This article is in reaction to Cito Beltran’s column on the Philippine Star as well as Tonyo Cruz’s blog entry on the Asian Correspondent. They both talked about how inefficient the Internet Service Providers (ISP) are in the Philippines. I agree with them 100% but I think the person that really hits the nail on the head here is Paul How who blogs at Colorful Rags. In his entry, Paul says that the profit motive is something that we can’t really do away with. At the end of the day it’s a business and the ISP’s will try to maximize their margins. Let me quote:
The quest for an alternative, i.e. better service is not one that would exclude the profit motive. As I said, profit-seeking is a fact of life. CEOs do it. Salesmen do it. Wage earners do it. And by profit, we need not merely refer to monetary gain, but also to emotional satisfaction.
Accepting the profit motive as a part of all human affairs, we must now see how it could be applied to the greatest advantage of both buyer and seller. The key here is eliminating restrictions to competition. Competition is what progress is all about. Nothing encourages the raising of quality and the lowering of prices, as competition does.
This made me think hard about the ISP industry here in the Philippines. If you think about it, we only have a handful. There’s SMART, Globe, Bayantel, Sun, Destiny Cable, Sky Cable, PLDT, and Wi-tribe. I got in touch with some friends who are in Canada and asked them about their situation there. Imagine my surprise when I found out that Canada had hundreds of ISP’s that consumers can pick from!
The very core of the problem today is that we only have a few players in the ISP industry. Competition is not that high and what’s sad is most of the providers just copy each other’s gimmicks to increase their profits. Tonyo wrote in his blog that he was calling for an end to pre-termination fees for ISPs. Most, if not all, of ISP’s here have that clause in the contract that you sign with them. In Canada, it’s totally different. Since there are a lot of ISP’s, the power goes back to the consumer. Since consumers find pre-termination fees dubious, then the ISP’s that offer no pre-termination fees are the ones that get the business.
Here’s a link to the Joint Terms of Service of Shaw, an ISP in Canada. If you scroll down to the part on the termination of services, you’ll find these two simple clauses:
1. You may terminate the Services for any reason at any time by notifying Shaw of your desire to terminate. Such termination shall take effect upon the expiration of the then current billing cycle. Since you would have paid for the Services you are terminating in advance up to the next billing cycle date, no credit or refund will be payable in respect of such terminated Services and you will remain responsible to pay any charges due and payable as of the date of termination.
2. You agree that if the Services are terminated for any reason you will: pay Shaw in full any amounts due and outstanding for your use of the Services and return the Rental Equipment to Shaw; and permit Shaw to access the Service Location at a mutually agreed upon time to remove the Rental Equipment and any other equipment or materials provided by Shaw if you fail to return same to Shaw as required under these Terms of Service.
No pre-termination fee. All you have to do is to settle the balance and return the equipment that Shaw “lent” you like the modem.
Allow me to train my guns towards a local ISP’s Terms of Service. This one is from Wi-Tribe. You will notice a huge difference in how both entities conduct their business. This is a good example of how a company can be consumer driver or profit driven.
c) Renewal – The subscription shall be automatically renewed after the Minimum Subscription Period unless Subscriber gives wi-tribe 30-day prior written notice of termination.
d) Subscription Plan Upgrades and Downgrades — Subscriber’s requests for changes in the Subscription Plan shall be subject to wi-tribe’s approval. If approved, the corresponding adjustment in rates and fees shall be effected in the billing cycle following the approval. Plan downgrades within the Minimum Subscription Period shall make Subscriber liable for the pre-termination fee as per Sec. 2(d).
My main problem here is that they are making no effort at all in asking the subscriber if they’re happy or not with the service. The “automatic renewal” is something that they can easily get away with. And here’s the clause that talks about the pre-termination fee:
d) Pre-termination Fees — If Subscriber pre-terminates or cancels the subscription before the end of the Minimum Subscription Period, Subscriber shall pay a Pre-termination Fee proportionate to the balance of the Minimum Subscription Period, plus the full cost of the CPE.
I was told that the minimum subscription period is 2 years. This means that if you find out that the service sucks in the first 3 months, you have no choice but to pay Wi-Tribe balance 21 months just to terminate the service. It’s locked revenue for them. This is so anti-consumer.
