Filipinos, telcos all gung ho

Filipinos are all gung ho over what lies ahead in terms of Internet connectivity in this country.

Why shouldn’t they? After all, the country’s two largest wireless internet service providers have both laid out ambitious plans to improve their respective services following their acquisition from the San Miguel Corp. (SMC) group of the 700 megahertz spectrum that will help them significantly improve internet speed, quality and coverage, provide better indoor coverage, and enable faster rollout in rural areas.

PLDT chief executive officer Manuel V. Pangilinan has said that his long-held goal of providing “#InternetForAll will no longer be a dream, but a reality” following the approval of the agreement PLDT and Smart signed with Globe Telecon to jointly use the 700 MHz band they acquired from SMC last May 30.

Pangilinan explained that for years, PLDT and Smart have pursued this dream and that with recent developments, “we are yet another step closer to providing faster, more reliable and affordable internet services.”

Within a week of the joint use agreement, PLDT/Smart and Globe already harnessed their newly acquired 700 MHz band as both separately announced their initial rollout plans for the high-speed mobile infrastructure in their respective LTE-based wireless and fixed broadband networks.

Smart deployed its first 700-MHz base station in Tanay, Rizal, and then its second at the Ecoland in Matina, Davao City. A download speed of 101 mbps was achieved in both sites.

PLDT announced that before the year is over, 360 cell sites in Manila, Cebu and Davao would be outfitted with equipment using the 700 MHz spectrum.

Meanwhile, Globe senior vice president Joel Agustin said his company set up its first site near the Hardin ng Bougainvillea at the UP campus in Quezon City, with a download speed of 66 to 100 mbps. He revealed they would roll out the 700 MHz band in 200 sites before end-2016.

To ease apprehensions the 700 MHz band would benefit only those with high-end mobile devices, such as tablets with 4G and LTE (long term evolution) capabilities and LTE-capable smartphones, Pangilinan said even while they are accelerating the rollout of their 4G/LTE service this year using the 700 MHz spectrum and other frequencies, they are, at the same time, holding talks with device manufacturers to make affordable handsets and tablets compatible with the 700 MHz band available to the public as early as possible.

As if these good news weren’t enough, PLDT and Globe subsequently inked a bilateral internet protocol (IP) peering agreement on sharing each other’s online content. This would allow their respective internet subscribers to download and upload local content faster and cheaper.

With this content-sharing agreement, content and applications hosted by the PLDT Group that are being accessed by Globe customers will be treated as local content, and will no longer be routed overseas and vice versa. This will put an end to the previous setup that entailed additional IP transit costs plus data transmission delays in downloading sites.

Under this IP peering deal, PLDT and Globe will both provide its subscribers with a three gigabits per second speed (Gbps) per month free traffic threshold.

PLDT legal and regulatory group chief Ray Espinosa further revealed they are looking at a “complementary effective measure” on local caching, wherein they would work with the likes of Facebook, Google and Youtube for storing of popular internet content in the Philippines so that Filipinos can access these online data more quickly.

Espinosa said caching is needed because about 90 percent of internet content that are popular among Filipinos comes from overseas.  This is also why PLDT is building more state-of-the-art data centers, he added.

For his part, Globe chief technology officer Gil Genio said that with an effective domestic internet peering in place, Globe customers will gain direct access to content and applications hosted by PLDT data centers and vice-versa, and that this agreement will redound to a better experience on internet services benefitting customers of both parties and the country as a whole.

A recent study by the Philippine Institute for Development Studies (PIDS) explains the direct relation between digital interconnectivity and economic growth, noting that only a fast-track upgrade of our national information and communications technology (ICT) network would lead to a faster and more affordable internet services, which, in turn, could sustain and boost our country’s growth streak.

Citing a World Bank study, the authors said every 10-percent increase in high-speed internet connection corresponds to a 1.3-percent rise in economic growth. They called on the government to invest in building a reliable, accessible and affordable ICT infrastructure across the country.

With their new radio frequency acquisitions, PLDT and Globe are ramping up their capital expenditure.

PLDT’s Smart intends to fire up 360 cell sites with 700-MHz technology by end-2016, while Globe plans to deploy 200 cell sites for this.

PLDT is spending P5 billion more for this LTE upgrade on top of its 2016 capex of P43 billion to transform its network into the country’s most extensive and data-capable infrastructure, Pangilinan has said.

Acquiring the additional frequencies on the 700 MHz band is important not only because it allows Smart and Globe to provide high-speed internet covering long distances, but also because radio frequency is the “highway” of the wireless internet. The more highways an operator can use, the more data traffic that its network can handle, company officials explained.

To keep the field open for competition,  PLDT/Smart and Globe are returning to the government several frequency bands held by their companies and some of those they got from SMC.  These include parts of the 700, 850, 2500 and 3500 MHz bands.  Such returned frequencies and the others still held by the government would be assigned to a new telecom player who would want to enter the market.

Meanwhile, because the 700 MHz spectrum covers larger areas than higher frequency bands, cellphone signals can now extent to unserviced areas like hard-to-reach rural communities without the need to build additional cell towers. This translates into savings for telcos that they can pass on to their consumers by lowering rates for broadband services.

Transferring these frequencies to PLDT/Smart and Globe should be done fast and without delay, however.

A joint study done by the Boston Consulting Corp. and GSMA (Groupe Speciale Mobile Association), which represents mobile operators worldwide, showed that losses in the Asia-Pacific region accruing from delays in the allocation of the 700 MHz band by just one year could reach $40 billion (representing additional gross domestic product growth) and another $70 billion in indirect losses in the next three subsequent years.

Using the 700 MHz band would also generate “significant” ”socioeconomic benefits for the region, the study said. It also estimates that by 2020, “digital dividends” for the Asia-Pacific from the use of the 700 MHz band would lead to a GDP increase of more than $1 trillion combined, growth in tax revenues of $215 billion, 1.4 million new businesses and 2.7 million new jobs.

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