Crucial telco deal signed

The government’s plan to provide high-speed and inexpensive internet to public areas around the country advanced on Friday with the signing of a crucial agreement for the use of spare fiber optic assets owned by the state.

A tripartite agreement was sealed between the Department of Information and Communications Technology (DICT), the National Transmission Corp. (Transco) and private concessionaire National Grid Corporation of the Philippines (NGCP).

The agreement unlocks 6,154 kilometers of “dark” or spare fiber lines from Luzon to Mindanao, the commercial use of which was the subject of a long-running dispute between Transco and NGCP.

These dark fiber lines are currently used by Transco and NGCP to monitor their electricity distribution points around the country.

With a deal now in place, DICT can use the fiber lines for its key initiatives such as the National Broadband Project and its goal of providing free Wi-Fi connectivity to thousands of public sites such as schools and hospitals in the next few years.

Eliseo Rio Jr., acting secretary of the DICT, said they can now reach even the most remote areas in the Philippines.

“Around 40 percent of the country is underserved or unserved by the commercial telcos,” Rio said, referring to the duopoly of PLDT Inc. and Globe Telecom, which do not see certain areas as viable enough for them to enter.

“So this is where the government should go,” Rio said.

Under the agreement, the DICT obtained an “indefeasible right” to use or access certain spare fiber optic cores, vacant lots, tower spaces and related facilities of NGCP, which is the concessionaire of Transco, the owner of the country’s power transmission assets.

The DICT estimates that its broadband project, once completed, will save around $2.6 billion in terms of manpower, time and other costs.

“This is seven years in the making. Coming to this agreement, we had a lot of arguments and disagreements, but despite all of these things, we are all here together to sign this agreement,” Melvin Matibag, Transco CEO, said on Friday.

NGCP chair Anthony Almeda was the concessionaire’s representative. NGCP’s shareholders are business groups led by Henry Sy Jr., Robert Coyiuto Jr. and State Grid Corp. of China.

Rio clarified on Friday that the signing of the tripartite agreement was not directly related to the DICT’s efforts to lure a third telco player.

“The third telco, or any telco for that matter, that would like to use the dark fiber must have another committed agreement with NGCP and Transco. It is not part of this agreement,” Rio said.

The DICT chief said the goal was also to bring down the cost of internet while bolstering coverage. He noted that the cost of bandwidth is expected to fall once the government completes its Luzon Bypass Infrastructure project.

This was part of an agreement with social media giant Facebook, which is building a massive submarine cable system that will link Los Angeles in the United States and Hong Kong.

Facebook’s cable will pass through the Luzon Bypass Infrastructure, which will have landing stations on either side of Luzon in Baler, Aurora, and in Poro Point in San Fernando, La Union.

In exchange for using its facility, which will open toward the end of 2019, the Philippine government will get 2 terabits per second (Tbps) of international bandwidth “free of charge.”