PLDT Group, MPIC units join forces for new businesses

MANILA, Philippines - Philippine Long Distance Telephone Co. (PLDT) is working on a number of new businesses in cooperation with companies owned by Metro Pacific Investments Corp. (MPIC), as the former reinvents itself and creates new products and services outside of the traditional telecommunications space.

PLDT and Manila Electric Co. (Meralco), for instance, are evaluating the feasibility of constructing a smart grid, which can deliver electricity from suppliers to consumers using two-way digital technology to control appliances at consumers’ homes.

“This will save energy, reduce costs, and increase reliability. Through the application of more sophisticated rating to a smart meter infrastructure, consumers will be able to time their heavy usage based on the cheapest available price, or to monitor how much power the household has consumed so far in a particular month, so that electricity budget is not exceeded,” PLDT and Smart Communications chairman Manuel V. Pangilinan, who is also president and CEO of Meralco, said.

He emphasized that PLDT is uniquely positioned to enlarge its telco business by cooperating with these utilities to enhance efficiencies and profitability. “With Meralco, we’re considering prepaid electricity services, to capitalize on Smart’s wireless infrastructure and its robust prepaid billing platform. We’re testing broadband over power lines, which leverage on Meralco’s distribution infrastructure, and enhance PLDT’s broadband capability,” he added.

Faced with sweeping changes in technologies and market trends, telecommunications companies worldwide need to reinvent themselves by creating innovative products and services and collaborating with companies outside of the traditional telco space.

“Our industry has reached yet again another ‘strategic inflection point.’ This is a moment of great opportunity, and dark peril. The task of leadership must be to understand these new challenges, shape the response, and move decisively into a new world with new paradigms,” Pangilinan said in his keynote speech before 750 delegates during the 6th Asian Carriers Conference (ACC) held in Shangri-La Mactan, Cebu recently.

The PLDT Group is also looking at electronic healthcare, or utilizing telecommunications to bring sophisticated healthcare even to the most remote communities. The group owns SPi Global, a business process outsourcing (BPO) company that handles clients in the healthcare business, while sister company MPIC owns a number of hospitals, including Manila Medical Center.

“Indeed, telemedicine can help in the remote management of serious diseases such as diabetes, cardiovascular and pulmonary problems. It can keep people at home or at work, and out of hospitals,” he said

Pangilinan cited the growing collaboration between the PLDT Group and major infrastructure companies such as Meralco, Maynilad Water Services, Inc., Manila North Tollways Corp. (MNTC) and several hospitals that would capitalize on the synergies between these companies in providing innovative services.

The ACC was attended by 750 delegates representing 226 international telecommunications carriers, operators, vendors and submarine cable operators from 43 countries.

Outlining the challenges confronting telcos globally, Pangilinan said “market saturation is impeding future growth, competition is eroding margins, regulators are getting more regulatory and the new services are driving revenues higher but at lower margins.”

These challenges will be amplified, he added, as operators shift from legacy to digital, all-IP networks and as traditional services face competition from Internet-based voice services and social networking.

To respond, telcos need to create new services through partnerships of both traditional and new types.

“Cooperation is in fact becoming a well-travelled path for telcos. As the Internet became a global phenomenon, operators have learned to work with third-party service providers who actually account for the vast majority of services being offered through our networks,” Pangilinan said.

He explained that collaboration may take many new forms. In the international arena, for example, 24 carriers under the wing of the prestigious GSM Association have formed the Wholesale Applications Community (WAC), to develop common standards and come up with wireless applications that may be shared and used by WAC members’ subscribers. Smart is a member of WAC.

Telecoms carriers also need to work closely together to develop new protocols for interconnecting their networks as they migrate to all-Internet Protocol standards. Collaboration is also necessary to improve the detection of fraudulent traffic on all-IP networks, and in business intelligence, he added.