Data Cap Policy in the Philippines Explained

Admit it: you were one of those people who flooded Facebook and Twitter with angry outbursts when the Fair Use Policy (or FUP) was announced. No surprise: Filipinos are some of the most active Internet users in the world.

Part of that outburst was justified: a fast and reliable Internet connection is not a mere want – it’s a need. The question is: did you even understand what you were ranting about? Here are some important terms you need to know:

Fair Use Policy is a regulation imposed by Smart and Globe to ensure equal distribution of service.

Data Caps or Bandwidth Capping or Broadband Capping
is the method used in FUP by the Internet Service Providers (or ISPs), cable Internet providers, network service providers, and telecoms.

is the process where the amount of data sent and received on a given channel or bandwidth is lessened.

Data capping is not inherently bad – it’s common practice in other countries. The difference is that the way it’s implemented here in the Philippines: both abusive and non-abusive users get punished. According to Globe, only 3% of the total data subscribers are heavy users. All subscribers want a faster Internet connection but, because of these abusive consumers, the overall quality suffers.

If you compare the TelCo broadband giants’ rule on FUP, Globe implemented a daily limit of 1 gigabyte (GB) per day or 3 GB per month (whichever comes first). On the other hand, Smart limited the daily and monthly usage to 1.5 GB. After hitting the limit, the subscriber can still access the web, but an only do so at a throttled 2G speed.

1GB to 1.5GB is more or less equivalent to one movie streaming, about 17 hours of YouTube viewing, and more than 2,000 Instagram posts on your feed. 2G speeds, however, only allow you to post Facebook statuses, text tweets, and text emails.

Today, Globe has 36.5 million users total, composed of 34.53 million Globe and TM prepaid subscribers and 1.98 million postpaid users. PLDT's cellular subscribers number 72.5 million, while Smart Communications has 24.7 million subscribers, and Talk N' Text has 31.9 million. Digital Telecommunications Philippines has 15.8 million Sun Cellular users. PLDT also has a combined broadband subscriber base of 3.3 million.

In Contrast to Innovation

The world of technology is expected to revolutionize and FUP may seem a hindrance to its improvement as it limits consumers’ Internet use. Worse, data capping can hamper economic progress and human development.

From the marketing and advertising perspective, tapping more people through mobile browsing is a big thing because a personal approach is what works today. But because of FUP, these efforts are largely defeated. FUP is a hindrance to technological innovation in businesses because it could mean less Youtube viewing, reduced podcast streaming, lower numbers of Facebook likes, and fewer Twitter followers. These all mean less traffic to a website and therefore less revenue in general.

If you consider the Law of Demand and Supply on a consumer level, when the demand of Internet is high, the supply should also be high for innovation. Where is innovation when the demand for Internet is high, but instead of upgrading the services and cables, the telecommunication companies and the industry just agreed to give their customers a substandard service?

FUP is completely contrary to rise of smartphone usage, smartphone apps, and other technology-related things. It makes it hard for messaging applications like FaceTime, WeChat, iMessage, Skype, Viber, LINE, and many others to grow. The effect of data cap is indisputably significant, so much so that it will soon change the way people use the Internet, and not in a good way.

As a consumer, there are a few things you can do to fight back. One is to never give up your search to get faster Internet connection: do your research among different brands and compare services to get the best. Another is a bit more tricky, but possibly more compelling: get together with other consumers like yourself and send a message to your provider as a group. There is power in numbers, and a collection of voices will be heard better than one.


Disclaimer: This contribution is exclusively written for by MoneyMax Philippines, the country’s leading financial comparison portal which helps consumers make the right financial decisions as they settle on the best credit card, housing loan, broadband plan, and more—fast, comprehensive, and free.