Eastern Telecoms eyes P5B from Luzon fiber optic network

MANILA, Philippines – Eastern Telecommunications Philippines Inc. (Eastern Telecoms) expects a fivefold return on investment from its billion-peso, 240-kilometer fiber optic network in Southern Luzon, which is expected to serve business process outsourcing (BPO) companies that plan to set up shop in the Batangas, Cavite and Laguna areas. In a statement, Eastern Telecoms said the P1-billion network would run through several hundred economic zones and industrial parks south of Metro Manila. "[The network] will provide connectivity to more than 600 economic zones and industrial parks along the route where the backhaul will run," Edwin A. Domingo, the company’s sales and business development head, said in a statement. The company said it expected up to P5 billion in revenues in the next five years from the network, which spans Metro Manila to Batangas and cuts across Tagaytay City in Cavite. The network, which the company started laying down in September, is expected to become operational by March. Mr. Domingo said the network would also allow the company to offer higher bandwidths, which will translate into faster Internet connection speeds to local telecommunications companies that will use the facilities. "With the new infrastructure in place, greater productivity can be realized by the various economic zones and industrial parks [through] faster, better and more reliable connectivity," Eastern Telecoms said. The country’s outsourcing industry is expected to expand outside Metro Manila into the less congested provinces. In October, the Commission on Information and Communications Technology and the Business Processing Association of the Philippines (BPAP) cited Cavite and Laguna as the top two "next wave cities," or areas in the country that can best support the growth of the BPO industry. "That’s good since that is exactly what BPO companies are looking for," BPAP Chief Executive Officer Oscar R. Sañez said of Eastern Telecoms’ plan. "We need redundancy, reliability and consistency [in our networks]. As far as we are concerned, we welcome Eastern Telecoms’ [network]. I’m not saying they are the best, but they are very competitive," he added, referring to the telecommunication firms’ network quality and pricing. In a briefing in October, Eastern Telecoms said it expected to post double-digit growth in revenues in the next two years, citing the expansion of its network to support business process outsourcing companies. The company projected a net income of P120 million this year. It expects profits to grow by more than a quarter next year. Eastern Telecoms earlier said it expected 16% growth in revenues to P900 million by the end of the year. Eastern Telecoms relies heavily on corporate accounts which, unlike the consumer segment, were unlikely to cut telecommunication spending during a crisis. Around 16% of the company’s 15,000 subscriptions are from the BPO industry, which is projected to expand by around 40% annually in the next two years. The company said it expects its subscriber base to grow by 40% yearly in the next two years. Paolo Luis G. Montecillo, BusinessWorld