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- West Bank/Gaza, 06/05: Kafa Kids Get a New School
[pdf, English
/ Arabic]
- Egypt, 05/05: First Lady Laura Bush Meets Egypt's
Alam Simsim Muppets [html]
- West Bank/Gaza, 05/05: USAID Invests $6 Million
in Job Creation [pdf, English
/ Arabic]
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Telecommunications in the Philippines: Better Laws and Better
Service
Like the rest of its neighbors, the Philippines was hit hard
by the Asian financial crisis in the late 1990s. Recovery
has been slow, due in part to corruption and weak legal infrastructure.
One industry that remains a dynamic source of jobs and revenue
is the telecommunications industry.
Because of the potential of telecommunications, the government
of the Philippines is making major efforts to support its
development. In 1995, the government began by sponsoring the
National Telecommunications Act and asked USAID and other
international donors to assist in reaching the law's objectives.
Its major goals included expanding phone service throughout
the country and increasing competition between companies.
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Condo Diwa, a Moro National Liberation
Front combatant-turned-seaweed farmer, calls his buyer
from his mobile phone. He also uses his phone to obtain
and compare market prices for seaweeds. His transition
from combatant to seaweed farmer was made possible through
USAID's Livelihood Enhancement and Peace (LEAP) Program.
Wider coverage and more affordable
services are just some of the benefits of increased
competition in the telecommunications sector that the
Philippine Government, with USAID assistance, has managed
to achieve.
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The first phase had some notable successes. When the program
started in 1995, there were 1.5 million landline phone subscribers.
By 1997, there were 3 million. Even during the financial crisis,
subscriptions continued to expand. However, the Act fell short
of reaching its goals for several reasons. Telecommunications
companies were required to make huge investments in landlines
but were only allowed to keep their licenses for 18 months
to three years before they had to reapply. That made investing
in the sector much less appealing. In addition, cell phone
usage exploded, making landlines less popular. In the end,
companies had more lines than were being used, and consumers
paid fairly high prices for phone service.
At this point, it was obvious that a new set of rules was
necessary, and USAID supported the National Telecommunications
Commission in developing them. The new plan provides clear
incentives for spreading service and improves the license
regulations, making the industry much more rewarding for investors.
This led to increased competition between companies, which
in turn led to lower prices and more options for consumers.
At the suggestion of USAID-financed consultants, companies
began offering consumers flexible pricing plans according
to their level of use. These new pricing plans were an immediate
success. Instead of paying 500 pesos (approximately $10) a
month for phone service regardless of how frequently they
used it, consumers could now choose whether they wanted a
fixed monthly fee or whether they wanted to pay by the minute
or with a pre-paid card. These new options were an immediate
success, leading to increased phone use around the country.
Increased use gives companies an added incentive to expand
service. In the past, finding a telephone could mean a day
or two of traveling for people living in remote areas. The
new laws are bringing phone service closer for everyone.
It is a win-win situation for both sides. Companies' lines
are being used more extensively, generating more profits;
and consumers pay lower prices and have more choices.
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