Globe, PLDT on expansion mode

The country’s two biggest telecommunications companies are embarking on separate multi-billion-peso expansion projects aimed at getting a larger chunk of the growing market for high-speed Internet access.

Globe Telecom has just bid out the $100-milion first-phase of its third backbone network project while the Philippine Long Distance Telephone Co. (PLDT) has tapped Nortel Networks Phils. to supply the switching equipment for PLDT’s fiber optic metro project.

PLDT is also into exploratory discussions with Nortel on the possibility of utilizing the latter’s voice over IP solutions that will allow voice to be transmitted over the Internet.

In an interview, Nortel managing director Antonio Pio de Roda said that there is so much room for expansion in the Philippines, especially with the number of Internet users in the country expected to grow from three percent of the population at present to 14 percent by 2005.

"This translates to nine million new Internet users. It is like a new country going on-line," Pio de Roda said.

He also noted that the Philippines still have a very low PC (personal computer) penetration rate, as well as an increasing number of cellular phone users and texters. Nortel is just beginning to position itself in the Philippine wireless market.

Nortel is a global Internet and communications leader for service providers and enterprises with capabilities spanning optical long haul, optical metro, wireless Internet, Intelligence Internet, and voice over the Internet Protocol (VoIP).

Among the major projects that Nortel had in recent years was that of Broadband Phils., the $150-million phone lines project for Bayan Telecommunications.

Pio De Roda, who just joined Nortel after being chief operating officer of Sun Microsystems Phils., said that Nortel is positioning itself to take a huge share of the wireless market in the Philippines to compete with Nokia and Ericsson.

Nortel has leading market positions in all current wireless technologies and is establishing a strong position in the next generation wireless technology known as 3G or third generation. "But in the Philippines, we expect the cellular companies to introduce 3G only after two years since they have yet to commercialize GPRS (general packet radio switch) or second generation cellular technology," he said.

The company also hopes to be able to supply companies that use CDMA (code division multiple access) such as Piltel and Extelcom if ever they want to go into 3G. Cellular companies like Globe, Smart, and Islacom, as well as Digitel, which is planning to enter the mobile phone market next year, utilize GSM.

Third Generation (3G) mobile phone technology uses either CDMA or GSM as a platform. China for instance uses the 3G version of CDMA.