With the mobile phone penetration rate in the country already at around 70%, there is now "a little less demand for mobile services," prompting telcos to look for other revenue streams. In the case of Globe Telecom, one of the country's biggest telcos, expanding its broadband business is the focus right now, said Gil Genio, Globe business and carrier services head.
"Broadband is a very important source of growth for Globe. We should note that out of the country's 20 million households, only two million or 10% have 'some form' of broadband so the opportunity is really huge," Genio said, adding that there is also plenty of opportunities in the country's growing BPO industry, which has always been "bandwidth-hungry." The rising Internet use of local businesses provides promise as well.
According to Genio, broadband revenue currently accounts for less than one-tenth of Globe's total earnings, but this, he said, is continuously growing by more than double year-on-year. The telecom firm expects this growth to further continue, with broadband revenues possibly even overtaking traditional cellular revenues in the future, the Globe executive said.
Globe recently partnered with India's Tata Communications in opening up the Tata Global Network- Intra Asia (TGN-IA) cable system. The 6,700-kilometer multi-terabit cable system serves as a direct fiber route between Singapore and Japan and directly links the Philippines to Singapore, Hong Kong, Japan, and Vietnam, with onward connectivity to Guam and the mainland US. Globe Telecom owns the connection to the Philippines and is the exclusive landing party in the country.
TGN-IA provides added redundancy as the system is in a separate location, far from all existing international cable landing stations currently in Southern Luzon. It was also designed to stay away from the seismic area in Taiwan which caused huge problems in December 2006 when an earthquake damaged several submarine cables and crippled many Asian businesses.
Now "live and carrying traffic," this new cable system addresses the Philippines' need to increase bandwidth and to move away from geographical restrictions by diversifying to the north and the east, at the same time covering the underserved areas in Luzon. Globe chose to land the TGN-IA cable system in Ballesteros, Cagayan, hundred of kilometers from its other international cable landing stations in Batangas and Cavite.
The telco reportedly invested $90 million or a little over P4 million for the cable landing station, the transmission network and the fiber backhaul, while Tata invested $250 million in the project.
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