PH LIKELY TO SEE MORE FREQUENT, SEVERE CYBERATTACKS

In July 2016, a few days after the Permanent Court of Arbitration in The Hague released its ruling on the case filed by the Philippines against China regarding the West Philippine Sea, at least 68 Philippine government websites were subjected to various forms of cyberattacks, including a DDoS, or distributed denial-of-service attack—a kind of breach that floods a website with fake users, rendering it unusable.

This year, Deloitte predicts that DDoS attacks will become larger in scale, harder to mitigate, and more frequent.

The forecast is part of the Technology, Media and Telecommunications ( TMT) Predictions for 2017, an annual report that presents Deloitte’s views on key developments over the next 12 to 18 months that will likely have a significant medium- to long- term impact on companies in the TMT sector.

The predictions were released locally by Deloitte Southeast Asia member firm Navarro Amper & Co. ( NA& Co.).

The risks that come with IoT

Beginning this year, Deloitte expects that there will be on average a Tbit/ s ( terabit per second) DDoS attack per month, with an average attack size of between 1.25 and 1.5 Gbit/ s ( gigabit per second) of junk data being sent.

Now it appears hackers have found a way to combine a DDoS attack with other viruses.

The ransomware WannaCry, which affected over 200,000 systems worldwide in a span of two to three days

earlier in May, was stopped when a cybersecurity analyst discovered the virus’ kill- switch and activated it.

Since then, however, researchers have found that hackers are using botnets— a technique used in DDoS attacks wherein congestion is created by infecting a large quantity of devices with malicious code— to attack the kill- switch and get the ransomware restarted.

In Southeast Asia, only Vietnam falls within the top 10 countries when it comes to DDoS occurrences, according to a Kaspersky DDoS intelligence report.

But the growing installed base of Internet of Things ( IoT) devices ( which if left unsecured can be efficient conduits for DDoS attacks) in the region puts countries at risk: IoT spending is projected to grow at 35 percent— from $ 1.68 billion in 2015 to $ 7.53 billion in 2020.

And the level of security awareness in the region is not encouraging.

An Intel Security survey of IT leaders from five Southeast Asian countries— Indonesia, Malaysia, the Philippines, Singapore, and Thailand— revealed that when it comes to awareness of IoT security controls, IT experts from the Philippines emerged as the most mindful, and yet only 53 percent of them had an awareness of the need to enhance security controls.

All the other countries came in with scores below 50 percent, with Thailand ranking lowest at 39 percent.

“Organizations that are looking to make substantial investments in IoT have to be proactive in increasing their awareness of DDoS threats and adopting mitigation measures,” says Greg Navarro, Managing Partner & CEO of NA& Co. “We caution, espe- cially service delivery companies in the e- commerce, travel, and media industries— for which Southeast Asia is forecasted to have the fastest growing internet market, and government offices that have critical online services, such as the Bureau of Internal Revenue. Any DDoS attack that renders these websites or services unusable will prove quite costly.”

5G maybe

Besides the proliferation of unsecured IoT devices, the availability of ever higher bandwidth speeds such as 5G has also contributed to the escalation of the DDoS threat.

In Southeast Asia, the stage of 5G development is rather fragmented: Some countries are still in the early stages of adopting 4G, while others - such as the Philippines— have already adopted 4.5G or LTE- Advanced and are also performing 5G trials.

But as consumers in the region become increasingly dependent on their mobile devices, networks will likewise be expected to deliver higher bandwidth capacities.

Southeast Asia’s smartphone subscription rate is expected to reach 829 million in 2021, increasing at a compound annual growth rate ( CAGR) of 15 percent.

Average data traffic usage per smartphone is also booming: It exceeded 1.2GB/ month in 2015 and is expected to reach 9 GB/ month in 2021, representing a CAGR of 40 percent.

There are, however, several factors that may inhibit the adoption of 5G.

Government policies and regulatory enforcement on spectrum allocation and auction processes will be an important driver in the success of a 5G network.

Also, 5G technology standards have yet to be defined. For example, it is difficult to define the required equipment for 5G networks, so it is essential for pioneers to work with vendors and regulators to define technology requirements.

Nevertheless, there is talk that 5G will be a reality for Filipino consumers by 2020.

