Telecommunications in the Philippines

the importance of distance and creates more

opportunities in peripheral areas.
The digital divide refers to the disparity
between those who have access to and use of Moreover, the micro data extends the
information and communication digital divide discourse from issues of
technologies (ICT) and those who do not access, either to basic telephone services or
(World Economic Forum Global Digital the Internet, to include the nature of use and
Divide Initiative). A product of the natural perceived benefits of telecom facilities. The
evolution of "the information haves and paper thus addresses the emergent interest
have -nots" discussion just before the turn of on the quality of content gained through
the century (Cronin, 2002; Compaine 2000), telecom access, which is crucial in efforts to
the digital divide discourse becomes more realize the potential of telecom in fostering
significant with the increasing importance of development. Finally, inasmuch as the
ICT as a tool for social, political and digital divide exists depending on the groups
economic development (Pitroda, 1996; being compa red and the indicators being
Compaine, 2000). Interestingly, however, used to compare them, the paper explores
the digital divide itself is both a reflection various measures, following different
and a product of many other socio-economic perspectives on communication technology
gaps that exist in various societies (Cronin and development, to discuss telecom access,
2002; Compaine, 2000) use and perceived benefits.
This paper discusses the digital divide in
the Philippines. Using macro data from the
country's National Telecommunications
Union and the International
Telecommunications Union as well as micro
data from a study conduc ted in two of the
country's 16 regions, the paper examines the
digital divide in the context of
telecommunications access, nature of use
and perceived benefits. The two data sets
help present a holistic map of the digital
divide ? within the country from the local to
the national levels, and ? between the
country and its immediate neighbors. These
two levels of analysis both consider
geographic location and income to check
whether telecommunications indeed
diminishes geographic isolation or
reinforces the centrality of already
established commercial and urban centers.
This way, the paper contributes to theorizing
Located in Southeast Asia, the
on the supposed more equitable order that
Philippines is a democratic nation of 75
telecommunications helps develop as it blurs
million people. An archipelago of over
7,100 islands, the country is divided into 14
geographic and three administrative regions.
Despite the dispersed nature of its
topography, political and economic activity
is centralized in the National Capital Region
(NCR), where Manila, the capital is located.
Though only 14% of Filipinos live in this
region, it accounts for nearly a third of the
Philippine Gross Domestic Product. For 20
years until 1986, the Philippines was under
President Ferdinand Marcos, who
centralized government under his
authoritative rule. While several high-profile
infrastructure projects were undertaken
during his extended term, many other
utilities were poorly developed under
nationalized and/or monopolized agencies. It
was only in 1987, upon the assumption of
President Corazon Aquino, that the reform
and the deregulation of these agencies and
the industries to which they belong started.
Telecommunications was among those that
lagged behind, even if it were crucial in
virtually connecting the country's many
islands in the absence of a strong public
works network.
The roots of the digital divide in the
Philippines, however, can be traced much
earlier. In 1928, an exclusive franchise to
develop the country's telecom backbone was
granted to the Philippine Long Distance
Telephone Company. Though this meant the
installation of 30,000 new lines, it
eventually translated to a decline in the long-
term telephony in the country. Until 1987,
teledensity in the country remained at 1:100.
Fortunately, reforms in the industry have so
far led to significant growth in the number
of telephone lines in the country though
actual subscription to these lines remain low
because of personal cost conside rations and
the country's over-all weak economy
following the Asian crisis.
But the centerpiece of the country's
telecommunications industry is the
significant growth in the subscription to
wireless services. Though introduced only in
1989, cellular mobile telephone services
now have 11 million subscribers, or almost
double the year 2000 figures. The growth is
driven by the services only originally
available in mobile phones (text messaging,
pre-paid payment schemes) and the poor
landline infrastructure in the country
(compared to the presence of cell sites
across the archipelago).
That the communication sector is crucial
in the country’s development is reflected in
the government’s policy statements.
Conversely, policies on the communication
sector are important as they "inevitably
influence the flow of information, and thus
the trade of goods and services. More than
ever before, telecom policy can affect the
location of jobs and the competitive position
of firms" (Fetekuty, 1992). The 1987
Philippine Constitution states, "The State
recognizes the vital role of communication
and information in nation-building."
The concept of space is pivotal in the digital
divide discourse. Spatial structuralists who
concern themselves with “aspects of
economic development that have geographic
or locational significance,” believe
interventions in the pattern of human
settlement functions in a territory can initiate
and sustain its progress. And while
heretofore, linkage infrastructures have been
synonymous to transport networks
(Friedmann and Weaver, 1979), the world is
now at the throes of a “new economic
revolution equivalent to the Industrial
Revolution, wherein the strategic
infrastructure is the telecommunications
system” (Fetekuty, 1992).