So what’s the solution? Some people are saying that the National Telecommunications Commission (NTC) should step in and regulate the Telco’s. That might be a good starting point but I agree with Paul in his blog. The main issue here is that the competition isn’t too hot in the Philippines. We’re limited to just 8 ISP’s, all of which are using pretty anti-consumer service contracts. So the question we should be all asking ourselves and the NTC is this: why are there only 8 ISP’s?
Based on Republic Act 7925, the approving body for Telco’s (in turn means ISP’s as well) is the NTC. I skimmed through RA 7925 and it’s obvious that we have to revisit and amend this law to make it easier for businessmen to start their own ISP’s to raise the level of competition here in the Philippines. It follows that we’ll see better products, prices, and customer service from telcos.
Cito Beltran said this in his article:
It also shows us that the telecoms have been making billions of pesos through INTENTIONAL INEFFICIENCY.
For now it looks like we’re all held hostage to this practice. However if the NTC does their job right and finds a way to get more ISP’s in the country to offer their services then the INTENTIONAL INEFFICIENCY is actually the weak link in the chain of the giant telcos in the country. If a company manages to offer good rates, decent speeds, and pro-consumer contracts then they might find themselves on top of the food chain faster than they ever imagined because of how hungry Filipinos are for decent and fair ISP’s.
Some Personal ISP History
I’ve changed my Internet Service Provider (ISP) several times already over the past few years. I was initially using PLDT DSL then I switched to the more affordable SMART Bro. However SMART Bro became SMART Broken and I had to terminate it and even pay pre-termination fees because I didn’t finish the contract. From SMART I tried using Bayantel. The main problem then became intermittent connection. I’d have good internet midday but it will go on and off during the evenings. When I moved to San Juan I decided to go for Sky Broadband but they did’t cover my building. So I went back to PLDT DSL. Changed condo units recently so I decided to just go with Sun Postpaid Broadband for now while figuring out which ISP I’ll use for the long term.
Hey man!
I’ve been b*tching about local ISPs for YEARS. From lousy service to even lousier customer service to very anti-consumer termination plans… it’s just plain WRONG. Right now I’m stuck with an ISP that won’t let me terminate the plan unless I pay 200% of the monthly service fee, and return the modem. HASSLE!
So now I’m stuck with them, waiting for a chance to pay them back. Like what I did with the previous ISP… I didn’t pay for the months I owed them because they PROMISED me 1) a refund for the month long service they disconnected due to network problems and 2) inability to send me MY BILL FOR 4 MONTHS. Basically, I just refused to pay them because THEY owed ME. I’d been a loyal subscriber, always paid on time and in advance, AND THIS IS HOW THEY REPAY ME?! With LOUSY EFFIN SERVICE?
But now I switched, and sadly, it wasn’t any better. And now that I want to get rid of it and change to another ISP, I can’t without having to pay a hefty sum.
Hehe, dude, I will blog this entry of yours, pero in all honesty, it’ll just be another blog entry among many many other blog entries on the same thing… how sad. Years later it’s all still the same.
I am new to it (1 year) experienced Globe DSL3mb which was ridiculous, had to teach every staff how to test and why it was F*, until they called manila and admired that the 3mb installation was in fact 2mb capability. Now i am a “puty” so i’ve fought hard for this, and I know my shit, i can’t imagine granny calling globe about bad DNS server and freaking shaping on my lines!@#!@#
I Come from china, so do give me the “3rd world card” or “we pinoy go with the flow”, (hell i moved here for these exact reasons but it ain’t the issue) the Chinese don’t cap, don’t shape, don’t even overcharge, and they have been trying to learn how to execute customer services to actually benefit both side of the big business (Which is what stoke me when reading this article… )
They are far from being good at customer services I mean they still can’t really make decision or be effective, it’s asia after all But they are effectively learning how to managing services (I guess in hope to adopt a Japanese old mentality of super-efficency by improving everything always instead of saving and lowering quality…Which is so not the Chinese way nor the Pinoy way if that matter.
So what else?
