Information Technology in The Philippines

Impacts of National Information Technology Environments on Business

Telecommunications Infrastructure

Telephone Density

The deregulation of the country's telecommunications industry has created a large amount of investment in this sector, estimated to total PhP130 billion (US$3.25 billion) over the next three years.1 The total number of main telephone lines in the country increased from only 785,000 in 1993 to 3.353 million at the end of 1996 to 6.64 million in 1998.

  • The National Telecommunications Commission (NTC) reported a 1998 9.08 teledensity ratio (the number of installed telephones per 100 people)
  • Expansion is projected to slacken this next year as the telephone companies will (hopefully) have fulfilled their commitments in terms of telephone lines they have to put up
  • The implementation of the Service Area Scheme to make sure that all regions of the nation have access to the telecommunications network, carried out through the National Telephone Program, accelerated local exchange growth. However, it is important to note that telephone distribution still remains somewhat unevenly distributed throughout the Philippines
  • The National Capital Region, for example, had a teledensity of 28.62 in 1997 which was much higher than the 1997 national average of 8.07. In certain parts of Luzon (Region 2), the teledensity in 1997 was 0.89, below the 1992 national teledensity of 1.17.2

    Growth in Wireline Telephone Service and Telephone Density Index3
    (Population data shown in the table below was based on the National Census and Statistic's Office's medium projection of 73,130,998).

    Year Number of Main Lines Telephone Density
    1990 549,159 0.91
    1991 583,594 0.95
    1992 740, 033 1.17
    1993 784,719 1.21
    1994 1,109,652 1.67
    1995 1,409,639 2.01
    1996 3,352,842 4.66
    1997 5,775,556 8.07
    1998 6,641,480 9.08






    Telephone density per 100 people improved four times from 1.21 in 1993 to 4.66 in 1996. This number doubled again in one year, showing a teledensity of 8.07 in 1997. The percentage of all cities / municipalities served nationwide climbed from 21% in 1992 to 27% in 1996. By 1998, about 87% of all regions were serviced by telephones.4

    Though growth in teledensity within the country has been quite positive, compared to other other Asian countries, the Philippines' growth in telephone density appears modest and the country still has much to overcome in telecommunications development. Thailand's teledensity increased from 2.36 in 1990 to 6.4 in 1996, while Malaysia and South Korea's teledensities exhibited stronger growth at 16 in 1996 from 11.39 in 1990, and 41.5 in 1996 from 36.72 in 1990, respectively. However, the Philippines exhibited substantial teledensity growth from 1994 to 1996. The annual increase in teledensity has been 41% in 1994, 27% in 1995 and 139% in 1996.5

    Cellular and Satellite Technologies

    Satellite communications in the country has been developed in case of disasters or emergencies. Satellite technology now links Metro Manila government stations to all regions of the country. The Mabuhay Philippines Satellite Corporation launched the first Philippine satellite, the Agila II, in August 1997.6

    ITU Cellular Subscribers in the World7

    Cellular Mobile Subscribers
    1997 (k) 1998 (k) Per 100 Inhabitants 1998 As % of total telephone subscribers 1998
    Japan 38,253.9 47,285.0 37.38 42.7
    Singapore 848.6 1,094.7 34.60 38.1
    Philippines 1,301.6 1,595.0 2.19 37.1
    Malaysia 2,000.0 2,200.0 9.92 33.4
    Thailand 2,203.9 1,957.2 3.25 28.0
    China 13,233.0 23,863.0 1.90 21.4
    India 881.8 1,195.4 0.12 5.2
    Total for Asia 74,316.8 197,999.2 3.05 29.5







    1992 introduced the growth of cellular mobile telephone service (CMTS) to the Philippines with the opening of the subsector to all public carriers on a regional or national coverage. Since then, the subsector has grown by 83% in 1993, 68% in 1994, 187% in 1995 and 94% in 1996.8 By 1997, most cellular providers offered nationwide coverage. The cellular phone density in 1996 stood at 13.33 phones per 1000 people, or about 75 people per phone. By 1998, the cellular teledensity rose to 21.90 phones per 1000 people, comprising 37.1% of all telephone subscribers in the country. Of the Asia-Pacific region, the Philippines is one of the leading adopters of cellular mobile telephone services.

    However, the country has yet to make CMTS available to all provincial capitals and cities nationwide and is just now introducing the Public Mobile Telephone Service (PMTS) and Global Mobile Personal Communication by Satellite (GMPCS) services.


    Local telephone service is provided by 78 private telephone companies and 4 government units. Philippines Long Distance Telephone Company (PLDT), the largest of the local telephone service providers, accounts for 67.24% of the telephone service in the country. All the other telephone service providers combined account for 32.76%. PLDT's current Integrated Voice and Data Services include Diginet (domestic leased line), Fibernet (international leased line), DataPac (international and domestic packet switching), PhIX (Philippine Internet Exchange) and ISDN (Integrated Services Digital Network). The Voice and Messaging Services include VideoCon (video conferencing) among others.

