Saturday, August 23, 2014

Of restrictions and competition

Ever wonder why telecom services in the Philippines are shitty? Look no further. Here's the only answer, straight from the horse's mouth.

The 2015 AEC does not pose a threat to the Philippine telco industry.

"The effect on telco is minimal because it is regulated. It would require licenses, and entry to this market will require partnerships," Cu said. "So we expect very little, immediate impact on us," he added.

What Mr. Ernest Cu is trying to say is that the odds of us having a new telecom company in the country is low. Because first, our economy is restricted – you can thank the 60-40 rule in our Constitution for this. If and when a foreign telecom company decides to enter the Philippines, it will have to look for a local company to partner with. And what, whom with? PLDT? Globe? Then there's our bureaucratic, red-tape-ridden government.

In other words, the lesser the competition in an industry, the lesser the chance the companies will improve because they have no 'incentives' to do so. Oh, and the telecom industry won't have much competition unless the administration amends the economic provisions in the Constitution.

So, there.

Reference: GMA News Online

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