Another factor that should boost local internet speed is an all-inclusive IP peering arrangement among major internet service providers in the country. While many ISPs are interconnected to each other through Internet Exchange points such as Philippine Open Internet Exchange (PhOPENIX), Philippine Internet Exchange (PhIX), and Philippine Common Routing Exchange (PHNET CORE) — PLDT is the only remaining ISP, alongside Smart Communications, Inc., to not have an established peering setup with local carriers when PLDT declined the NTC’s request to agree to IP Peer with Globe, on the grounds that internet quality of service would suffer because the NTC memo circular did not provide for rigorous and robust arrangements for IP peering.

But not anymore as after several talks, Globe and PLDT finally just signed and sealed the IP Peering agreement!

About 20% of internet traffic is local. This means that domestic traffic originates in the Philippines and terminates in the Philippines. However, given the current peering limitations, up to 70% of this local traffic has to be routed outside the country, such as in Asia, US and Europe, before returning to PH. When traffic is routed outwards, it incurs additional IP transit costs aside from causing delay in data transmission and latency in downloading sites. In other words, user get to experience a very slow internet connection when he’s on Globe network and accessing content and applications hosted by PLDT servers, and vice versa.

That will change, however, following this development which may also encourage multinational companies to locate their websites, services, and businesses in the country. Such IP peering arrangement with Globe and PLDT will keep a substantial portion of local data traffic local which means access time is shorter and faster, thus benefits customers with better experience and reduce delays in data transmission in apps such as games.