Telcos ride the broadband wave

The Philippines is now in the cusp of a broadband revolution as more Filipinos use bandwidth-hungry online applications and services. This has prompted telecommunications companies to upgrade and maximize their existing network infrastructure to support next-generation IP (Internet Protocol)-centric services. At the same time, the boom in broadband services is helping bring entry-level broadband subscription rates to more affordable levels, some even at less than P1,000 a month.

"Waging a broadband revolu-tion" is now a top agenda for the Philippine Long Distance Telephone Co. (PLDT) and Smart Communications, according to Smart president and CEO Napoleon Nazareno.

Speaking at a recent conference of the Management Association of the Philippines, Nazareno said the PLDT Group wants to make broadband a basic communication service all over the country to help improve education and create more employment, among others.

In particular, he said one of his aims is to get a convergence strategy in place and working that will result in one IP core network, including all backroom IT services, for the two companies.

"PLDT is now going in the right direction of embracing broadband technology. We have close to 6,000 cell sites. We have blanket Wi-Fi service implementation and not just hot spots. The air we breathe, whether we like it or not, will be wireless broadband," he said.

Igniting a broadband revolution is similarly the primary objective now of Globe Telecom’s subsidiary Innove Communications. The company estimates over 100,000 Filipinos now have regular broadband connections from different providers which they access either via wired or wireless means.

"In the late 1990s, a few imagined an explosion and pent-up demand for communications (like we have now). Many have limited or don’t even have copper lines before. Then a paradigm shift happened with cellular service allowing people to call a person instead of a location. Another paradigm shift will happen as broadband becomes pervasive," said Gil Genio, CEO of Innove Communications.

Even BayanTel of the Lopez Group of Companies anchors much of its comeback bid on the strength of market opportunities surrounding broadband. Tunde Fafunwa, chief executive consultant of BayanTel, said they have seen a dramatic 124 percent year-on-year increase in the company’s DSL subscription. In 2004, BayanTel only had about 3,000 broadband users. It targets to bring that number to 25,000 by next year.

In addition, Fafunwa said the Lopez Group is exploring opportunities to do a "triple-play" strategy to push content and services from its broadcast, telecom and cable businesses.

"Each brings its own strength to create synergy. Content and service can now be dispersed in different channels and medium. The next wave of media entertainment that takes advantage of telecom like IP TV is ahead," said Fafunwa.

VoIP

Meanwhile, the much-ballyhooed VoIP or Voice over Internet Protocol is one attractive application that broadband users certainly can enjoy. A VoIP service allows cheap long-distance calls over a data network like the Internet instead of the traditional voice network.

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.

Market researcher IDC, however, expects the VoIP end-user market in the Asia-Pacific region to increase by 1,000 percent from this year to 2008 or worth P5 billion.

"The Internet gives us a disruption that brings about opportunities to change the game once more," said BayanTel’s Fafunwa. "VoIP will develop in fits and starts, but the challenge is to be ready for that wave. Today, most use PCs for VoIP, but BayanTel already took it to the next level by requiring only a regular phone line to do VoIP."

BayanTel’s Sky Internet VoIP allows VoIP calls to be made through any regular telephone units that are connected to an analog telephone adaptor that comes bundled with the service. At $0.06 a minute for calls made to over 70 countries, Sky Internet VoIP is 85 percent cheaper than standard IDD rates.

Innove’s broadband subscribers, meanwhile, can download software from the company’s website to use VoIP for only $0.05 a minute to make calls to 51 countries.

To date, only licensed telephone companies are legally allowed to offer for-pay VoIP services. It is still unclear whether non-public telecommunications entities (PTEs) such as ISPs can be allowed to offer VoIP commercially.

"VoIP is like tsunami; it will come," said Nazareno. "We’ll embrace it and we will not just watch it steal our business. We will attack it frontally."