.Without going onto changing corruption (which i would assume for 80% of the management strategy, really Philippines is the most corrupt place i’ve seen and that’s because the clients(in any situation) are literally the target for any scam).
So lets assume the Filipino’s ISP will have the lee-way to cheat their people (this goes to culture… turn to mommy and daddy then look in the mirror!) (Also good to know: a 10$ a day clerk was telling me over the phone which sites I had visited, I didn’t even asked her, she just use this everyday… how much to bribe these clerks for a peak at your next big corporate deal you want info on, I wonder?? )
IE-> Globe/smart were actively involved in the writing of the rules regarding caping and most likely are the one who have written the official LAW.
(Remember that when you cap a 2mb(avg.1mb) and shape the torrents and browsing on a bunch of dead DNS with some of the oldest and inefficient network in ASIA : WELL ITS ALMOST IMPOSSIBLE TO REACH THAT CAP unless you watch a youtube movie and only one!?)
So since I turned to reading legal documents and PLDT was fun:
-PLDT reserves the right to, Edit, cancel, suspend, filter newsgroup Post among other rules.
This is literally the same as if a landlord FUCKS a tenant’s wife just because it reserves the right to use(Edit, cancel, suspend, filter) anybody(account) a tenant has in the house(use the network).
(By the way, I did call them to provide the “Annexes” and the “other documents” mentioned in the contract. PLDT was unable to do so and are still actively looking to answer my request and are very sorry for the, NOW 2month, delay)
That’s gotta make you smile!?
Philippines need a “Revolution”…The day Filipinos understand that a revolution’s success is not judged by whom you beat but how it changes YOU.
Carlo, thank you for writing this. I hope this gets a wider audience. I have also been wondering about this outrageous terms of services but I didn’t know what to do.
So far I have tried using myDestiny, Smart Bro, Bayantel and PLDT. The hardest part of switching ISPs is that I had to wait for my lock in period to expire before I could go find another one.
Not thinking clearly right now because of my colds, so feel free to ignore if I say something ridiculous. *grins*
Maybe the reason why there isn’t so much competition is due to the fact that the user base is not that dense. While it is true that we are seeing millions of subscribers in the GMA, those numbers still won’t give justice to the costs of putting up another ISP.
There just isn’t enough to compete on.
I think that happiest people on earth when it comes to Internet connectivity are the South Koreans.
Ouch, my head hurts.
P.S.
And yeah, I lose Internet connection at night too
Weird. Using Globe Wimax here in Lipa City.
Nice article, thanks for this and links to the others. Just some thoughts.
1. We have to remember that our country is probably as big as 1 province in Canada. To have 100 ISPs in the country would be fabulous but realistically, what’s each company’s ROI going to be what with infrastructure, marketing and manpower expenses? I’m guessing at least 75 years?
2. Canada (and the US) have an undeniably remarkable return policy. Buy from a computer store and after 2 weeks you can just say, hey this thing isn’t working for me, and that’s it, you can return it and get a full refund. But that’s because they’ve had that policy forever. I agree though, it would be great if we could do without pre-termination fees. Sun Broadband’s no contract post-paid plan was a good idea, too.
3. if i remember correctly, Wi-tribe’s minimum lock-in is 6 months, not 2 years.
Thanks again!
No, no. It’s the population, not geography, that counts in business. Canada has about 35 M people; we’re at 90+M already. We’re more than twice as big, but probably 10x as with less purchasing power than the maple people.
I totally agree. The consumer’s interest should be at the forefront of any ISPs business plan. We should be at the core of their business because without us, pupulutin lang sila sa bangketa.
However, as responsible consumers, we should also look at the other side of the coin. ISPs also take other factors into consideration before rolling out their businesses. I have a business of my own so I do believe I know a thing or two. In running a business you have to factor the most basic variables. For example, the culture when it comes to payment. Even if we know that we have an obligation to pay for something, we won’t do the necessary action until we are given our cue. Classic example, if the bills don’t come, we won’t pay then we blame our credit card companies, our cable providers and of course our ISPs for that. Financial capacity is another thing. I skimmed through the Shaw link and if you think about it, their terms and conditions style is based on a very sophisticated financial system where the penalty rates are way beyond what the Filipino consumer can afford. In any business, it is inevitable to look at your own profitability in order to give your consumers quality service. Sorry if I sound like a capitalist here but we have to deal will business realities.
just my two cents.
