Globe Telecom to infuse more funds into 3G technology

Ayala-owned Globe Telecom is prepared to infuse additional funds into the third generation of mobile communications technology (3G) as company officials expressed optimism about the prospects of the new technology.

Globe president and chief executive officer Gerardo Ablaza said that while the company at this point has committed to spend $100 million over the next two years, half of which will be spent this year, there is nothing that will prevent the country’s second largest mobile operator from putting in more money into 3G.

"We are upbeat about the prospects of accelerating again our investments. If 3G kicks off much better than expected, then we can ramp up our investments in this technology," he explained. Globe currently has around 100,000 subscribers with 3G-capable handsets and this number is expected to grow significantly during the year.

He added that 3G technology will be around for the next 15 years "and expansion will continue over that time."

"3G is not going to be a high-end product. We want this to be affordable to the mass market although we need to have more affordable 3G handsets to do this," Ablaza said. Based on Globe’s 2G experience, he revealed that the "sweetspot" was when handsets crossed the $100 per unit market.

"When you cross this, a big market opens up so we want to push 3G handset prices down as quickly as possible," Globe’s top executive said. 3G handsets are currently priced at $300 per unit or higher.

Globe officially launched yesterday its mobile broadband 3G with HSDPA or high speed downlink packet access (commonly referred to as 3.5G), which allows faster data transfer and Internet browsing while at the same time letting subscribers enjoy basic 3G services such as video calls and video sharing. Its peak speed of 1.8 megabits per second is up to five times faster than that possible with 3G and up to 25 times faster than dial up.

Ablaza stressed that HSDPA technology lays the groundwork for the network of the future. "We anticipate that subscribers will demand greater functionality from 3G as the service becomes more pervasive and accessible. At the same time, the applications available on personal computers are increasingly being adapted to mobile phones, so the flexibility and convenience provided by HSDPA are definitely relevant to the Philippine market," he said.

Both prepaid and postpaid Globe subscribers with 3G capable mobile handsets can now avail themselves of Internet browsing using HSDPA data cards as well as other 3G services such as video calling and video IDD. Globe 3G roaming is also available to postpaid subscribers for outbound calls from Japan, Hong Kong and Singapore.

Globe said it is among less than 20 mobile operators in the world to have introduced HSDPA technology.

All these services will be priced as 2G or GSM (global system for mobile communications). Globe officials explained that the 3G pricing levels will break the perception that 3G services are expensive.

Andrew Buay, Globe chief technology officer, also explained that with the companyís introduction of 3G with HSDPA, the Philippines becomes the first country in the Asia-Pacific region with a gross domestic product per capita of less than $2,000 to go into it. "The Philippines now becomes a test case on whether 3G can be successful in a developing market," he said.

He added that this technology is a significant opportunity for the country to bring broadband Internet success wider and deeper and hopefully bridge the "digital divide."

Buay pointed out that as of end-2005, there are only 120,000 broadband DSL lines which he attributed to the lack of upgrading in fixed line networks. "With Globe’s HSDPA, we will now have the ability to bring up the broadband Internet penetration and within the next two years, bring it everywhere within the range of the 3G network. The Philippines now has the ability to bring 3G to a segment which is very relevant, unlike in other countries where it is focused on a particular high-end segment," he said.

For his part, Innove Communications chief executive officer Gil Genio, who handles Globe’s fixed line business, said 3G with HSDPA gives the customer a complete set of access choices. For instance, Globe’s recently launched wireless broadband product Visibility allows data and Internet access anytime and anywhere, using as access either GPRS, EDGE, Wi-fi, Dial-Up, and now 3.5G or HSDPA.

Buay said HSDPA allows Globe’s landline business to expand in areas where it will be expensive to build a fixed line network.