The Manila Times

Digital infra challenges tagged

DIGITAL infrastruc­ture efforts in the Philippine­s are catching up with regional peers and could boost foreign investment in the country’s informatio­n and technology sector, a Fitch Group unit said, but significan­t challenges remain.

“We continue to highlight the upsides provided by strategic government initiative­s to boost last-mile rollouts of fiber-optic infrastruc­ture, and we consequent­ly expect the Philippine­s Digital Infrastruc­ture Project (PDIP) to catalyze further foreign investment in the Philippine­s’ wider ICT (informatio­n and communicat­ion technology) ecosystem,” BMI Country Risk & Industry Research said in a report on Wednesday.

It noted, however, that achieving widespread adoption of fiber broadband in Filipino households remained highly difficult and that the PDIP would offer limited benefits to its outlook.

BMI forecast that there would be slightly more than 1.83 million fiber to the x (FTTx) subscripti­ons — referring to all types of fiber infrastruc­ture — by 2033, equating to a penetratio­n rate of 1.4 subscripti­ons per 100 people.

This would be higher than the 2024 forecast of 1.58 million subscriber­s, the Fitch unit said, but added that penetratio­n would remain relatively stable at 1.3 subscripti­ons per 100.

“We believe that obstacles to consistent and widespread fiber uptake remain the prices of packages in last-mile areas, particular­ly stemming from the elevated costs of rollout that are further increased by the Philippine­s’ archipelag­ic configurat­ion,” it said.

BMI stressed that the success of the PDIP in increasing fiber adoption among Filipino households would depend significan­tly on effective execution and project management.

By significan­tly investing in lastmile infrastruc­ture, wholesale network providers could be motivated to lower prices for fiber bundles, potentiall­y impacting average revenue per user (ARPU) figures.

With a P16.1 billion budget funded by World Bank assistance, the National Economic and Developmen­t Authority Board has said that the PDIP would improve the country’s broadband connectivi­ty.

This initiative aims to bring high-speed internet to underserve­d areas, boost digital infrastruc­ture, bridge the digital divide, encourage private sector investment­s, and enhance cybersecur­ity and critical informatio­n infrastruc­ture protection.

BMI noted that while these strategies might attract new, mostly temporary fiber customers due to

the flexibilit­y of low-cost contracts, high customer turnover could significan­tly impact ARPU levels and overall revenues.

“Renewed government efforts to fiberize the Philippine­s’ last-mile areas will be beneficial for the players with a large risk-seeking stance,” it added.

“Regardless, wider digital transforma­tion ambitions and the attractive­ness of the Philippine­s’ ICT market are set to benefit from a stronger nationwide backbone and last-mile network density.”