Wednesday, 8 November 2017

NOW Corp.: The 3rd player in the PLDT and Globe dominated broadband industry

In a duopoly dominated  business or industry, a new player is always a welcome development.

For years the broadband business has been aggressively pursued and dominated by only two business entities- the Manny V. Pangilinan controlled-Philippine Long Distance Telephone (PLDT) Inc. and the Ayala’s Globe Telecom.

A few months back San Miguel Corporation(SMC) president Ramon S. Ang  tried to be the third telecom player in the country, it was reported that it has already began talks with Australia’s Telstra, but sadly both parties was not able to agree on the partnership that would have been a formidable challenger against the two existing mobile phone service companies. *
File photo (photo credit to PDI)

Then comes, NOW corporation. It aims to get a slice of the services being dominated by PLDT and Globe, it will be entering the massive residential broadband business as it hopes to capture a small but loyal slice of a market.

NOW president and Chief Executive Officer (CEO)  Mel Velarde told reporters in a briefing Tuesday that the company would utilize its fiber air service, which it had successfully rolled out for businesses such as banks, schools, hospitals and hotels.

The next step is homes and  CEO Velarde said there was a market for NOW’s guaranteed broadband rates.

“Families want enterprise-grade service,” he said, referring to the type of internet quality typically demanded by businesses.

Using its fiber air technology, NOW hopes to go around regulatory bottlenecks experienced by the telcos in laying down fiber cables for their broadband connections. Moreover, it can pursue a modular approach to expansion, helping mitigate upfront capital spending.

NOW has so far launched its broadband service in the upscale neighborhood of Corinthian Gardens, in Quezon City.

“This is wireless. We will be able to cover Metro Manila easily through partners,” CEO Velarde said.

With partners, NOW’s home broadband could be available across the capital district within 12 months, he said. He is also targeting to expand in Davao and Cebu City by next year.  *

NOW’s partners will help the company penetrate certain areas and, in exchange, receive a commission.

For Metro Manila, Velarde is targeting a relatively small market of 400,000 homes and small businesses in five years. Their current 100 fiber air hubs will increase to over 450.

Funding will come from a P1 billion preferred share sale, which has convertible features, which Velarde hopes to close by the first quarter of 2018.

Broadband so far accounts for 20 percent of NOW’s revenues, most of which come from its IT services arm. NOW’s IT customers include the Philippine National Bank (PNB) , the Supreme Court (SC) and the Bangko Sentral ng Pilipinas (BSP).

CEO Velarde said they hope to increase broadband to 50 percent of revenues and then 80 percent in two years. 
And we hope in the near future other telecom players will enter the Philippine market.


Report from PDI


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