PLDT eyes 2nd cable link, to invest $100m

Philippine Long Distance Telephone Co. plans to invest up to $100 million to build a second international cable landing to the US to support the rising demand for high-speed broadband.

“We are still in the planning stage for our second international cable landing to the US. The investment could range between $50 million and $100 million,” PLDT International Network vice president Gene Sanchez said.

“We are targeting to sign the memorandum of understanding within the year. It’s going to be a consortium of telecom companies,” he added.

Sanchez said the company was looking at Daet in Camarines Norte or Batangas as landing station in the Philippines.

PLDT’s first international cable landing to the US was the $550-million Asia-America Gateway, a 20,000-kilometer high-bandwidth optical fiber linking Southeast Asia to the US. PLDT contributed $50 million to the project.

The AAG consortium consists of 19 parties providing connectivity among the Philippines, Malaysia, Singapore, Thailand, Brunei Darussalam, Vietnam, Hong Kong SAR, Guam, Hawaii and the US West Coast. The facility also supplied seamless interconnection with other major cable systems connecting Europe, Australia, other parts of Asia and Africa and using Dense Wavelength Division Multiplexing technology to provide upgradeable, future-proof transmission facilities for telecommunications traffic.

PLDT leads the country among providers with the most number of international cables as well as landing stations. The AAG cable will be PLDT’s fourth international cable link up for upgrade to 100G technology, following the Asia Pacific Cable Network 2 and the Japan-US Cable system. The Asia Submarine Cable Express 100G upgrade is ongoing.

“We’ve always anticipated the need to constantly increase our capacity especially in serving the country’s leading industries given their demand for a resilient, low latency, and expansive data-driven network such as the BPO and outsourcing industries,” said PLDT head of Enterprise, International and Carrier Business Eric Alberto earlier.

PLDT was also the first network operator in the Philippines to deploy 100G in its domestic fiber optic network. When it was launched in 2012, the Philippines rose in leadership position in Asia-Pacific, among only a handful of other countries in the region to deploy 100G technology in its domestic network.

PLDT by the end of 2014, PLDT had an additional 15,000 kilometers of new fiber optic cable facilities with an estimated investment of over P1 billion to reach nearly 100,000 kilometers of fiber optic cables laid out to meet the surge of expected data traffic, more than four times the competition.

PLDT earlier reported core profit, which excludes foreign exchange transactions and other non-recurring items, of P9.3 billion in the first quarter from P9.8 billion last year.

Net profit was nearly flat at P9.39 billion in the January-to-March period, as revenue stagnated at P42.6 billion. Service revenue dipped 2 percent to P40.5 billion in the quarter, following the drop in short messaging service and voice revenues.

PLDT said wireless service revenues slid 4 percent to P27.9 billion in the first quarter from P29 billion last year.

Small steps leading to a giant leap?

Good news first. The government has taken the first step to consolidate all of its agencies involved in information and communications technology.

The Senate has passed its version of a law which would establish a Department of Information and Communication (DICT), separate and distinct from existing government agencies, and would take the role of promoting information and communication technology (ICT) across the country, both in the public and private sectors.

This ICT function is currently within the mandate of the Department of Transportation and Communications (DOTC); when the bill becomes law, the DOTC will focus only on transportation, which already is an area that requires its full concentration.

Under the proposed DICT law, all other existing ICT functions in other government agencies, including the Department of Science and Technology, will also cease to exist.

Affected agencies and government offices are: the Information and Communications Technology Office, the National Computer Center, the National Computer Institute, the Telecommunications Office, and the National Telecommunications Training Institute.

Three other agencies, namely the National Telecommunications Commission, the National Privacy Commission and the Cybercrime Investigation and Coordination Center, would also be linked to the DICT to enhance the country’s fight against cybercrimes.


More legislative work needed
The bad news is the House is still not ready to pass its counterpart version, a move that is a precursor to bicameral meetings, and finally, the passage of the law.

The Philippines could well be one of the last countries in the world in this day and age which has both transportation and communications under one major government body.

Let’s hope this initiative to separate the functions of transportation and ICT, which was first proposed during the previous administration, will finally push through during P-Noy’s term given the need for the country to have a single agency focused on ICT-related concerns.

Martial law legacy
Born in 1979 during the martial law regime as the Ministry of Transportation and Communications (MOTC), it formerly shared one umbrella known as the Ministry of Public Works, Transportation and Communications. The public works function was then moved to the Ministry of Public Works and Highways.

