Capwire shifts to growing data market

Capwire Wireless Inc. is shifting its focus from its traditional voice service to the fast growing data market in a bid to make its business more profitable and attractive to new foreign investors.

The company is in the middle of discussions with at least three foreign groups on the possibility of infusing much-need additional equity as well as technical expertise which is deemed necessary for the company’s entry into the data business, a field which industry giants such as the Philippine Long Distance Telephone Co. and Globe Telecom Inc. as well as Bayan Telecommunications are pouring heavy investments into.

Sources told The STAR that Capwire will be unveiling its new services in the next few weeks. The company currently has a subsidiary that provides Internet service which is only a meager part of what the data business can offer.

Officials said that since the company has just begun the restructuring of its P940-million debt, it is not yet advisable to go into capital intensive businesses. "We will probably be using our existing facilities such as satellite and relay whose utilization needs to be maximized," they said.

They also revealed that many of their corporate clients in voice want to shift to both voice and data.

As to the entry of a foreign partner, Capwire executive vice president Maureen Santiago earlier said that its mother company Republic Telecommunications Holdings Inc. (Retelcom), will still retain a majority stake in Capwire.

Capwire is majority owned by the Santiago family represented by Retelcom. It is in the first year of its eight to nine-year debt restructuring program. The company earlier set aside a capital expenditure budget of P150 million this year or even less which will be used to acquire newer generation switches.

Capwire’s shift to the data business is triggered not only by the huge potentials offered by data but also by declining revenues from international long distance calls.

During the fiscal year 2000 ending June 30, Capwire incurred a net loss of P80 million as against P13.89 million in 1999 although its cash flow improved substantially.

Among the services currently being offered by Capwire are international long distance voice services to wholesale and retail customers; reorigination services (hubbing) to more than 200 countries; Internet access and value added services like voice over the Internet (VoIP) and web hosting; global frame relay; international leased circuits and private network, and domestic satellite services, among others.

The company’s plan involves strengthening the data business to supplant the decline in long distance revenues. One of the business which Capwire is seriously looking into is broadband access for data and voice services.