    PLDT is also part-owner of 30 existing international fiber optic submarine cable systems. Three of which, the Guam-Philippines-Taiwan (GPT), the Brunei-Philippines-Malaysia (BMP), and the Asia Pacific Cable Network (APCN) terminate within the country itself.9 The Guam-Philippines (G-P) link, extends 3,600 km carrying data at speeds of 20 gigabits. It provide connection between the Philippines and the rest of Asia to the existing TransPacific cables landing in Guam.

    A new cable has just been installed at PLDT's station in Nasugbu, Batangas. The cable is a 40,000 km 20 gigabit Southeast Asia-Middle East-Western Europe No. 3 (SEA-ME-WE-3) cable which connects the Philippines to 32 other countries.

    PLDT also controls the Domestic Fiber Optic Network (DFON), a repeaterless cable system, that was just completed in November 1998. This network consists of 2,600 km of mini-sub fiber optic submarine cable and 2,700 km of fiber optic land cable. DFON allows uninterrupted voice, video and data transmissions even in the event of link failures. It has a transmission speed of 2.5 gigabit per second which equates to 30,720 simultaneous telephone calls.10

    As of December 1999, PLDT recently decided to build a new backbone network. Through this new network, data, voice and video integration will be achieved through Cisco's multiservice switching technology. It will enable Internet Protocol (IP) to be run over Asynchronous Transfer Mode (ATM) or Frame Relay.11 This is a huge step for PLDT, and the Philippines in general, as PLDT will now be able to provide services such as Voice over IP, IP Virtual Private Networks (IP/VPNs) and Unified Messaging over a single, integrated infrastructure.

    The Philippines Internet Exchange

    The Philippine Internet Exchange (PhIX), formally launched on July 3, 1997, was the first interconnection or network access point established in the Philippines by the Philippine Long Distance Telephone Company (PLDT). It allows local Internet Service Providers, with a primary connection to the global Internet, to access and exchange local Internet transactions without accessing the Global Internet.

    The occasional downtime of international leased line circuits was another reason to create the PhIX since this downtime would effectively disconnect local ISPs to the Global Internet, disrupting daily operations and delaying the delivery of locally terminated Internet traffic.

    The PhIX is made of an Ethernet hub where co-located routers of participating ISPs are connected to. Participating ISPs within the PhIX will all configure their own routers so that these member ISPs are including within the routing scheme. This means that local data or traffic information coming from a certain participating ISP intended for another participating ISP within the Philippines will go through their router and pass through the ethernet hub rather than through their gateway to the Global Internet. Creating a common Internet hub for the country saves users and service providers a lot of time where previously the data needed to pass through to International lines first before being delivered to a destination back in the Philippines. See the diagram below to get an idea of how the PhIX network operates.12

    This solution offers independence from international Internet conditions, centralizing local traffic within the country and eliminating the need to route locally exchanged information via other host servers abroad. Thus, routing has improved considerably both on the local and international level.

    The ISPs currently connected to the PhIX are: Infocom, IPhil, Moscom, Pacific Internet, G-Net, Tridel, Virtualink, Evoserve and WorldTel. They are all major ISPs in the country with presence in various locations. Any ISP within the country is welcome to join the PhIX as long as they have access to the Global Internet. All members sign a Multi-Lateral Peering Agreement upon joining. Some member ISPs bandwidths are lower, such as Tridel which just upgraded to a 64Kbps leased line, while other larger ISPs such as MosCom and G-Net are peering via an E1 connection.

    Further expansion of the industry

  • Private efforts to build alternative backbone networks were initiated in 1996 by existing telecommunications providers. A fiber optic backbone called the National Digital Transmission Network (NDTN), capable of transmitting about 150,000 simultaneous calls runs from La Union in the north through Western Visayas to Davao City in the south. The NDTN is made possible by the Telecom Infrastructure of the Philippines (TelicPhil), a consortium of six LECs who put up the network. TelicPhil is owned by BayanTel (65.1%), PT&T (10.5%), Digitel (8.4%), Smart (6.3%), Globe Telecom (4.6%), Express Telecom (3.9%), and ETPI (1.3%).13

  • Another backbone network which can route up to 3,780 simultaneous voice and data transmissions, applying Synchronous Digital Hierarchy (SDH), was also commissioned to link up Manila and Cebu.14

  • A fiber optic cable network named the Domestic Fiber Optic Network operates at 2.5 gigabits per second, also applying SDH technology. This will provide nationwide digital coverage.15

  • The Municipal Telephone Program implemented a program to establish public calling offices (PCOs) in municipalities across the country to provide local and long distance services nationwide. Participation from both the government and private sides enabled 906 of the 1,210 PCOs to be completed in 1996.16

    Current Domestic Telecom Players

  • PLDT (Philippines Long Distance Telephone Company)
  • Islacom
  • Globe Telecoms
  • Smartcom
  • Digitel
  • Philcom
  • Capwire and PT&T
  • Eastern Telecom (ETPI)
  • Piltel
  • Atlas Telecom
  • BayanTel

    This site was developed for
    Impacts of National Information Technology Environments on Business
    Kogod School of Business
    American University, Washington, DC.

    Created by Bree Connally

    This page was last updated: December 12, 1999