The Philippines is planning free Wi-Fi services to half of its towns and cities this year and nationwide coverage by end-2016, limiting the data revenue prospects for Philippine Long Distance Telephone Co. and Globe Telecom Inc.
The free Internet service will cost the government about 1.5 billion pesos ($32 million) a year and will be available in areas such as public schools, hospitals, airports and parks, said Monchito Ibrahim, deputy executive director of the Information and Communications Technology Office.
“If subscribers move to using free public Wi-Fi, telecoms may need to lure them into getting higher-end services,” Ibrahim said in a Sept. 4 interview in Makati City, referring to the country’s two main phone companies. The government’s “focus is on areas that absolutely don’t have access.”
The new service is expected to push data charges lower in the Philippines. Access to the Internet costs about $18 a megabit per second in the country, more than three times the global average of $5, according to research firm International Data Corp. or IDC.
For the country’s two biggest phone companies, that means more expenses to boost their network for services offering higher speeds.