IT and the RP: The Road to Freedom

1. IT and the RP: The Road to Freedom Michael Ngo Dee

2. Philippine Internet Usage projections… 10 years ago.

3. The Philippines is a natural duopoly Retail (FMCG): SM Hypermarket vs Puregold Telco: PLDT vs Globe Telecoms Media: ABS vs GMA Food Conglomerates: SMC vs Asia Brewery Finance: BDO vs BPI (Metrobank, RCBC) FMCG: P&G vs Unilever

4. ISP (95-2003) • March ‘95, Republic Act 7925: Telecom De-regulation • Environment: No VCs, No Angels, Investment Banking + Loans • 1997: 85,000 internet users (100M/month market) • ISPs: Skyinet, Try-isys, Netasia, Far Eastern, Mozcom, Pacific, Evcom, Tridel... Over 100 providers to chose from! Abundant Internet Cafes • Innovation: Prepaid Cards, Unlimited Internet • Economies of scale = Metro Pacific buys PLDT • Competition = ISP buyouts, ABS buys Skyinternet, PLDT acquires Airborne Access, Government Corruption, Hackers • Consolidation: PLDT 999 • Winners: PLDT and Globe

5. Call Centers (2001-2004) • 1997: T1 and E1 connections became available in the US: Global communications became cheaper • Death of the pager and email data processing • Outsourcing destinations: India and Philippines (other destinations: Guam, Singapore, Hong Kong) • First Investors braved the US market (sales + business development): Ambergris Solutions, E-Telecare, Teleperformance, Sykes • Earnings: 6M/month for 100 seats +/- = 60M/ month/1,000 seats • Innovation: Outbound Sales, Inbound Services, Telemarketing, Employee Retention • Economies of Scale: Talent acquisition (sound management, infrastructure and capitalization) • Competition: Off shore firms from the US started coming to the Ph. • Consolidation: Telus buys Ambergris, Aegis buys People Support (2009), IBM, HP arrives • Winners: Investors, Team Philippines

6. Mobile Value Added Services (2000-2007): The Rise • 2000: The SMS explosion • 2001: 100,000 SMS per day… by 2002: 2M SMS per day • SMART and Globe introduce the 2.50 special SMS and allowed VAS providers to earn 30% margin • VAS providers: Information Gateway, Chikka, Entertainment Gateway, Megamobile, Xurpass… again over 150 to chose from! • Innovation: Licensing + Rights Management, Autoload, Pasaload, Loan a load, SMS-Web-SMS, Short Codes, j2me apps, app download • The development of the first Ph VCs: International Expansion

7. Mobile Value Added Services (2001-2007): The Decline • Market Size: 15-20 php per download. 1 ordinary song = 30,000 downloads, hit song: 300,000 downloads, 10 songs + 1 hit = 9,000,000 per day. • Regulation and Consolidation: NTC-Memorandum Circular (MC) 04-07-2009 • PLDT acquires Chikka: $20M, PLDT acquires Wolfpack: undisclosed +/- $1M~$1.5M Globe acquires EG: $20M • Iphone: The mobile platform • Winners: PLDT and Globe

8. BPOs (2007-Present) • Team Philippines: Excellent English Communication Skills, well-educated market, low cost labor vs US • Direct Corporate Hires: Finance and IT (JP Morgan, Citibank, Thompson Reuters, Dell, HP, Oracle, Netsuite, IBM) • Outsourced Hires: Architectural, Medical and Legal • Outsourced Development: (Proudcloud, Orange and Bronze, Stratpoint, Dynamic Objx, etc.)

9. E-Commerce (2000-Present) • Thousands of e-commerce sites: • P2P: Sulit.com, Ayosdito.com, multiply.com • B2B: Bayantrade • B2C: Zalora, Lazada, Rocket Internet (2012), myayala.com • Jobs: Jobstreet.com, JobsDB.com • Hotel Rentals: Agoda.com • Food: Citydelivery, Quickdelivery • Group Buying: Groupon (Beeconomic), Ensogo, Cashcashpinoy, Deal Grocer, Deal Dozen… over 50 to chose from!

10. 2010-Future • Cloud Computing: Access Anywhere • IPV6: Easier Networking • HTML5: Easier Development/Design • Mobile Devices: Access Point • Social Media (social graph): Internet Identity