Solons eye ₧1.2B trust fund to modernize BI operations

By Jovee Marie N. dela Cruz @joveemarie

Sss Assists

This Monday, July 7, 2023, photo shows two of 4,390 employees of Bacolod Citybased PanAsiatic Solutions Inc. provided services by the Social Security System. SSS officials and PanAsiatic Solutions executives also agreed to create an SSS e-Center within the company premises that will officially open on August 7. We set up an information and service booth to respond to their queries and assist them with their online and onsite transactions,” concurrent Acting Head of Accounts Management Group Neil F. Hernaez was quoted in a statement as saying. Photo courtesy social security system

Perspectives Future of telco

TODAY’S market conditions are creating challenges for telecommunication industry players. Even though consumer revenue has been historically high, margins are being squeezed because of the massive infrastructure investment in 5G by telecommunication companies (telcos) to meet the spike in broadband demand during the Covid pandemic and the anticipated explosion in demand driven by various 5G-use cases. Competition has been heating up from both traditional and non-traditional players. Customer expectations and the market have been shifting. A looming recession and regulatory pressures have been creating uncertainty.

To address these significant concerns, global telco players have been taking big steps to redefine their business and operating models. KPMG’s recent report identifies some of the key capabilities that KPMG professionals believe are required to succeed in the telco business models currently emerging around the world.

The telecommunications industry in the Philippines is also facing a rapidly changing landscape wherein industry leaders acknowledge the need to anticipate and adapt to market conditions to survive.

KPMG in the Philippines Technology Consulting Head Jallain Marcel S. Manrique said that “to ensure that they thrive in the future, telco industry players must adopt key strategies [that] include taking a customer-centric approach to continually understand and act upon their demands and values. Additionally, telcos should explore and embrace emerging technologies like cloud computing, machine learning and data science to improve consumer experiences and operational efficiency.”

Signals of change

WHILE change is constant in the telco business, the factors driving change are constantly shifting. In this section, we identify and drill down into some of the most significant market factors that should currently be on telco leaders’ minds.

1. Traditional business models are being challenged. Traditionally, telcos have made their money by moving bits through the air and across wires in their networks. While doing so is still central to their mission, telcos need to figure out ways to diversify and make their businesses more profitable, because continually investing in infrastructure can limit profitability. Telcos have been trying to break into higher value-added services for years, including through massive investments in areas such as professional services, media/content and digital advertising. But the track record for such investments has been decidedly mixed. Now, other options are emerging.

2. Escalating customer expectations. Expectations for both consumer and commercial customers have been intensifying. For consumers, that means wanting better and more flexible service, greater transparency in billing and enhanced ease of use. On the commercial/B2B side, clients are looking for increasingly sophisticated connectivity and data solutions without the traditional requirement to contact a call center or a sales rep.

3. Hyper-competitive hyperscaler. As the landscape evolves, there will likely be more direct competition between telcos and hyperscalers. This should be a concern to telcos given how much money these hyperscalers spend, their in-house talent and their outsized ambitions.

4. A possible global recession. Inflation and interest rates are likely to continue to rise and a recession is looming. In many markets, rising interest rates will likely raise the cost of capital, potentially impacting telcos’ borrowing capacity and access to fresh capital. For some telcos with weaker balance sheets, this could lead to a higher risk of potential financial distress.

5. Technology can create new opportunities—and threats. In our view, the most important—and costly—technology investments will continue to be network upgrades. 5G has been central to telcos’ efforts to satisfy the bandwidth needs of residential consumers, but the cost of deploying it has been prohibitive. As for 6G, it requires the same massive investment as 5G and is still estimated to be three to five years off. In addition, telcos should continue to focus on how best to use evolving tools like AI and machine learning for service and operating improvements.

6. Fulfilling the ESG agenda. In our recent CEO survey, executives responded that the economic downturn required them to turn away from their ESG initiatives, with 50 percent saying they were pausing or reconsidering their existing or planned ESG efforts over the next six months. In our view, that move could backfire. As the financial sector moves to get behind ESG, we anticipate telcos will find that more significant proportions of their corporate loans and debt vehicles are tied to ESG metrics.

7. Telcos likely can’t avoid stricter regulations indefinitely. Most carriers had to sink many millions into complying with the General Data Protection Regulation and other global privacy statutes. These policies will continue to mandate carriers to establish more robust privacy and cybersecurity controls across their networks, applications and operations than they have traditionally cared about.

This excerpt was taken from https://kpmg. com/xx/en/home/insights/2023/02/future-oftelco.html.

© 2023 KPMG Int’l Ltd. is a private English company limited by guarantee. R.G. Manabat & Co., a Philippine partnership, is a member-firm of a global organization of independent member-firms affiliated with KPMG Int’l Ltd. All rights reserved.

E-mail ph-kpmgmla@kpmg.com or visit www.home.kpmg/ph. This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity. The views and opinions expressed herein are those of the author and do not necessarily represent the BusinessMirror , KPMG International or KPMG in the Philippines.

Camarines Sur Rep. LRay F. Villafuerte said House Bill (HB) 8203 seeks to establish a P1.2-billion ITF for the modernization of the bureau’s facilities and equipment, payment of employment benefits and further professionalization of officers and employees through trainings, seminars and other career advancement programs.

In his second State of the Nation Address, President Ferdinand R. Marcos Jr. asked Congress to pass the bill on BI modernization.

This bill was unanimously passed by the House of Representatives on third and final reading by a 278-0 vote before the 19th Congress went on recess June 3 to July 23.

Villafuerte said the proposed ITF shall be administered by the BI Board of Commissioners. It would be used exclusively for the modernization of the bureau’s equipment, facilities and offices, including capital outlay for establishing new buildings and field offices and payment of employee benefits as provided by the Board and approved by the Secretary of Justice.

HB 8203 aims to modernize the BI by broadening its organizational structure, upskilling its personnel through career advancement programs, doing away with red tape by improving data gathering and analysis and boosting employee morale by way of a better, more competitive salary structure, the lawmaker said.

To attract qualified staff, the bill proposes a bump in the salary grades (by two notches) of junior immigration officers.

The employees’ additional benefits shall cover night shift differential and overtime pay for actual work rendered in accordance with existing rules and regulations.

Villafuerte said HB 8203 aims to lead the bureau into the digital age and has a two-pronged goal of tightening the country’s border security and enhancing travel experiences in and out of the country.

The lawmaker added that the 83-year-old Commonwealth Act 613, or the Philippine Immigration Act of 1940, is an antiquated law that needs to be amended in order to respond to the changing times and be true to the Constitutional mandate of serving and protecting the people.

With modernization and the increased mobility of people across the globe, he added that crimes are becoming more and more cross-border.

Villafuerte said recent years showed that many aliens in the Philippines have been involved in international crimes such as drug and human trafficking, prostitution, terrorism, illegal recruitment and even financial crimes.

The BI is attached to the Department of Justice (DOJ) and implements local laws on immigration, citizenship and alien admission and registration.

HB 8203 also mandates the establishment of border control checkpoints aside from international airports and seaports. These would be manned by BI officers appointed as border control officers by the bureau commissioner.