Machine learning unplugged

Deloitte predicts that over 300 million smartphones, or more than a fifth of units sold in 2017, will have on- board neural network machine learning capability— the process by which computers can get better at performing tasks through exposure to data.

This will allow smartphones to perform machine learning tasks even when not connected to a network.

Within Southeast Asia, consumers acquiring more tablets and smartphones, and enterprises increasing their adoption of IoT technologies will contribute to the positive growth trajectory of machine learning, the transformative power of which cannot even yet be imagined.

“If you apply it to urban living alone, the collection and analysis of data that will be possible through machine learning can have a huge impact on improving the infrastructure and services that will enable a higher quality of life for residents,” says Navarro. “This data can be used for real- time monitoring of road demand and congestion, and can even predict incidences and quickly deploy recovery measures. It could be the answer to our highly stressful and even dangerous daily commute.”

Digital navigation goes indoors

Currently, indoor spaces remain a blind spot for satellite- based digital navigation since satellite signals are often too weak to penetrate solid roof. Deloitte predicts that by 2022, at least a quarter of all human and machine uses of precision digital navigation will include an indoor leg or be for an entirely indoor journey.

This compares to less than 5 percent of all uses in 2017.

Improvements in LTE network density and WiFi, as well as the introduction of emerging technologies such as beacons and magnetic positioning, are paving the way for the commercial adoption of indoor navigation, creating a new digital experience across consumer and enterprise sectors.

“Here in the Philippines, retail is one industry that will benefit directly from the adoption of indoor navigation,” says Navarro. “Considering the number of malls we have and their considerable sizes, this technology will al- low mall owners to differentiate their customer experience by providing a fast and convenient way for shoppers to find their way. For enterprise users, the data generated from indoor navigation will allow them to optimize their resources by, for example, adjusting rental fees based on route popularity, or adjusting air- conditioning and lighting in real time to reduce electricity costs.”

Of course, this all depends on the availability of adequate infrastructure.

LTE coverage across Southeast Asian countries ( with the exception of Singapore) ranks around or below the global average, making it difficult to achieve a high accuracy of indoor positioning.

The Philippines, in particular, is one of the lowest ranked countries in the world in terms of LTE coverage, but operators have committed to achieving 95 percent LTE coverage across cities and municipalities by the end of 2018.

TV advertising faces challenges

Increasing competition among traditional TV, PayTV, and OTT ( over- the- top) players has made TV advertising markets in Southeast Asia less predictable.

The introduction of smart mobile devices and the growth of internet penetration and online media are changing media consumption habits in a fundamental way.

According to Deloitte’s Global Mobile Consumer Survey, 9 out of 10 respondents in Indonesia, Malaysia, the Philippines, Singapore, and Thailand watch TV on their mobile phones.

Mobile watch- time in the region is growing at a rapid year- on- year rate of 125 percent, compared to 78 percent in the US.

Time- shifted programs

Deloitte predicts that DDoS attacks will become larger in scale, harder to mitigate, and more frequent.

and catch- up TV are also quite popular in the region: 71 percent of Filipinos and 84 percent of Indonesians view this kind of content.

Indonesia, the Philippines, and Thailand have also emerged as the top countries for consuming video content on social media.

All these digital channels are taking audiences away from traditional TV, which is why average time spent watching TV is projected to decline across Southeast Asia. In 2016, the average time spent watching TV was 152.5 minutes per day.

That figure is expected to decrease to 151.9 minutes per day this year. But this isn’t necessarily the beginning of the end for TV advertising.

“For most markets in Southeast Asia, we will likely see a shift towards multichannel platforms and online TV advertising,” says Navarro.

Traditional TV broadcasters have picked up on this trend and have developed their own online channels, websites, and applications to tap into this phenomenon.

ABS- CBN, for example, developed its Digital Marketing Periodic Table of Elements to give advertisers a better idea of what may still be a confusing array of brand campaign tools available to them in the digital space.

“Ultimately, this competition between traditional and online advertising channels may not result in the cannibalization of revenues,” says Navarro. “Instead, we may see the development of new, previously untapped channels that advertisers can use to target specific audiences. So maybe traditional TV has more competition now, but we do see it remaining a central part of the home and the most effective mass market advertising media in terms of reach and time.”