Technology advancement downgrades IDD service

Because of the rapid development of technology, the expensive International Direct Dialing (IDD) service is projected to become an ordinary service, which means a no-extra-service feature of the Philippine telecommunications industry.

"Time will come that the international direct dialing will be rated as an ordinary call, because it will be embedded by the development of telephony starting with the VoIP [Voice Over Internet Protocol]," said Innove Communications president Gil B. Genio in a recent interview.

In fact, he said Innove, which is a wholly owned subsidiary of Globe Telecom has started to lower its international long distance call rates in the wireline or fixed line service in selected countries, due to partnerships with other telecom companies overseas.

IDD, which used to be a very profitable service of landline telecom operators in the Philippines will soon be hit by the advent of technology, in fact VoIP technology is now starting to wipe out the huge charges of IDD rates imposed by telecom companies.

"We started offering VoIP service which lets our subscribers place calls to other countries at much lower international rates. Towards the end of 2005, Globe Broadband offered 30 free minutes of IDD through its VoIP services," said Globe Telecom president and chief executive officer (CEO) Gerardo C. Ablaza Jr.

Instead of being threatened by the VoIP technology, Genio said Innove's wireline brand Globelines is going to embrace this development, and still find avenues to grow and develop new features and products to sustain the wireline business.

Last year, Globelines' IDD performance grew by only one percent, from P670 million revenues in 2004, to P679 million in 2005.

For the full year 2005, Globe's wireline business through Globelines recorded a double-digit growth of 14 percent in total wireline net operating revenues.

The overall 14 percent growth is attributed to growth experienced in both voice and data segments, as well as non-service revenues.

Innove, provides Globe's wireline voice communications services, including local, national long distance, IDD, and other value-added services, through its postpaid, prepaid and payphone lines.

Globelines' largest area of coverage is the entire Visayas region, which used to be the major franchise area of the company, after it acquired the defunct Isla Communications few years back.

Just last year, Innove was awarded by the National Telecommunications Communication (NTC) with a nationwide franchise for the wireline business, allowing the company to expand its network all over the country.

Innove's GlobeQuest brand offers end-to-end corporate data solutions including international and domestic data services, wholesale and corporate Internet access services, data center services and segment-specific solutions customized to the needs of vertical industries.