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RP ISPs face uphill fight for survival
By Helen A. Jimenez, Senior Reporter
Business World Online,
December 10, 2001


ISPs cannot survive now by just providing Internet access but have to expand the range of their services, said Dr. William T. Torres, president of Mosaic Communications, Inc. (MosCom). MosCom is one of the pioneer ISPs in the country and currently has about 70 Internet points of presence (PoPs) nationwide.

Mr. Torres cited the need of ISPs to "reconfigure" in the face of the mounting competition from the telcos, which he said are now "playing the game that they did not pioneer."

The Philippine Long Distance Telephone Company (PLDT), for instance, has bought Internet service provider Infocom Technologies, Inc., and has set up ePLDT as the company's Internet arm. Ayala-owned Globe Telecom has its own GlobeNet, which offers Internet connectivity to individual and corporate subscribers. The Ayala Group also entered IT business incubation through iAyala and recently launched AyalaPort, its data center business.

How are ISPs coping amid the competition intensified by the current economic malaise? What kind of survival strategies do industry players practice to maintain the viability of their business?

More than ever, Mr. Torres said ISPs have to become real "value-added service providers" as they are actually classified.

Internet connectivity is not "value-added" anymore, he said, but rather the other services that go with that connectivity that would differentiate the ISPs. Such value-added services include Web development, e-commerce solutions, e-business consulting, data center, call center services, among others.

MosCom, for example, established ModNet for its data center services. The company is also aggressively promoting its videoconferencing and video streaming services to clients who wish to use these technologies without having to invest on the expensive facilities and network resources.


Mr. Torres believes that the ISPs that would survive the tough times are those who can become big by joining other ISPs or those that those that can strategically move into new areas of business to generate more revenues.

Fernando D. Contreras, Jr., president of PISO and Inter.Net Philippines, Inc., said it is useless to feel pessimistic and paralyzed by current economic difficulties and the tough competition. Unlike the local cable industry that is also said to be "bleeding", Mr. Contreras said the Internet industry has better chances for survival and growth.

"The Internet is a business necessity," he stressed.

While ISPs may lose out on a number of consumer subscribers who would prioritize their more basic needs, Mr. Contreras said there are strong business potentials from corporate clients. He said businesses that want to save on travel and communication costs, for example, would be relying heavily on e-mail and other Internet-based communication. The crisis is driving more serious usage of the Internet in the country, Mr. Contreras said.

As for the telcos, Mr. Contreras believes ISPs are in a better position to offer clients "high-touch" services since they are smaller as well as more nimble and flexible. "I still believe we could bring in technology and service that cannot be matched by the big companies."

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