The MOTC was already partial to transportation-related functions, counting as its first major projects the Light Rail Transit System, a computer-controlled traffic lights system, and the Manila International Airport (now Ninoy Aquino International Airport).

Other major projects included the establishment of a motor vehicle registration and control system, and the introduction of permanent vehicle license plates and the staggered registration system. A bus leasing program was also introduced to add 1,000 new buses in Metro Manila.

The operation of the Metro Manila Transit Corporation was also expanded and the rehabilitation of the Manila South Line of the Philippine National Railways serving the Bicol Region was initiated.

Clearly, just by looking at these starting concerns, the MOTC (which eventually became the Department of Transportation and Communications after the martial law days) had its hands full.

Free Wi-Fi
Another spot of good news, if just for the fact the purpose is laudable, is the initiative by the DOST’s Information and Communications Technology Office to provide free Wi-Fi access for the whole country in public areas.

The listed areas, in order of priority, are plazas and parks, public primary and secondary central schools, libraries, rural health units and government hospitals, state universities and colleges, train stations of the MRT and LRT systems, airports and seaports, city and municipal halls, and national government offices.

At first glance, I would question plazas and parks as being the priority in the list. I would have thought schools would be best served first, or health centers, or local and national government offices.

Reminds me of the scandalous national broadband deal involving the Chinese firm ZTE.

Pa-pogi DOST initiative?

The underlying reason should be not to provide the public per se free Wi-Fi access since this would be a waste of time, effort, and finances – clearly misguided reasoning given the current conditions of the ICT sector in the Philippines.

Unless, of course, this was a pa-pogi initiative by DOST Sec. Mario Montejo, politically motivated either by the upcoming 2016 elections or the passage into law of a DICT.

There is seemingly a strong financial reason for government to undertake its own free Wi-Fi project given the huge amounts government pays to private telecommunications service providers, on top of what public servants dish out from their own pockets.

Enabling a government Wi-Fi system, even if the speed access is severely limited at first, could still prove to be beneficial just as long as the end goal would be to continually upgrade, improve, and expand the system to cover more essential public spaces.

Stronger broadband
But more than free Wi-Fi, government needs to seriously look at its own broadband backbone to connect all its offices under one network at a significantly lower cost and hopefully improved connectivity.

So far, South Korea has been the only country that has managed to structure its broadband services so that it is now regarded as a model for empowering its citizens to securing access to the Internet at very affordable rates.

The DICT that will be formed should make Internet access available to more and more Filipinos, especially now the country is emerging as one of the hottest economies in the world.

PLDT allots P26 B for wireless capex

Dominant carrier Philippine Long Distance Telephone Co. (PLDT) is spending P26 billion for the capital expenditures of its wireless business this year amid the segment’s slowing revenue contribution.

The budget allocation for its wireless business accounts for 66.7 percent of the total P39-billion capital expenditures of the PLDT Group for 2015.

In its annual report submitted to the Philippine Stock Exchange (PSE), PLDT said capital spending for its wireless segment would focus on building out coverage, leveraging the capabilities of its newly modernized network and expanding 3G, 4G, and LTE (long term evolution) including its backhaul and wireless broadband networks in order to enhance data transmission capabilities.

PLDT added that it intends to enhance network and platforms infrastructure and systems to support solutions deployment, campaign analytics, and service delivery to enable customized and targeted services.

The company pointed out that it would also further expand mainstream services and integration with the PLDT Group core and transmission network to increase penetration particularly in the provinces to achieve greater business benefits from a closely synergized environment.

The share of the wireless business in the total revenues of the PLDT Group has been declining steadily to 64 percent last year from 66 percent in 2012.


PLDT’s cellular subscriber base through Smart Communications Inc. and Digitel Mobile Philippines Inc. (Sun Cellular) reached 69.86 million last year.

Cellular penetration in the Philippines increased to approximately 114 percent last year from 108 percent in 2013 due to the existence of subscribers owning multiple SIM cards.

On the other hand, the listed telecommunications provider earmarked P13 billion for its fixed line segment accounting for 33.3 percent of the PLDT Group’s total capital expenditures this year.

For its fixed line segment, PLDT said it would continue the build-out and upgrade of broadband data and IP infrastructures, fixed line data services, expanding transmission network, increasing international bandwidth capacity, and network maintenance.

PLDT’s fixed line business offers local exchange, international long distance, national long distance, data and other network and miscellaneous services had a subscriber base of 2.21 million last year.

The segment’s contribution to the total service revenues of the PLDT Group has been increasing to 36 percent last year from 34 percent in 2012 due to the increase in data and other network service revenues in recent years.