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Enhancing Digital Connectivity in Remote Areas in Mindanao

Date Published
March 12, 2024

BIMP-EAGA aims to spur development in remote and less developed areas, with internet connectivity among the pillars identified to achieve this goal. Photo credit: ADB

Remote areas in Mindanao are expected to get better internet access under a nationwide private sector-led project, entailing the construction, development, and operation of 800 shared telecommunication towers to be financed through a 2.4-billion Philippine peso ($42.94 million) loan from the Asian Development Bank (ADB).

ADB has already signed a deal with telecom tower developer and operator iSON Tower Limited Inc. for the loan.

"Expanding and enhancing telecommunications infrastructure is vital to bridge the digital divide, empower communities, and foster economic growth and development in the Philippines,” said ADB Director General for Private Sector Operations Suzanne Gaboury in a news release. “Shared infrastructure services, like those provided by iSON Tower, will give underserved communities better access to communication, as well as to work in the digital economy, e-health services, access online education, e-government services, and to prepare for disasters.”

In 2020, 80% of the population were covered by mobile network. However, a national survey conducted in 2019 found that only 17.7% of households had internet access at home, and regions in Mindanao and Visayas had lower internet access access compared with those in Luzon and the National Capital Region.

Remote areas in Mindanao, which is part of BIMP-EAGA, are some of the the poorest in the country. BIMP-EAGA aims to spur development in remote and less developed areas, with internet connectivity among the pillars identified to achieve this goal.

Internet connectivity plays a key role in achieving the Sustainable Development Goals (SDGs) by equalizing access to the digital economy, especially in areas such as education, healthcare, financing and payments, and mobility. While global averages show that a 10% increase in the mobile broadband adoption ratio results in a 0.8% increase in gross domestic product, the positive impacts of mobile penetration on economic growth are even more pronounced in lower-income and developing economies.

The ADB loan is part of a broader Php4.8 billion cofinancing package, with ADB and Security Bank Corporation each providing Php2.4 billion toward the financing package on a 12-year tenor. The project financing is structured to mitigate risks related to greenfield financing of telecommunications towers in the Philippines. The country’s two dominant telecommunication service providers, Globe Telecom, Inc. and Smart Communications, Inc., both have master lease agreements signed with iSON who leases the land, builds the infrastructure, and handles the management, security, and maintenance of these towers.

"Ensuring reliable, quality connectivity is paramount to meeting the constantly evolving digital needs in the Philippines. As part of our dedication to bolstering telecom infrastructure across the Philippines, iSON has made significant investments since 2021,” iSON Tower Founder and Chairman Vivek Gupta said. “And with the partnership of ADB and Security Bank Corporation, iSON is committed to strengthen the country’s telecom infrastructure landscape for 5G and beyond."

Smartphone usage in the Philippines is among the most widespread in Southeast Asia, but the country has limited tower coverage—with only 240 towers per million population. In 2019, the Department of Information and Communications Technology (DICT) accelerated the rollout of shared telecom towers by allowing infrastructure companies to build and manage these towers on behalf of mobile network operators. The shared infrastructure will reduce the mobile network operators’ operational costs, allowing them to focus on providing better services to consumers.

iSON Tower is one of the independent tower companies licensed by the DICT to build and manage telecom towers. It is a part of the iSON Group, a leading information and communication technology company and an emerging market specialist, with a presence in over 30 countries across Asia, Africa, and the Middle East. iSON Tower is focused on providing nationwide digital shared infrastructure with a comprehensive portfolio of built-to-suit macro towers, new-gen camouflaged solutions, solar solutions, and small cells, among others.

The Philippine government had rolled out programs in the past to improve internet access in remote communities in Mindanao. In 2021, the DICT provided free Wi-Fi sites that relied on satellite technology in Sulu and Tawi-Tawi in the Bangsamoro Autonomous Region in Muslim Mindanao. The Wi-Fi hotspots were activated in Parang District Hospital and Mindanao State University in Sulu and in Bongao Municipal Town Hall, Tawi-Tawi Provincial Capitol, and Mindanao State University (Tawi-Tawi College of Technology and Oceanography) in Tawi-Tawi.

In the same year, the Ateneo de Davao University also rolled out a project to pilot satellite internet in remote areas in Mindanao to demonstrate that the technology could provide a quick solution to the connectivity problem in Southern Philippines. The project was piloted in Davao Oriental, Davao de Oro, Bukidnon, Cotabato, South Cotabato, Maguindanao, Basilan, Tawi-Tawi, and Dinagat Island. The program showcased how space technology could connect remote and isolated areas within half a day or a day at the most.