Friday, April 04, 2008 Telco sees growth in broadband, pours millions on infrastructure
BROADBAND can grow as much as the cellular phone industry as more Filipinos use the Internet and with the lowering of PC (personal computer) prices, an executive of Globe Telecom said Monday.
“While the consumer broadband industry is still in its infancy stage, we are already seeing a surge in demand reminiscent of the growth we saw in the cellular space a few years ago,” said Globe Telecom president and chief executive officer Gerardo Ablaza Jr. during the telecommunications company’s annual shareholders’ meeting at the Intercontinental Hotel in Makati City.
“Broadband will be the main growth engine of the Philippine telecom industry,” he added.
In anticipation of this growth, Ablaza said Globe joined a consortium that is building a new trans-Asian submarine cable system that will link the Philippines to Japan, Hong Kong, Singapore and the United States. The project, expected to be completed in the second half of this year, will provide “resiliency, redundancy and sufficient capacity” to Globe’s Internet network, he added.
He said the cable system will prevent the country, and other Asian countries linked to the infrastructure, from experiencing the same fate after an earthquake that hit Taiwan in December 2006 disrupted Internet connections in Asia.
“We are bullish about the broadband business and intend to intensify our efforts to build a more pervasive network, using both wired and wireless technologies,” he said.
Ablaza said the company’s expectations are supported by a 96-percent growth in its broadband revenues to P1.2 billion, which comes with the increase of 133 percent in its subscriber base that has gone past 120,000.
He said Globe holds about 24 percent of the broadband market despite its small landline footprint nationwide.
In line with its plans to get a bigger market share and improve its services, Globe is constructing a second fiber optics backbone network (FOBN) linking the Visayas and Mindanao.
Globe-Innove chief executive officer Gil Genio, during a press conference following the shareholders’ meeting, raised the need for Globe “to create more highways, more backbone.”
FOBN 2, implemented in cooperation with other telecommunications companies in the country, will improve Globe’s services in the Visayas and Mindanao, said lawyer Froilan M. Castelo, Globe regulatory affairs head.
Castelo told Sun.Star Cebu that Globe also plans to install more overhead cables for redundancy and to prevent service cuts.
He said Globe’s Internet services were jeopardized sometime last year when unscrupulous individuals cut and stole submarine cables totaling six kilometers in length somewhere off Panay Island.
Globe has filed economic sabotage charges against the alleged perpetrators, including those who bought the cables.
Castelo said public infrastructure work also threatens the safety of underground cables. Although utility companies that conduct excavations coordinate with each other, some diggings have caused damages on cables and jeopardized Globe’s services.
He said, though, that telecom companies cannot do away with cables at present, as they provide more reliability than wireless systems.
Ablaza also said that while 3G (third generation) users are fewer than expected, its infrastructure can be used to support mobile broadband services.
Globe officials have assured that the company will continue to invest in the country, particularly in its broadband infrastructure, despite the anticipated challenges this year.
Ablaza said the effect of the economic slowdown in the United States has been marginal, even though many overseas Filipinos may be more careful with their spending.
“People shouldn’t worry about returns (of investments). (Instead), we should be more prudent about use of resources so as not to undermine profitability,” he said. (LAP)
