THE UPCOMING BATTLE

Apart from Internet access, Mr. Contreras said the next battle in data communications is providing clients robust Internet infrastructure.

This means making sure that the various elements involved in Internet service are working properly. These elements include the authentication system, the mail system, and the Web system.

In this regard, Mr. Contreras said ISPs can do better than the telcos because most of the time, they use information systems developed in-house based on the historical usage of their clients, as opposed to the telcos that tend to buy proprietary solutions.

Even traditional Internet value-added services such as Web site design and development had to evolve. Five-year-old Internet solutions provider Web Philippines, Inc., for instance, is pushing the company's new Internet consulting services to expand its business in the Philippines and in other countries as well in view of the challenging economic times.

Although the demand for Web site design and development remains, Web Philippines president Roger Chua said the company is constantly evaluating its service offerings in order to keep up with the demands of its clients and exploring other opportunities to remain viable. Among the new services that the company is aggressively pushing now are brand management, website assessment, and e-business planning.

CHALLENGES AND ALTERNATIVES

True, Internet penetration in the Philippines remains low, but this is something which can be both positive and negative for Internet players.

At the recent Internet summit in Bangkok, Michael Minges of ITU presented the growing digital divide in Southeast Asia. Citing ITU figures in 2000, Mr. Minges said only two percent of the total population of the Philippines was connected to the Internet. The country trails far behind Singapore with 24.9% Internet penetration; Malaysia with 15.8%; and Thailand, 3.8%. The Philippines fared better than Indonesia with only 0.9% Internet penetration; Vietnam, 0.3%; Laos and Cambodia, both 0.1%.

Mr. Minges noted that it is difficult to have an accurate number of Internet subscribers and users in Southeast Asia since only Singapore conducts regular surveys on Internet penetration. He said other countries such as the Philippines and Thailand do not compile records. Other countries base their estimates on the number of Internet subscribers.

Worldwide, ITU said in another report that there are some 315 million Internet users, meaning five percent of the world population already online.

But it observed that that the growth rate in the number of Internet users declined to its lowest level ever (35%) in 2000.

"This is partly due to the downturn in the Internet economy, reflected by the sharp fall in dot-com stock prices. It also suggests approaching saturation. In many developed markets, those who want to be online already are. In developing markets, affordability, awareness and relevance are placing limits on Internet growth," the ITU report said.

However, ISPs can look at the low Internet penetration in the country as well as internationally both positively and negatively. Mr. Contreras said this means that there is still a very large user base the industry can tap.

The urban areas maybe saturated already but local ISPs can expand globally, added Mr. Torres of MosCom. He noted that there are niche services that are not yet being fully addressed such as government and education. Mr. Torres also stressed the need for the Philippines to be active in content provisioning.

"We need to have content services in the country to lower cost of access. Hopefully, we can have content services that will be accessed by other countries to balance the flow of information. Now there's more outflow than inflow (of information access)," Mr. Torres said.

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