PLDT network breakdown highlights need for redundancy

BY MARIAN GRACE S. RAMOS, Reporter/BusinessWorld The major fiber break of telecommunications firm Philippine Long Distance Telephone Co. (PLDT) which affected three cities has highlighted the need for redundancy among small call centers. Last Wednesday, PLDT’s service in Ortigas Avenue, Pasig City, Quezon City and the city of Makati was disrupted by what the company called a "major fiber break." The network outage started at 10:30 a.m. At 4 p.m. Thursday, the company managed to partially restore its service. PLDT officials initially said that the outage was caused by the "wear-and-tear" of equipment. On Thursday, however, the company announced that the outage was due to damage done by construction activities along Gilmore, San Juan. PLDT said that construction crew undertaking drainage excavation accidentally cut several fiber optic cables in the area. PLDT’s Garnet-Quezon City circuits were affected resulting in traffic congestion in most areas in Ortigas, Quezon City and Makati were a huge number of the contact centers are located. At 2 p.m. Thursday, PLDT was able to fully restore the network. In a telephone interview Thursday, Callworkz Philippines, Inc. Chief Operating Officer Junie Pama said the network outage experienced by a big telecom player like PLDT adversely impacts call centers with 200 seats or less. "If the system is down, we have no business. Kahit na bayaran ka ng downtime, lugi ka pa rin (Even if the network pays you for the downtime, you still end up losing)," he said. But since having backup systems is expensive, small call center companies would rather not have them, he noted. "If I’m trying to be competitive as I can, bringing down the cost of doing business, it [redundancy] is not the most practical thing to do," Mr. Pama said. Mr. Pama said using a full suit of redundancy equipment would easily increase a call center’s operational expense by 10% to 15%, which is not a logical decision for a small player or a start-up like Callworkz. Callworkz operates a 60-seat call center. It aims to increase the number of seats to 200 by next year. "These things [downtime] do not happen all the time, it is impractical to be paying for the service the entire year without using it," he added. Marito de Jesus, chief finance officer of another start-up call center Allsetech Manila, Inc. said the company just missed the potentially adverse impact of PLDT’s network breakdown as it recently signed up with Globe for their redundancy requirement. Allsetech operates a 150-seat facility in the country and plans to expand this to 750 seats within the year. "Before Allsec, we could not afford redundancy because of the additional cost that would be incurred. It’s easily twice the amount of a line that you’re not using," Mr. de Jesus said. Mr. de Jesus referred to Kingdom Builders, Inc. (KBI), a 150-seat local call center that was acquired by the India-based Allsec Technologies Ltd. last October. In a phone interview Thursday, Contact Center Association of the Philippines (CCAP) Executive Director Jojo J. Uligan said the incident showed the significance of being fully redundant. "Since they [PLDT] are the biggest [telecommunications firm] in terms of network, I assume they have the most clients, but one cannot entirely rely on one infrastructure," Mr. Uligan told said in a phone interview. Mr. Uligan said if a call center operator is seriously considering to participate in the industry competitively, a sizeable investment should be allotted for a back-up service provider. "It [redundancy] is a requirement by the customers nowadays and is part of their due diligence," he said, adding that luckily for the smaller players, the downtime happened in the morning. Call centers operate most heavily in the evenings, when it is daytime in the US, the country’s biggest market. Bayan Telecommunications Vice-President Abrigo M. Merin also said the cost of redundancy should not be a big issue for call centers, even for small ones. "There’s now bandwidth on demand wherein they will pay a minimum bandwidth that could automatically be increased [in capacity] in disaster mode," Mr. Merin said. Mr. Merin added that business process outsourcing operators should also choose a potential facility wisely. A location should be network neutral, meaning a location should not be exclusive for a particular telecommunications firm, he added. Big contact centers, which have backup systems in place, said they did not feel the downtime caused by the disruption in PLDT’s network. For call centers with redundancy, traffic is automatically diverted to the available infrastructure when the main system bogs down, hence no interference is felt. "We did not encounter a single problem. It was business as usual primarily because of our double redundant system," a top executive of a 11,000-seat call center said. The call center official said although most of the firm’s business is supported by PLDT, operations are also backed up by the networks of the Ayala’s Globe Telecom, Inc. and Lopez-owned Bayan Telecommunications. Mediaquest Holdings, Inc., owned by the Beneficial Trust Fund of PLDT, has a minority stake in BusinessWorld.