Despite the absence of public investments in enhancing broadband access and speed, the Philippines scored high among Starters category of the Global Connectivity Index (GCI), published by Huawei Technologies, which measures how 50 nations are progressing with digital transformation using information and communications technology. Starters are countries in the early stage of ICT infrastructure build-out.
The Philippines garnered a score of 33, the highest score given among countries classified as Starters, which are economies with an average GDP of US$3,000 and have GCI range of 20-34. The country advanced two notches from its previous score in 2015 at 31. According to GCI, countries classified as Starters focus on increasing ICT supply to give more people access to the digital world.
According to the GCI report, economies classified as Starters show the following characteristics: ICT investment is less than 2 percent of GDP; E-commerce is low at US$5,000 per capita per year; and about 40% of the population uses the Internet. “Starters are not fully benefiting from the digital economy and its potential to raise incomes and overall quality of life. Policy makers need to ensure ICT maturity enters the second stage, Internet Innovation, so e-commerce can create economic growth. Faster broadband expansion is necessary to increase supply scores so that most businesses and citizens have affordable broadband access,” the report said.
To enter the next category called Adopters, Starters should adopt several strategies that include increase in ICT investment as a percentage of GDP to accelerate nationwide broadband coverage; reduce tariffs and provide subsidies for smartphones to get more smart devices into homes; start planning for high-speed broadband with 4G and fiber-to-the-home rollout.
Globe has been at the forefront of providing the digital lifestyle for Filipinos. The company persistently called on the government to help develop broadband access by investing in internet infrastructure in rural and far-flung areas. Globe President & CEO Ernest Cu has emphasized that broadband development is particularly relevant in communities where even basic infrastructure services such as roads and bridges are lacking, pointing out that broadband access creates significant impact on the development of marginal areas as this allows the community to conduct business with people all over the world, get information on education, health and government services. According to Cu, mobile operators like Globe are unable to deploy infrastructure in rural areas due to business viability issues. He said the government should build infrastructure, such as submarine cables, and then rent these facilities out to telco operators instead.
He stressed the entire country would not be able to optimize the benefits of broadband connectivity unless the government is willing to invest in developing internet infrastructure in “missionary routes”. Globe itself launched early this year a nationwide infrastructure program that would enhance the country’s internet experience within homes and across businesses.
The company has already invested $2.2 billion since 2011 to build a modern network and IT infrastructure. For 2016, bulk of its $750 million capital expenditure will be devoted in expanding network capacities with the additional frequencies that it gained access to from the sellout of San Miguel’s telco assets. The company is also aggressively investing in the deployment of a nationwide fiber optic cable system.
In the GCI report, Adopters are rated higher. These are economies with average GDP of US$15,000 and with GCI score ranging between35-55. Countries in this group see the biggest GDP growth from GCI. Their focus is on increasing ICT demand to facilitate industry digitization and high-quality economic growth. Asian countries under the Adopters category include China and Malaysia both with a GCI score of 44 and Thailand with 37.
Meanwhile, Frontrunners are countries with average GDP of US$50,000 and GCI score ranging from 56-85. These nations are mainly developed economies and they continually boost user experience, and use big data analytics and IoT to develop a smarter, more efficient society. United States lead the Frontrunners with a GCI score of 74, followed by Singapore with a GCI score 72 and Sweden at 70.
To improve their GCI scores, all governments should lead by example in digital transformation for enterprises and citizens, and increase spending on ICT infrastructure to benefit the public. Also, countries need to introduce and train a skilled ICT workforce to unleash the full potential of a digital economy and should partner with more stakeholders to lay a solid digital foundation, encourage cross-domain cooperation, and collaborate with the private sector and financial institutions like the World Bank to create an ecosystem for digital transformation. “Starters need to worry about broadening access. Adopters need to raise the quality of that access, and Frontrunners need to increase the business value created by access,” the report said.
According to the GCI report, the global digital economy has emerged as an unstoppable giant that’s growing at 10% or more than triple the rate of overall global economic growth. The worldwide digital economy generated US$24 trillion in e-commerce in 2015 and accounted for 30 percent of all global transactions. Such transactions were on 2.5 billion smart devices spread among the world’s 7.4 billion people.