, March 4, 2005 (STAR) By Alma Buelva  -  (Third of four parts) The Philippines is the oldest republic in Asia Ė 107 years old this June. Despite playing the part of victim during its colonial past, the country managed to emerge in the 60s and early 70s as the second biggest economic powerhouse in the region, next to Japan.

Back then, the Philippines was ahead of its neighbors, especially South Korea, which was still reeling from the Korean War. But three decades later, the tables have been turned: the Philippines now lags behind South Korea, which today is among the regionís strongest economies and a global IT superpower.

In June last year, ASIAcom cited South Korea as Asia-Pacificís leading digital nation with a 35.7 percent digital penetration ranking (DPR). Japan came second with a 25.8 percent DPR, which was still higher than the regional average of 11.2 percent. The Philippines only managed to scrape together a 0.7 percent DPR that earned it a spot near the bottom, at 11th of 13 countries surveyed (See table).

Weighing heavily on a countryís DPR rating is its broadband penetration index.

Broadband describes a communication channel capable of supporting a wide range of frequencies, typically including audio and video frequencies. A broadband channel can carry multiple signals by dividing the total capacity into multiple, independent bandwidth channels, where each channel operates only on a specific range of frequencies.

The term "broadband" has come to be used for any kind of Internet connection with a download speed of more than 56 kbaud. A Digital Subscriber Line (DSL) is a kind of broad-band service, as is cable Inter-net.

South Korea, with its impressive broadband penetration of 23.3 percent vis-a-vis its population, is ahead of Hong Kong and China (both at 18 percent), Taiwan (13.4 percent), Japan (11.7 percent) and Singapore (10.1 percent) in terms of broadband adoption, data from the ITU Asia-Pacific Telecommunications Indicators 2004 report show.

ASIAcom quoted an even higher broadband index of 70.2 percent in South Korea, which clearly backs the view of, an industry statistics provider, that South Korea is a world leader in broadband penetration, along with the United States, Denmark, the Netherlands, China and Japan. The Next Mile Clearly, mere access to a computer and the Internet is no longer enough if Filipinos want to fare better in the global IT race. The new challenge is raising the quality of technologies at their disposal so they can go the extra mile.

Since its introduction in the Philippines in late 2000, DSL has chalked up a limited subscriber base. Data from the National Telecommunications Commission (NTC) show that DSL subscribers in the country reached only 21,165 at the end of 2003. More recent industry quotes, however, peg the local broadband penetration at more than 50,000 subscribers for both DSL and cable services.

The Philippine Long Distance Telephone Co. (PLDT), the dominant carrier, reported at the end of 2004 that its DSL subscribers had climbed to almost 50,000 from less than 25,000 a year ago.

Starting its broadband offerings only last year, Innove Communications Inc., the wireline subsidiary of Globe Telecom, started with about 1,500 subscribers but has an ambitious plan to push that up to 150,000 in five years.

Achieving a critical mass of customers for broadband services may not be too farfetched. If the cost of international bandwidth continues to drop by 40 percent per year and personal computers become steadily affordable, more people would want to move to a higher grade of service.

Such are the ingredients that would spark a "broadband revolution in the country," says Gil Genio, CEO of Innove Communications. "Only an upheaval of this kind can transform the Filipino educational system and enable the country to catch up with global competition in a level-playing field."

At present, telecommunications companies are aggressively marketing their DSL services to boost their landline revenues, which pale in comparison to those from their cellular mobile services. The latest industry estimates put the countryís cellular mobile telephone service (CMTS) subscribers at 28 million, a world apart from only 3.3 million fixed line subscriptions in 2003. Infrastructure Build-Up In the 1970s and 1980s, the Philippines strove to be a "newly industrialized country." In the 1990s, amid an IT boom, it wanted to be an e-services hub and knowledge center. These internationally coveted labels, however, have to be earned, starting with the physical infrastructure needed to ensure wider, faster, affordable and reliable access to information and other ICT resources within the country.

Ever since the deregulation of the telecommunications industry and the ensuing explosive growth in mobile phone services, ambitious projects to further wire the country have not been wanting. Examples of these are the building of the National Digital Transmission Network of fiber optics that will run from La Union through Western Visayas all the way to Davao City in Mindanao, the Domestic Fiber Optic Network that will provide national digital coverage, and a network that will link Manila and Cebu.

Meanwhile, interconnection and universal access are also within reach now that the Philippines is connected to several high-capacity fiber optic submarine cable systems in the Asia-Pacific and Southeast Asian region with onward connection to North America, Middle East and Western Europe. Satellite systems are also available from the regional and international operators.

Reliable and high-grade communication facilities are among the key elements at IT zones, a number of which have been established in the Philippines. These ICT parks, which offer competitive financial and tax incentives for ICT businesses, serve as prime locations for software, multi-media and other content development, hardware design, prototype production and incubation, computer-based support services, research and development (R&D) services, and other back-office operations.

Local R&D in ICT, though not on the scale found in the countryís more developed neighbors, is pursued by the Advanced Science and Tech-nology Institute, an agency attached to the Department of Science and Technology. Over the last few years, the institute has focused on microelectronics design, radar techno-logy and Bluetooth wireless technology.

E-Commerce & E-Governance

For almost five years now, the E-Commerce Law has provided the enabling environment, legal and regulatory framework governing commercial as well as non-commercial transactions via the Internet. A number of industry players, however, believe it needs to be expanded to give it more teeth, especially against online fraud, piracy, hackers and virus writers.

The governmentís National Information Technology Plan for the 21st century, or IT21, meanwhile, details the overall framework for ICT development and knowledge-based industries in the Philippines. Within the IT21 framework are a number of other components: RPWeb, the Philippines Information Infrastructure (PII), the Government Information Systems Plan (GISP), and the Internet Strategy of the Philippines (ISP.COM).

RPWeb serves as the countryís intranet to achieve inter-connectivity and greater efficiencies in electronic information and data interchange among government, the academic community and industries. The PII is the overall network that integrates the electronic links of the government and private sectors.

The GISP, on the other hand, is a "handbook" for an electronic bureaucracy that will provide the public fast and easy access to government information and services, anywhere and anytime. It relies on the implementation of ISP.COM, which embodies a compre-hensive Internet strategy to develop an environment conducive to investment and growth of ICT.

Reality Check

Unfortunately, these ICT development plans are not immediate antidotes to the nagging issues that beset the countryís ICT sector. The cost of basic telecommunication services and computers is still too high for most Filipinos.

Itís true that more people have access to cellphones these days. The same, however, cannot be said for personal computers and landline connections, which are still the most practical and versatile ways of accessing the Internet.

Until this situation is resolved, none of the governmentís ICT blueprints will be enough to catapult the Philip-pines to where South Korea and other advanced countries in the region are in terms of IT usage.

Industry observers need not look very hard for the root of this problem. To borrow a phrase from former US Presi-dent Bill Clinton: "Itís the economy, stupid!"

(To be concluded)

Reported by: Sol Jose Vanzi

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