RP may soon become region's BPO hub

By Mary Ann LL. Reyes Updated March 22, 2009 12:00 AM

MANILA, Philippines - The Philippines’ dream to become the region’s business process outsourcing (BPO) hub may soon become a reality with the coming onstream of a $250-million new international submarine cable network that promises to provide faster and more resilient connectivity to the world.

The 6,700-kilometer, 3.2 terabit per second Tata Global Network-Intra Asia (TGN-IA) cable system offers the first and only direct route between Singapore and Japan as well as Asia’s lowest latency at 63ms. It connects not only Singapore, Hong Kong, and Japan but Vietnam and the Philippines as well and offers a unique design by bypassing earthquake zones around Taiwan.

Globe Telecom has invested $90 million in the project, mainly for the infrastructure that will connect the cable system to the Philippines, the landing station, the domestic backhaul transmission network, as well as a portion of the capacity which Globe will use not only for its own needs but for sale to its business customers, some of which are telecommunications companies.

Globe business and carrier services head Gil B. Genio said their decision to invest in this cable system is brought about by three imperatives. First is the reality that broadband penetration in the country remains low but on the upswing, with only two million of the 20 million Philippine households having broadband connection. Globe as of end-2008 had 256,000 broadband subscribers, which they expect to double this year.

Second, the offshoring and outsourcing industry, both voice and non-voice, continues to grow and require significantly higher and more diverse bandwidth. Third, broadband capacity in the country remains constrained and concentrated in one part of the Philippines, with the need to diversify into the northeastern part.

While cumulative investment in capacity since the 90s has been growing at a rate of 20 to 30 percent per annum, Genio pointed out that demand for bandwidth has been rising at a faster rate of 50 percent year on year.

He also revealed that with the cellular penetration rate now at over 70 percent, telecommunications companies are on the lookout for additional sources of revenue and that one potential lies in the fact that the Philippines still has a low broadband penetration rate.

The Philippines-Japan segment of the TGN-IA, the fourth cable landing station in the country, was completed in December 2008. It is now ready for service to provide an alternative access around Asia and a more direct route to the US offering better connections.

Globe said that this cable system when combined with Tata Global networks TIC and Pacific Cable Systems, will complete Tata Communications’ multi-terabit capability from India to Asia and onward to the US.

Globe’s investment in this submarine cable system enables the Philippines to be directly linked to Singapore, Hong Kong, Japan and Vietnam with onward connectivity to Guam and to the US mainland.

The TGN-IA cable system provides added redundancy as it is in a separate location far from all existing international cable landing stations currently in Southern Luzon, and is designed to stay away from the seismic area in Taiwan out of the Ring of Fire.

Globe chose to land the cable system in Ballesteros, Cagayan which is geographically far from the previous international cable landing stations in Batangas and Cavite. This geographical diversity protects the Philippines from the active seismic areas responsible for the Taiwan earthquake of December 2006 that cut all cables that serve much of Asia.

Genio said their investment in the system and associated support facilities has significantly increased capacity and added diversity for the country’s international connectivity. “Broadband customers, businesses big and small, and most especially the offshoring and outsourcing industry, will certainly benefit from this investment,” he noted.

He added that with this cable system now carrying traffic and serving customers, they move closer to achieving their vision of having the best connected network in the country.