It’s really going to be difficult comparing Philippine ISPs to a 1st world country’s like Canada. To be able to provide the same level of service, you have to be enjoying the same level of government and economy. In Canada, we have a credit scoring system that protects the business sectors such as auto, credit, and utilities from being screwed by consumers. It’s possible that the pre-termination fees are their protection as well from clients who decide not to pay thinking that there are no penalties or credit scores to hold them back, simply move to the next service provider, rinse and repeat.
Alternatively, pre-paid is available for mobile, landline, internet and other services if people didn’t want to be locked-in a service or be billed monthly.
Thanks!
Thank you for this opportunity in allowing us to clarify some points that you have tackled in this post.
wi-tribe built its business processes based on the results of an extensive market research. Rest assured though that we will further look into the points raised to better our service and go beyond the technology we possess.
At the base of our operations are the processes, built with the subscribers in mind. Auto-renewal makes it hassle-free for those who want to continue the service after their subscription period which can be as short as 6 months. For subscribers who want to opt-out, there is a 30-day grace period.
wi-tribe also makes it easier for the local consumers to own a modem for internet connection. Each unit is amortized by wi-tribe, ergo the pre-termination fee if the lock-up is not completed. This is indicated in the terms of conditions that each subscriber signs as part of their application.
Over the past months, wi-tribe has initiated several efforts to connect with our subscribers. We have made ourselves accessible 24×7 over multi-media channels — the 31.tribe hotline, the customercare@wi-tribe.ph email, and the witribePH accounts on Facebook and Twitter. Proactive efforts are also in place to touch base with our customers instead of waiting for them to come to us. We are also expanding our customer care shops to cater to the growing needs of our subscribers, and to allow everyone to experience the wonders of 4G technology. Currently we have shops in key cities in Metro Manila (you may visit our website at http://www.wi-tribe.ph for the shop locations).
While we have all these in place, we understand that there’s still a lot to be done. Join us and partner with us so we can make wi-tribe the internet of choice.
Best regards,
wi-tribe
the ISPs are fooling us. smart and pldt are one, globe and sun are one, our choices are limited, really.
Carlo (we did work together for some time at netGames) =D. Broadband here in the UK is far from what we have there in the Philippines. We pay GBP 10.00 a month for an unlimited service at 10mb speed, downloading is a breeze, and best part is no intermittent internet connection something I had to suffer with PLDT for 3 months back then.
The competition for broadband here is not even that steep, there aren’t many players: O2, Orange, Three, Virgin, PostOffice, BT plus probably a few more but the relatively low number of players did not result to intentional inefficiency.
Perhaps we need a body like ConsumerDirect or TradingStandards similar to what they’ve got here so that companies will stop giving us the bull
To give you a brief look into the ISP situation in the Philippines, there are only three lines with uplinks continuously transmitting overseas, two in Batangas, one in Cavite. All three are owned by e-PLDT or its subsidiaries. Globe leases bandwidth from PLDT. Smart leases bandwidth from PLDT. BayanTel leases bandwidth from PLDT. Sky leases bandwidth from PLDT. Everyone wanting internet connection leases bandwidth from PLDT (A glaring exception is Wi-Tribe, which is powered by Qatar Telco, who is aiming to be a major player in the ASIAN market by 2015. *Correct me if I am wrong*)
Imagine a monopoly on all lines. Imagine same set of rules. Imagine being the only internet provider in a country hungry for the internet. Monopolization just means big time consumer killing, *Oh we own the lines, they’ve no choice. Hey you lessees, follow the same sets of rules, we lay them down, you follow, minor adjustments so that we won’t look like the only ISP, and we won’t be accused of monopoly. Rules will be simple, but still it would benefit us in the long run yo.*
FYI Philippines has one of the most expensive rates for internet access in the world. As long as no other company has a minimum of 500m USD to invest for a cable system with landing points connected to at least Changi, Lantau, Toucheng, Pusan, Miyazaki, and of course Batangas, we better man up, suck it up, and live with it.
