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Connectivity still a challenge to MSME growth: Experts

Connectivity has remained the biggest challenge for not just the micro, small and medium enterprises (MSMEs) but the entire business sector in trying to maximize the potentials through the use of technology, sector officials said.

However, the problem lies not only with the telecommunications companies, but also with some local government units (LGUs) whose policies have not really conformed with what the sector needs.

John Carlo B. Tria, president of the Davao City Chamber of Commerce and Industry, said the business sector must adopt the use of technology because this is among the main factors that will determine the profitability of a business as seen from the impact of the coronavirus disease 2019 (Covid-19) where some small businesses have enhanced their presence online so they could continue operations.

In a message to TIMES, Tria said MSMEs, whose budget does not include funds for innovation, must tap technology and review their business models if they want to become sustainable.

However, he hastened to add, for these businesses to be able to maximize their potentials in using technology, particularly digitalization, connectivity must be improved. “The challenge is Internet connectivity,” he said.

Even banks, which need stable connectivity infrastructure, also took note of the faltering connectivity as the main reason why countryside clients are not so keen on using technology, not only because this is something new to them, but also because they are not confident in the infrastructure.

Although he did not provide any number, Noel A. Santiago, chief digital officer of the Bank of Philippine Islands, said in his electronic mall to this writer that while about 90% of bank transactions have been through online platforms, the number could be higher if not for unstable connectivity especially in the rural areas like Mindanao.

The bank could only raise its hand in surrender as far as improving connectivity is concerned.
“Some things, such as establishing a national broadband infrastructure, are out of our hands,” said Santiago, who expressed his optimism that the situation will eventually improve with the high penetration of mobile phones.

“But smartphones are everywhere and the reach of mobile internet is spreading to more areas,” he said.

The faltering connectivity, said Alimbzar P. Asum, Department of Information and Technology Mindanao Cluster 3 assistant cluster director, has even affected the operations of business process outsourcing (BPO) companies, the very businesses that need stable connectivity.

This is because connectivity is only stable in some areas of urban centers. “Even in the city, there are areas where the signal is weak,” he said during an online press conference this week.

But the problem of connectivity is not a sole responsibility of the telecommunications companies, said Asum.

He explained that there are some LGUs within his cluster that have not been able to come up with policies that would help the telecommunication companies.

Telecommunication companies, he said, have faced difficulties in rolling out their facilities to improve connectivity because “even in barangays, they are facing some issues like permits.”

“That is the truth (the lack of cooperation from LGUs in improving connectivity). That is one big problem that the telcos (telecommunications companies) have been facing because there are so many permits that they need to secure (so they could go on with projects),” he said.

Even homeowner associations have been blocking the putting up of cell sites in their villages on the claims that these facilities are harmful to health, or in some instances, could destroy the aesthetics of their villages, he said.

This has prompted the department to call on the LGUs and the subdivision owners to relax a bit their policies to allow the telecommunications companies to implement their projects.

He hoped the national government, particularly the Department of Interior and Local Government, will come up with an executive order to enjoin LGUs “to help the telcos in facilitating the improving the facilities of the telcos to enhance connectivity.”

Tria said the telecommunications companies have committed to improve their facilities to ensure connectivity in the region. “They (telecommunications companies) are working out some local infrastructure bottlenecks that we all hope can improve (Internet) speeds,” he added.

On improving the presence of MSMEs online, he said, his group has worked with the local information and communications technology group, the ICT Davao, to help these businesses.

The business organization added that aside from helping the small businesses, improving connectivity will also “more people to work from home,” a scheme that has become prevalent for businesses since the start of the pandemic.

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