Telecommunications is now seen as a
“factor of production,” in the same way that
railroads promote economic growth
(Williams, 1991).
However, "contrary to popular
predictions of their decentralizing impact,
digital communications contribute to new
and more complex forms of corporate
integration, reinforcing center-periphery
problems on a global scale" (Gillespie and
Robins, 1989). Further, "in spite of
considerable talk about the `death of
distance' and `the end of geography,'
computer technology appears to accentuate
the importance of place, both physical and
virtual… Rather than think about this as the
death-of-distance, it is more useful to refer
to the transformation of space made
increasingly salient by the introduction of
ICT. In the sense of physical geography, the
use of ICT reconstitutes the spatial map by
revalorizing locations and relations between
them" (Mosco 2000).
That telecommunications has so far
reinforced than diminish centrality of
primary cities is evident in the
telecommunications profile in the
Philippines. While only 14% of Filipinos
live in National Capital Region (NCR), it
accounts for over two-quarters of all
installed telephone lines and exactly half of
all telephone subscribers in the Philippines.
Similarly, the regions of Central Luzon (III)
and Southern Tagalog (IV), which
immediately surround the NCR, are the next
more wired regions in the country.
Collectively, these three contiguous regions,
the economic powerhouses of the
Philippines that have 55% share of its Gross
Domestic Product, have two-thirds of all
telephone lines and 71% of all subscribers in
the country. The only other regions that have
significant connectivity are those which
have urban centers of scale: Region VII with
its Cebu City and Region XI with its Davao
City, the commercial cores of Visayas and
Mindanao respectively.
The same relationship among
population, incomes and connectivity exist
even within the specific regions themselves.
Telecommunications data for Region 3 (see
Table 3) illustrate this. Bulacan, the
province which shares boundaries with
NCR, has the region's most number of lines
and subscribers. Its proximity to NCR
determines in part its population and
provincial gross domestic product. Its
increasingly urbanized nature is due to the
fact that it is becoming a "dormitory town"
for the many workers who cannot afford
housing within NCR and that factories are
beginning to locate there as well because of
NCR's limited open spaces. Second to
Bulacan in terms of population, provincial
GDP, and telecom development is
Pampanga, which is also the province next
to it.
Beyond issues of centrality of
geographically situated settlements,
however, another important issue in the
telecom digital divide in the Philippines
pertains to the level of subscription to
available landlines. Across the country, only
43% of all landlines actually have
subscribers. Across regions, the highest
subscription rate is in Region II, in the
northeastern tip of the Philippines, where 9
out of 10 phones are subscribed. The level of
subscription is a good indicator that there is
neither a deficit nor surplus between the
levels supply of and demand to telecom
facilities at any given time. Too big a
surplus, as it is the case now in the
Philippines, leads to some amount of
distortion in teledensity statistics. It may
seem as if Philippine landline teledensity has
significantly improved in the last 15 years
from the pre-form ratio one phone for every
100 people to the current ratio of 9:100, the
statistics that government usually uses.
However, actual subscription ratio is only
3.4:100, which is not as significant a leap
from the previous statistic. The poor
subscription rate is said to be a function of
several major variables: the increasing
preference for wireless over wireline
phones, the pricing structure of landline
phones relative to household incomes, the
generally poor economies of scale across the
country, and access to landline services
through public payphones.
Comparing the Philippine experience
to that of its immediate neighbors is one way
of examining the existence of a telecom
divide between it and countries of similar
location but of contrasting economic status.
Doing this helps planners define marginal
levels for the nature of the telecom
infrastructure required in an area depending
upon its economic development (Schrage,
2001).
Situating the Philippines in its
regional grouping is in line with previous
comprehensive literature. The digital divide
has been studied between or among US and
the rest of the world (Cronin, 2002),
developing and developed countries (Cronin,
2002; Schrage, 2001; Garnier, 1999;
Compaine, 2000), the countries in Africa
(Cronin, 2002) and in East/Central Europe
(Zassoursky et al), urban and rural areas
within regions (Zassoursky et al; Garnier,
1999), and north and south countries
(Pitroda, 1996).
