Digitel allots $300M for network expansion

Gokongwei-owned Digital Telecommunications Phils. Inc. (Digitel) is spending around $300 million (P12 billion) this year for the expansion of its cellular, fixed line and broadband networks.

This as Digitel president and CEO James Go forecasts the number of their mobile phone service subscribers (under the Sun Cellular brand) to grow from the current six million to 10 million by yearend. “We hope to hit high double-digit by next year,” he said.

Go likewise revealed that they have just soft-launched two new services, namely Sun’s 3G/3.5G mobile phone technology and their wireless broadband service. The 3G service is expected to start commercial operations next month.

He said Sun Cellular expects to end 2008 with 4,000 cellsites under the ongoing Phase 8 of their expansion program, as against 2,600 cellsites under Phase 7 of the network rollout.

“We are building a telecommunications network that is comparable, if not better, than those of the older players. Our voice and data technology are one of the best in the market. We are employing the latest technology. Our primary focus is building first-class network for 2G, 3G and broadband. We are migrating to an all IP network,” Go pointed out.

Digitel last year boosted the capacity of its core network by upgrading its next generation network (NGN) and transmission facilities.

Go revealed that by the end of the year, their wireless broadband network that utilizes 3G and 3.5G (HSPA) will cover the entire Metro Manila.

He also expressed confidence that while the older telco players such as Smart and Globe are bigger and more profitable, “one day we will catch up.”

He emphasized that Digitel’s growth will come from three areas, namely fixed line, cellular and broadband.

Go said he expects big growth from their broadband business. “There are still 1.5 million subscribers in the Philippines using dial-up service. There are around three to five million that own computers. The potential for broadband (both fixed and wireless) is huge,” he said.

Digitel has around 70,000 wired broadband (DSL) subscribers to date from 50,000 as of end-2007. Go said he anticipates this number to grow by 10,000 to 20,000 every month. Digitel bundles its landline and DSL package under the name BIDA.

The company’s landline business, he said, will focus on the strengthening of its broadband data service delivery through the Metro Ethernet project, with expansion in key cities in Metro Manila. Metro Ethernet will allow customers to enjoy carrier-class, high bandwidth communication access that will be integrated into their voice, video and data applications.

In 2007, Digitel engaged the challenge posed by wireless technology to fixed wireless operators by expanding asymetric DSL broadband Internet access network using a combination of asynchronous transfer mode (ATM) and Internet protocol DSL access multiplexers (IPDSLAMs) technologies. This service was relaunched under the brandname BIDA Broadband.

For the cellular business, he said with a lot of people owning two or three phones and the churn rate in the country so high, there is still a lot of room for Sun Cellular to increase its subscriber base, even without expanding the market.

Meanwhile, Digitel’s MANGO wireless landline service continues to thrive and gain market share within its geographic service areas. Officials said MANGO posted a 49 percent increase in subscriber base.