The Philippine Information and Communication Technology Sector: Evolving Structure and Emerging Policy Issues

Author: 
Winston Conrad B. Padojinog
Description: 
DISCUSSION PAPER SERIES NO. 2005-29
JEL codes: 
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Abstract: 
Narrowing the digital divide is an important goal of any ICT policy. It must promote on one hand a high degree of accessibility to the infostructure by promoting competition, interconnection and convergence in the ICT sector. On the other hand, policies must also seek to increase the capabilities of the users to absorb or increase their usage of ICT. In response to the competitive forces and market preferences, telecommunication companies, in order to reduce costs and increase margins, have adopted the twin strategies of achieving scale and scope. The pressure to forward integrate, coupled with the availability of the technology, actually resulted in the convergence of IT and content in the Internet. If unchecked by the regulator, these integration strategies of telecommunication companies will bring back the ICT into the hands of a few or into a monopoly structure. The current regulatory environment does not allow firms to pursue their convergence strategies because of the limitations imposed by Philippine laws. Also, there is no general framework or policy guidelines that would help both the regulator and the industry players in addressing future issues on spectrum usage, management and ownership. There is also the need to address the issue of users ability to absorb the technology. Current ICT diffusion in critical sectors like education is very low. Demand-side constraints to ICT absorption will have to be addressed.