BayanTel rolls out VoIP in households

The country’s first carrier-grade Voice over Internet Protocol (VoIP) service for the home market is coming to areas where BayanTel operates. Starting at P499 a month, Sky Internet VoIP brings to the masses a technology primarily touted for the savings it allows on long-distance calls.

BayanTel, which currently has about 8,000 DSL subscribers, expects its VoIP product for the residential market to dramatically boost its broadband market share to reach 25,000 subscribers by next year. In 2004, BayanTel only had about 3,000 broadband users.

"We have this service to stabilize our LEC (local exchange carrier) business for long-distance calls which has been really threatened by cellular services, texting and low IDD rates," admits Rodrigo Montinola, BayanTel vice president for the retail market. "Our VoIP offerings will help us grow in pace with the growth in our broadband subscribers."

Designed to work in any good broadband connection, Sky Internet VoIP, like any VoIP service, will transmit telephone calls over a data network like the Internet instead of the traditional voice network.

At $0.06 a minute for calls made to more than 70 destination countries like the United States, Canada and Southeast Asian nations, Sky Internet VoIP is 85 percent cheaper than standard IDD rates, claims BayanTel executives.

"At P499, Sky Internet VoIP brings 38 percent savings compared to the usual P800 monthly telephone charges from other telcos, at least 75 percent savings on IDD, and 53 percent for calls to mobile phones," says Joevel Rivera, BayanTel vice president for product development and management

Sky Internet VoIP, Rivera continues, offers national domestic calls at lower rates, unlimited free local calls and special phone features (e.g. caller ID and caller waiting) and a security personal identification number (PIN).

The basic monthly plan for P499 has 100 free IDD minutes, the premium plan for P999 has 300 free IDD minutes, while the supreme plan for P1,499 comes with 500 free IDD minutes. Under a traditional telephone subscription, users would have paid more than P6,700 on IDD charges alone, says BayanTel.

Sky Internet VoIP calls can be made through any regular telephone units that are connected to an analog telephone adaptor (ATA). Sky Internet VoIP is bundled with a free ATA from Cisco/Linksys, but has an installation fee of P2,999.

In addition, calls made from a Sky Internet VoIP line to another BayanTel VoIP line is free, but NDD charges apply when a Sky Internet VoIP line is used to call a non-VoIP BayanTel line. Rates for excess IDD usage also apply, ranging from $0.10 to $0.40 a minute, depending on the classification of the country being called. The service is offered under a money-back guarantee within 15 days upon installation.

VoIP Market

Faced with mounting competition from other carriers and even from non-franchised service providers which also want to offer VoIP, BayanTel went ahead with this new service without waiting anymore for the final ruling of the National Telecommunications Commission (NTC) on the VoIP issue. The NTC is expected to release next week its final resolution on whether VoIP is a value-added service that even non-telcos could offer, or not.

"Why wait for all things to be resolved when we can introduce VoIP now even to residences, without the NTC resolution yet? We are a telecom company with a license to do it," says Rivera.

Rivera believes the attention the technology has been getting since the NTC issued its draft guidelines is a good indication that the local market is ripe for a reliable and accessible VoIP service.

"Internet access has grown leaps and bounds and broadband DSL subscribers, in particular, have seen triple digit growth in the last few years. BayanTel has been one of the more aggressive players in providing DSL services to the residential market. With wider Internet penetration, there is greater opportunity to deliver IP-based services to households, and VoIP is certainly one of the most appealing and functional applications that we believe would benefit most consumers," says Rivera.

But while VoIP is still a novelty technology for the home market, corporations have, for years now, been using their data networks to carry VoIP applications between locations or through the Internet for calls made to international destinations.

In fact, BayanTel first tapped the corporate market for VoIP with the launch last year of its voice over broadband (VOB) application that allows voice to be transmitted via broadband DSL lines.

However, carriers like BayanTel are seeing that demand for broadband from the home market can outgrow that of the enterprise market. Already, residential users account for 60 percent of BayanTel’s DSL subscribers and by next year, the number is poised to reach 80 percent, says Rivera.

The country’s total number of broadband users last year was pegged at only 100,000, a measly 1.2 percent of the entire number of local Internet users. Residential subscribers number about 50,000 for the Philippine Long Distance Telephone Co.; 7,000 for MyDestiny; 3,000 each for Globe and SkyCable; 1,500 for Eastern Telecoms; and about 500 for Meridian.

In the US, where VoIP is classified by the Federal Communications Commission as an "information service," the number of users is now estimated to be around five million with operators reporting new subscribers in tens of thousands weekly.

Last Mile

Meanwhile, BayanTel has completed the Metro Manila portion of its next generation network (NGN) that would allow the company to support multiple applications including Internet Protocol (IP).

The second phase, which covers all the major nodes of BayanTel nationwide, will be ready by next month. The NGN aims to optimize the nationwide network of BayanTel, allowing seamless deployment of Sky Internet VoIP anywhere in the country, says Rivera.

"In the next 18 months we will upgrade our infrastructure to push broadband that will support applications like VoIP… Majority of our growth in the future will be in this product so we are preparing our network to deliver broadband to the last mile," says David Rogers, BayanTel senior consultant for network operations.

BayanTel also recently announced plans to roll out a wireless broadband service and just recently launched a Wi-Fi service in partnership with Airborne Access.

As of June 2005, the company said it has achieved 18 consecutive months of business growth since 2004. Net revenues grew by nine percent at P2.9 billion as of June 2005 compared to P2.66 billion during the same period last year. This was on the back of a 17 percent hike in data services during the comparative period, with strong growth coming from international private lines, frame relay and IP-VPN services.

DSL revenues also posted a 96 percent increase at P130 million compared to P66 million in the first half of 2004. BayanTel also posted a 19 percent growth in EBITDA (earnings before income tax, depreciation and amortization), a key financial metric for the company, at P1.3 billion compared to P1.09 billion during the same period in 2004.