestion is that if they can’t make the guarantee, just make it more affordable.

It’s a different story altogether if we talked about fixed-line broadband but that discussion is for another time.

Abe is the founder and Editor-in-Chief of YugaTech. You Can follow him on Twitter @abeolandres.

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24 Responses

  1. chinitoguy says:

    Its sad to know for a fact that MONEY is still the priority over QUALITY. I agree with Mr. Olandres that wireless broadband service should make it more affordable. I found out that compared to other countries our rates are expensive. If you get faster and better service you pay more. My aunt in Florida, USA have an internet service with speeds up to 50Mbps! Wow that’s fast! I ask her if its expensive but she said its not that expensive compared to here that if we get more than 10Mbps it costs more than Php10,000.

  2. netsektor says:

    It’s also a matter of frequency/spectrum, it’s a very limited resource, it has to be divided with all the active customers in a given sector/base station.

    international capacity, although getting cheaper every year with activations of newer cable systems, is still expensive.

    there’s no point in comparing Philippines Internet cost versus the US, South Korea, HK, Japan etc, the factors are different. In the US, the content is there, in South Korea/HK/Japan/China, the content is their country, hence international cable system costs are not that high.

    here in the Philippines, almost 90% of what we consume is outside the country, making the cost very high because telco’s needs to upgrade and upgrade their international capacities.

    Telco’s can offer a minimum speed to comply with the NTC MO, but will consumers like it if the minimum speed of a 1Mbps 999 pesos plan is advertised as 128kbps or even lower?

  3. luilui says:

    Ang hirap din kasi sa Philippines, it is always counted as one. We are an archipelago. If we’re talking about coverage, we should compare ours with Indonesia. Same archipelagic nation, same 3rd world country. So pwede ba natin malaman ang situation ng mobile internet sa Indonesia?

    I was actually surprised that NTC can only auction off 5 3G signals for the entire Philippines. It is indeed very hard and expensive to power the entire archipelago (land + sea).

    Sa phone signal nga, walang Globe sa San Juan (Laiya), Batangas. A tourist spot!

  4. daniel says:

    geography talaga ng pilipinas panget… haha hiwa-hiwalay… kaya ung MRT at PNR hindi pwede gamitin ng taga Palawan… same as 3G signals hindi mo pwede ilagay sa Maguindanao at Tawi-Tawi dahil nasa losing situation ang telcos dun… buti kung ang bansa natin parang USA or Japan or russia …. kabit kabit kaya hindi problema ang services…

  5. zuluzam says:

    I am a TELCO Consultant implementing projects worldwide, saying this, my comment to service providers in the Philippines is ” They are just cheating on consumers”

    Major reasons why 3G is bloody slow in the Philippines are:

    1. Service testing in not implemented prior to launching of the service for commercial use.

    2. RF Optimization for local telcos is crap as they are cutting cost on this vital necessity in a network.

    3. Non strategic cell locations

    4. They have a concoction of equipments in their core network which does not actually match each other to have optimal performance.

    5. Lastly …poor network operations and maintenance team

    They should think of better alibis as there are a lot of telco engineers who really know the reason behind why 3G service in the Philippines does not even meet proper standards. They cannot keep on lying!

  6. raypozas says:

    Agree with zuluzam. You’d think that
    they could offer better speeds since their costs are actually quite low compared to a foreign isp(less pay tech jobs etc). Probably over saturated circuits. Cap you but actually give you less than the public claims. Wish they would totally deregulate and allow foreign carriers in. Competition is what brings down cost. Truth is only 2 competitors(Bayantel-DSL and Sun-cellular are way distant)

  7. PNOY says:

    Nothings change. Still over price? Unreasonable price for the monthly plans of the broadband yet you get very poor service even if your paying with a higher plan. Smart, Globe and Sun just can’t offer the same quality service in the U.S. Why? Because they will not profit in it. In the Philippines, businessmen and local companies, always have in their mind is to gain more money other than offering a better quality of service to consumers. In the end consumers here in the Philippines are always the losers and the Big 3 companies are always the winner and getting richer and richer.

  8. sweetscrazy says:

    a lot of people complain that 3G is slow, when back in the 90’s we were happy to have 56kbps speeds (and 2G SMS) because we used it for essential communication and not to download movies

    • James S says:

      It’s called progress and technological advancement. You can’t say that because our current state of technology is marginally better than two decades ago we shouldn’t complain. We should because there are international standards that we simply just aren’t meeting and we deserve better value for our money. It feels like we’re being cheated of our money when we the service we pay for is unreliable and slow.

      Also what’s the point of offering 3G if all it’s going to be used for is the same things as what 2G was used for. The point is we are given the technology to do what we couldn’t before and we should embrace and optimize it. And if we see that people in other countries enjoy reliable service while we don’t, we should push for better service.

    • getwiththeprogram says:

      Sir, back in the 90s, websites didnt operate with 2mb webpages neither hence 56k would have been adequate. Most webpagss nowadays would require higher bandwidth to function, ie youtube and facebook.

    • sweetscrazy says:

      my point is there’s little reason complain because there are alternatives available like wired internet, hotpots, and 3G phones. If your tv has bad reception, do you complain to the broadcaster? No, you get cable tv or a satellite dish. ‘Nomadic users’ can go to hotspots and internet cafes. 3G phones can have better ‘coverage’ and ‘geography’, while DSL and cable internet doesn’t have ‘rf optimization problems’. If the point is to complain that philippines internet is worse than other countries, then it’s valid but useless (just like complaining about poverty in manila is useless). I tried 3G usb in malaysia/singapore (fast but expensive) and in vietnam (fast and cheap at Php130/GB), and they are overall better than sun or smart bro.