I too have gone through the same headaches…. Even became worst when i moved to laguna… Aside from the usual PLDT and Smart bro there is this Intelco.. I was hey they are a small player maybe they can give personalized service… Oh boy was I wrong… Application process alone I wanted to scream at someone…. So I can imagine after sales services…
But going back to the issue about ISPs… Actually the main problem falls on the hands of the NTC… PLDT and Globe may seem like competitors… but when a new player comes in, see how fast they will push their puppets in NTC to give em hell…
My latest encounter getting my connection fixed. Called on Aug 10th 2010 reported no dsl signal, the call center employee apologized and told me their tech’s would fix the problem as soon as possible.
Called Wed morning asked them when their tech’s were gonna start working on my connection, The call center employee said a tech would come to my house sometime on Aug 11th. Waited all day no tech showed up.
Called the tech support call center Thursday morning and told them no one came on wed, the call center employee apologized and said i would now have to wait 12 days for another on site visit which is just plain retarded.
Decided to stop wasting my time with Globeline technical support call center and went down to the local office at 1pm. Talked to a rep about the problem and he made a phone call and told me a tech would come to my house. A repair team showed up about 4pm, The tech informed me that they didn’t have a key to check the box so they would pass it on for someone to check the box on Friday.
Woke up Friday morning and my connection working but download speed is only 30% or what it is supposed to be.
To recap
Tues – no attempt to fix my connection
Wed – no attempt to fix my connection and a no show on the on-site visit.
Thurday – Repair crew shows up at 4pm not prepared or equipped to fix a internet connection.
Friday – A crippled connection (30% of the rated download speed) restored at around 9am .
Saturday – Called about my download speed and informed of a area wide network problem. Told i would have to wait till they solved the network problem before anyone would be available to fix my connection.
Monday – connection restored
I should not have to call numerous times to coordinate the repair efforts on my connection, I should not have to make a on-site visit to the local Globelines office in order to get my connection repaired.
I should not have to deal with incompetent call center employee’s who apparently think waiting 12 more days for another on-site visit after the Globelines tech’s failed to show up or that waiting a total of 16 days before someone starts working on the problem is acceptable.
Thanks guys for all the informative comments! I learned a lot of stuff, especially from SaveTheQueen’s input.
Hello to all of you? First all one of the basic reason in internet disconnection or slow connection is that of many user’s in the Philippines.I tried to research what is the best ISP provider. All ISP providers claimed that they are all the best.However the truth is they all have the same technical problems.
It all comes down to the provider regulations, not to the number of them. In France there remains only three major providers of DSL (Orange, SFR and Free – the rest is just virtual operators) since a free market at the start of the internet industry had caused numerous ISP merges. But the telco industry is government-controlled – who would let operators sell bandwidth that doesn’t exist ? That’s why internet access in the Philippines is just a bunch of lies (and for christ’s sake, wireless access IS NOT broadband !!). ISP can market announced 2Mbps speeds that will only give a 128 kbps rate to the end-user. And how more about PLDT plans system !! Literally sell bandwidth that doesn’t exist. You will pay on a promised capacity that doesn’t exist, as your blog posts explain it well if you’re not getting the full 1Mbps on the 1Mbps plan, there’s no way you are getting 2Mbps on the 2Mbps plan, but you are going to pay double for the same shitty connection !
the root of this problem is the unavailability of foreign companies to participate in the ISP competition. There is a Bill in the Philippines that states ALL COMPANIES CAN ONLY OWN 60% of the philippines stationed Philippines.. For me this law should be banished. To know more about what im saying, watch http://www.youtube.com/watch?v=9fRcKr8bfBQ&
I really agree with Cito. I have a SMART BRO and I can not terminate it because I signed a contract for 2 years. You are tied up to a subscription that has inefficient service. If you insists to terminate it, they charge you with the number of months that you have not finish. So, you are pressured to continue the service. It’s really unfair practice. Those sucking, vulture ISP provider, all they want is more profits! They don’t care if you suffer or not. NTC is a lame duck that is dictated by the big players in the telecom industry. They can not decide on their own. it’s about time that other foreign telecom companies to invest and compete in the industry.