Telstra could revolutionize streaming in the Philippines

When it comes to internet speed in the Philippines, it feels like the 90’s. While customer rants continue to flood Smart and Globe’s Facebook pages, the two incumbent mobile carriers fight neck-and-neck in nabbing partnerships with foreign content providers ranging from messaging apps to music streaming and video-on-demand platforms, to battle for market supremacy.

While the Philippines’ rank as the second slowest in Asia in terms of internet download speeds at an average of 3.64 mbps in a survey by internet metrics provider Ookla, Filipinos experience deeper problems than spotty connection, and both telco players have done little to address basic internet connection problems.

Forget not being able to share posts on Facebook, but consumers have been paying more for less than what is advertised in the past four years to major telecom operators Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom Inc. Compared to the worldwide average cost of US$5.21 per mbps, Filipinos pay an average of $18.19 per mbps.

It is without a doubt that the joint venture between Australia’s largest telecommunications provider Telstra Ltd. and local retail giant San Miguel Corp. has Smart and Globe’s knees shaking, in what could be the end of a long-standing telco war between the two players. The war has often put customers in the middle of crossfire, with dirty black ops campaign marring product announcements instead of building a better customer experience.

Telstra has completed its acquisition of Pacnet, Southeast Asia’s backbone Internet Exchange (IX) provider, thereby gaining control of the 28,000-mile undersea cables connecting Asia and the Pacific. The strategic investment positions Telstra to gain the upper hand in offering better data and broadband services to Filipinos, whereas ISP providers in the Philippines connect with PLDT’s private backbone. Filipinos may soon get a taste of unlimited music streaming and high-definition video streaming services without interruption.

The news has then prompted PLDT and Globe to launch 1-Gigabit broadband plans ahead of the third player launch.

If Telstra plays by the Filipino market rules right, the move could finally end the duopoly and consumer paralysis. While mobile internet penetration is high at 115 percent, the market’s appetite for $100 and below smartphones could potentially hamper Telstra’s plans to leverage the country’s weak 4G internet services, as only high-end smartphones are capable of operating in 4G networks.

But as Telstra is willing to dive in the Philippines as the underdog, setting up 3G equipment might just do the trick in getting a considerable bite of the market share.