Top telcos tie up to expand nationwide backbone capacity

Four of the biggest telecommunications companies in the country have pooled their resources to expand the capacity of one of the country’s biggest nationwide backbones to meet the growing demand for high bandwidth connectivity in the Philippines.

Lopez-owned Bayan Telecommunications (BayanTel), Smart Communications, Globe Telecom and Digital Telecommunications Phils. Inc. (Digitel), four of the co-owners of the National Digital Transmission Network (NDTN), have invested $1.8 million for the Expansion-3 project to meet growth, especially in Mindanao. BayanTel contributed around 85 percent of the new investment.

NDTN was launched in 1999 and built at an original cost of $70 million as the country’s second private-owned nationwide telecommunication. The network was organized by a seven-member consortium composed of BayanTel as majority owner, Digitel, Eastern Telecoms, Extelcom, Globe, PT&T and Smart. It is maintained through an operating company, the Telecoms Infrastructure Corp. of the Phils. (Telecphil) which is 57 percent owned by BayanTel, with the rest of the stake distributed among the other co-owners.

Prior to Expansion-3, there had been two expansions, the first costing $6.3-million (Expansion 1 project completed in December 2004) which was financed by BayanTel, Digitel, and Eastern, and another costing $1 million (Expansion 1-A which was just recently placed into service). The decision of Globe and Smart to invest in the new expansion, their first since the NDTN inception, is a more economical way of obtaining additional bandwidth capacity, insiders say.

The telecommunications backbone has a total length of 2,741 km., which carries and distributes long distance, voice, data, and video signals through a combination of terrestrial microwave and submarine fiber optic cable. It supports the local exchange operations of member companies by providing a seamless nationwide link which runs through Isabela, La Union in the north, Batangas in the east, Bicol region in the west and Davao in the south.

Officials said the expanded network would maximize the country’s prospects for attracting more BPO (business process outsourcing) investors for whom dependable connectivity is critical with most of their customers and main hubs based overseas. This now primes the Mindanao area as an attractive option for BPO offices and branches.

"The enhanced network can now provide a more robust and reliable infrastructure to support the delivery of emerging technologies such as VoIP, wireless broadband, and other high-bandwidth services nationwide that would enable BPOs and other businesses with higher monetary and operational returns from their technology investments," according to Bayantel chief executive consultant Tunde Fafunwa. "This would also address the ramped-up demand for broadband internet in the provinces where we intend to capture a significant share of the market."