In Southeast Asia, it is per capita
GDP, and neither population nor GDP per
se, that relates with connectivity. As
opposed to the big countries of Indonesia,
Philippines and Thailand, it is the
comparatively small but affluent countries of
Singapore, Brunei and Malaysia that have
the highest rates of overall-connectivity
according to the three ITU classifications of
main, landline and mobile teledensity. While
this perhaps underscores a telecom digital
divide among countries of various income
levels, there is at least hope that this
disparity is narrowing. Growth rate in the
number of main telephones is highest in the
emergent economies of Vietnam, Cambodia
and Laos. Further, Vietnam, the Philippines
and Indonesia post the highest growth rates
in the number of mobile phones, which
reflects possible preference for cellular
telephone services as landline phone
networks untenable in these wide-area
countries. As it is, mobile phones account
for a significant portion of the region's total
telephone lines, even as the number of
mobile phone subscribers in the region
continue to grow in double digits.
However, inasmuch as the emergent
economies try to catch up with their more
developed neighbors with respect to access
to telecoms, they are a long way from
having equal statistics for teledensity, either
landline or wireless. Moreover, this gap is
even more evident when one looks at the
ratio of computers and Internet users relative
to respective country populations.

If telecommunications networks are
to be the main infrastructures in the
emergent economy, the current plans of
Southeast Asian nations to belong to one
coherent region are difficult to sustain in the
long run given the strong disparities in
connectivity within it. After all, the status of
telecom networks in this case serves as a
good indicator of more basic differences in
the development of the economies of these
otherwise proximate countries.
This section explores
telecommunications use, access and
perceived benefits of landline and mobile
phones across urban and rural areas. It
employed one-shot survey of 180
respondents in the core area of National
Capital Region and the Central Luzon
Region in its periphery.
Data gathering was held in the early
part of the year 2001. Analyses using uni-
variate and multivariate tabulations were
undertaken and appropriate, statistical tests
were performed to determine the
significance of differences in proportions or
in the relationships of variables, to address
criticism of previous digital divide studies
(Compaine, 2002). The formula below was
used to test differences in proportions.
T-test for independent samples was
also used to compare means across sites,
while chi-square test was employed to
compare frequency distributions across
respondent subgroups.
Data for the study were gathered
across Metro Manila and in the province of
Bulacan. Metro Manila, also referred to as
the National Capital Region (NCR) in
government statistical databases, is the
center of national commerce and trade.
Meanwhile, Bulacan, which is primarily
agricultural, is fast becoming urbanized as
its towns and cities become “dormitories” to
the working middle class of Metro Manila.
On the one hand, Metro Manila and Bulacan
have vastly different degrees of landline
telephone infrastructure development. The
two areas, on the other hand, generally have
similar universal mobile phone coverage,
based on the reach of existing "cell sites" in
both areas (www.gsmworld.com).
Both located in the island of Luzon,
Metro Manila is bound to the north by
Bulacan. The southern tip of Bulacan is
around 15 kilometers from Metro Manila
and travel between the two areas can take
only 30 minutes by car in light traffic
(www.bulacan.gov.ph). NCR and Bulacan
share the Manila Bay coastline. Bulacan has
24 towns and cities, with Malolos as its
capital. Of these political subdivisions, the
research was conducted in Marilao and
Meycauayan, two neighboring towns in the
southwestern end of the province. They were
selected for their relative distance from
Metro Manila and the differences in the
development of their economy and telecom
infrastructure. Both towns are in the fourth
provincial district.
Bulacan has a total land area of
2,625 sq. km. Of this area, Marilao and
Meycauayan have a share of 26.25 (1%) and
28.55 (1.09) sq. km respectively. Of
Bulacan’s 568 barangays, Marilao has 16
while Meycauayan has 26. Metro Manila,
meanwhile, is comprised of four cities and
13 towns encompassing a total land area of
636 sq. km. For this research, data were
gathered in Quezon City (central), Kalookan
City (northern), Manila (western),
Paranaque (southern) and Pasig (eastern),
each representing a geographical section (in
parentheses) of the metropolis.
With the belated development of its
landline infrastructure, the Philippines has
thus become one of the leading users of
cellular mobile telephone services (CMTS)
(Carmel, 1998). Because of this, discussions
of the digital divide in the Philippines needs
to include access to mobile phone services,
unlike in countries where these are not
regarded as real substitutes for wireline
phones. In fact, Falling through the Net
"does not track ownership of cellular
telephones or other wireless devices. If
prices continue to decline and these devices
become substitutes for conventional wireline
phones, then future household penetration
studies should include both types" (Irving,
1999).
To help explain gaps in the
teledensity between installed and subscribed
landlines, and the subscription rate between
mobile and landline phones, this study
includes the nature of use of telecom as
Compaine (2002) has asserted.