Globe Telecom undertakes massive network revamp-
Come April 2013, over 30 million subscribers of Globe Telecom – the second largest telecom operator in the Philippines– will begin to experience vastly improved call, text, and data services. To this end, Globe is undertaking a massive network upgradation and modernisation project – the Globe Network Transformation Program – entailing investment amounting to $700 million ($1 = PhP 40.56). The programme is Globe’s most significant investment in the past two decades: it is aimed at strengthening its network quality and resiliency, boosting network capacity, reducing costs, and delivering better consumer experience.
Through this project, Globe will be moving towards an all-internet protocol (IP)-based infrastructure. Besides, the upgradation will allow the company to provide pervasive 3G coverage, and make the network 4G-ready for the future. R. Tan, Chief Technical Adviser, Globe Telecom, highlights the need for the project: “The growing consumption of voice and specifically data services by Filipinos is putting pressure on operators’ networks in the country, as they are primarily geared for text-based services. As a result, there is a pressing need to provide an infrastructure that can cater to this growing demand, as well as make networks future-ready for mobile technologies such as high speed packet access (HSPA)+ and long term evolution (LTE). This prompted Globe to embark on a multi-million dollar investment that will give its subscribers the best mobile experience.”
Project background
The Globe Network Transformation Program was launched in November 2011. It is a five-year network modernisation project that will be completed under two phases. In the first phase, which is currently under implementation, all existing hardware such as power sources or generators, base stations and switches, along with cell sites, is being replaced with new technology equipment. The upgrade will make the cell sites more powerful and energy efficient so as to offer subscribers better and more reliable services. Furthermore, the company is undertaking the “greening” of its network by utilising renewable sources of energy such as solar and wind at most of its sites to run operations.
The second phase entails an information technology upgrade which will involve installation of new and modern equipment to boost mobile and data service delivery. Tan offers a more detailed description: “During this phase, 4G technologies using either HSPA+ or LTE will be activated in a specific area to give subscribers a better network experience. In addition, more resilient fibre optic cables measuring about 12,000 km will be laid in wider areas to serve more customers and greatly improve the quality of voice, text, and internet services.”
Huawei Technologies is providing the equipment for the project, while Alcatel-Lucent has been selected to lead the project management and integration.
The network modernisation programme, amounting to PhP 28.39 billion, is being funded primarily with debt. In June 2012, the company issued retail bonds worth PhP 10 billion that are tradable in the organised market via the Philippine Dealing and Exchange Corporation. It has two tranches that promise returns of 5.75 per cent and 6 per cent per annum over five years and seven years, respectively. The joint lead underwriters and bookrunners for the bond issue are BPI Capital Corporation, BDO Capital and Investment Corporation, HSBC, and RCBC Capital Corporation. The co-managers are the China Banking Corporation, First Metro Investment Corporation, Land Bank of the Philippines, Philippine Commercial Capital, Inc., and SB Capital Investment Corporation.
Key benefits
The project, when complete, will usher in several benefits for the company and its users. It will enhance Globe’s network resiliency and reduce network outages, especially during times of weather disturbances and the loss of commercial power. Further, the transformation would reduce Globe’s carbon footprint and energy consumption. It is estimated that the increased efficiencies and reduced maintenance requirements will bring substantial opex savings amounting to $170 million over the next five years.
Tan believes that the network upgrade will “significantly improve network quality and customer experience, as well as provide them with a future-proof network that is compatible with advanced technologies”. Most of these benefits will result from extension of the 3G network to their entire licence area and installation of the country’s largest 4G network that doubles the use of fibre optics to offer faster downloads and video streaming. An upgraded network and increasing focus on improving customer experience will help the operator consolidate its market position vis-à-vis its competitor, the Philippine Long Distance Telephone (PLDT) Company, the current subscriber base of which is double that of Globe.
Progress so far
Since the launch of the programme, the company has achieved some major milestones in its progress. To begin with, Globe has surpassed its initial target of completing 75 per cent of the network upgrade by end-2012, as pointed out by Tan: “In Phase I, we have transformed close to 85 per cent of our network by end-2012. We are progressively moving towards our target of completing it by the first quarter of 2013. Almost the entire Philippine archipelago has been modernised. Completion of the first phase is being undertaken in Southern Metro Manila and pocket areas in Luzon, along with some locales in the Visayas and Mindanao.”
Box 1 gives the status of the modernisation programme in various areas in the country.
Moreover, Globe has started reaping the benefits of the modernisation, even though the programme has yet to be fully implemented. The quality of service performance studies conducted by the National Telecommunications Commission (NTC) in September and December 2012 revealed that Globe Telecom has achieved marked enhancements in its grade of service vis-à-vis the previous quarters. Box 2 highlights some of the categories in which Globe’s legacy network exceeded the industry standards in its performance.
Issues and challenges
Executing an infrastructure project of such a massive scale is not an easy feat. In particular, it involves addressing several regulatory issues and deployment-related challenges. Securing approvals from multiple agencies is a time-consuming process. Globe had to seek installation approvals such as permits for right-of-way from cable entrance facilities and the local government units. Finally, the company has faced hauling restrictions in North Luzon, and security risks in Mindanao.
Further, the company had to ensure that modernisation and upgradation operations resulted in minimal disruption to existing services. In this regard, Globe has adopted an adaptive programme build-up approach and recalibrated its expansion plans regularly. Also, site-specific issues and inclement weather during the physical infrastructure roll-outs were key areas of concern.
The ambitious project is also running against time as noted by Tan: “The most important challenge is that the work involved in transforming the entire network is accomplished within a short time frame.”
Future road map
Over the years, Globe has established itself as a strong player in the Philippines telecom market. However, it has to cover a gap of 30 million-odd customers to catch up with the top operator, PLDT. Its ongoing network modernisation project is a step in the right direction. Globe has adopted a different approach from that of its competitors: instead of just upgrading its network, the company has undertaken a comprehensive overhaul of its network, from the access layer to the core.
Once complete, the project will provide Globe with a robust network that can offer unparalleled customer experience and give the company an edge over its competitors. According to Tan, “This network modernisation will provide Globe subscribers with one of the most significant advancements in mobile telecommunications technology in the Philippines and Asia.”