  9. yujinroy says:

    Pricing is one thing, tying down consumers to a 24-month contract is another. Imagine paying diligently for a service that is ok for 6mos. then horribly degrades over the next 12. What options are there left (if any) for a consumer? That particular circumstance, I believe, makes these deals unlawful. Hello, DTI???

    -Sent via YugaTech Mobile App

  10. Scott says:

    The international issue is a mute point. Even on commercial business grade services Telco’s try to avoid making a commitment in this area. The reality is that they control the wholesale bandwidth they purchase for international circuits and they control how much they oversubscribe that bandwidth. In any event they could circumvent the issue by guaranteeing minimum speed to the local hub which is the same as many DSL agreeements.

    The quality of 3G in the country is dropping below usable levels because of poor provisioning and positioning of cell towers. Mobile operators simply need to invest in their infrastructure which they are not doing – even now they like to promote new 4G services as the solution to the crowded airwaves but talking 3G or 4G is just theoretical speeds. I support the NTC here. Is about the actual achieved speeds and not the marketing of a brand (3G or 4G).

  11. So there are always reasons for inconsistency, expect that because its normal.

    • James S says:

      Yeah, inconsistency due to area and supply demand, I can tolerate and understand. I would certainly not expect a 3G signal in the middle of nowhere. But consistent unreliability and poor service, which more often than not is what we experience rather than inconsistency, we shouldn’t tolerate. Those two things shouldn’t be seen as normal.

  12. Jacob says:

    First off, this is a good article. Second, the telecommunications industry is relatively new, compared to the banking industry and the manufacturing industry. Its technology is constantly and more rapidly evolving. Remember when the old rabbit antenna was the only way to capture TV signal? Then cable TV came? Now we have Google TV, Apple TV, etc. Let’s be patient. I have traveled in a number of places and 3G signal is just as crappy, and I mean Malaysia, Hong Kong, the United States. We are not anywhere close to the financial muscles such countries have, to begin with. GSM a bit over a decade old. GPRS and EDGE are roughly of the same age. 3G, 3G+, 4G are much younger technologies. They are evolving and as such, they are not going to be without challenges.

    That said, yes I agree Globe and Smart are both greedy. Sun Cellular tempered their greed by bringing down the rates, and since it started to hurt them, they had to follow suit.

  13. aaron says:

    is it my computer or sun broadband has been really slow nowadays?

  14. zuluzam says:

    @ Jacob

    The TELCO industry is not new. It has been lingering since the 80’s.

    The issue with Philippine TELCOS is purely “Arrogance and Greed”. The 3G network has been launched about 5 years ago but the User Experience for every Filipino is only comparable to GPRS and EDGE.

    Now here is the funny part, GLOBE, SMART and Sun Cellular are boasting LTE FDD/TDD….well …how can these companies claim this where in fact they cannot even fine tune HSDPA services(and that’s just 3.2mbps ). I have even read an article that says GLOBE Tattoo can do HSDPA+ with 5.2 mbps…that’s purely bull. The last time I was there, I tried to use GLOBE’s network and to my surprise, dial ups are even faster than their network.

    One major problem with them is the “Chopsuey” network these providers have. Imagine one MSC with Ericsson,HUAWEI,Motorola,NSN,ZTE,and ALU equipments all mixed up. It actually doesn’t matter if they use multi vendors but its how they assess and plan if these equipments really work harmoniously with each other.In my experience a HUAWEI BSC doesn’t work very well with a E\\ MGW(Media Gateway), but nobody from these networks look into these details.In Metro Manila alone, most of these network’s Transmission Systems are still running on MICROWAVES where in fact they should have already been fiberized 5 years ago based on the evolution projection and requirements. Now they claim they are heavily investing on upgrades. Backhauls are the most important aspect of these networks and they did nothing to improve it.Just imagine, a 3G site with a minimum of 4 e1’s have only been wired with 2 e1’s! Now tell me how would the BTS perform to its optimal capacity with limited resources? Now that is pure technical nonsense and again cheating the customer.

    Knock knock knock…..I thought the CTO’s of these companies are par excellance?

    Well I guess, that’s how they think. They might assume they are saving cost but actually they are just ruining their network, and yes CTO’s in these companies are very laid back in their jobs because they are the old timers.

    I reckon that even if they evolve to LTE, the crap service will remain if they don’t tidy up their planning.

  15. David Z says:

    Or…why make promises one can’t keep?

  16. jp says:

    Isa rin sa factors na nakakaaffect dyan ay ang mababang pasahod sa mga engineers ng mga Subcontractors/Contractors ng Big Telcos lalo na mga nag-iinstall at nagcoconfigure ng mga equipment. Marami akong kakilala na dinudugas ang mga cable, wires at mga parte na mapapakinabangan para kumita basta maikabit lang at gumana kahit may sinusunod na mga standards na mga minimum requirements. Karamihan sa kanina ay nasa minimum lang ang sahod tapos nasa delikado pa ang buhay samantalang mga may-ari ng mga company nagpapasarap at nag-aantay na lang sa bayad.

  17. vince says:

    Maybe it would have been better for the NTC, instead of asking for something technically impossible like a minimum speed, regulate something that is regulatable, like setting a maximum lock in period or something. basta if you get low speeds, you can easily get out

  18. Gismundo says:

    NTC and DTI are craps. How would you expect them to listen to or protect consumers?

  19. eric orange says:

    it is known internationally that in the philippines you get bribe every level and branch in the government. ntc, dti, etc… dream on

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