Olongapo Telecom & Information Technology

Friday, July 13, 2007

Top Internet problems in RP: downtime, delayed resolution

Just like the potholes that mark its road network, the country’s line to the information superhighway is also not a paved one. In fact, network downtime occurs 1 to 3 times a month and would normally take up to four hours per month to restore it.

In a study presented by Internet service provider Pacific Internet Philippines (PacNet), it found that Internet downtime in the country is experienced by 78 percent of the population. Most of the time (53 percent), customers are not satisfied with the long resolution period.

"The truth of the matter is that Internet downtime is a very real occurrence here. A business that relies on constant connectivity cannot possibly survive in this type of environment," Jojie Yap, president and CEO of PacNet, said during a recent press briefing.

Yap, a former president of PISO (Philippine Internet Service Providers) and a vocal critic of "monopolistic" practices of large telecom carriers, said the brunt of taking customers’ complain and negotiating with the telcos usually fall on their shoulders as an ISP.

When downtime happens it normally takes constant and long follow-ups with the carriers. This is something, she said haft-jokingly, that their company’s principals in Singapore don’t quite understand.

But being the only telconeutral ISP by geographic reach in the region, it can offer back-up connectivity for data, voice, to corporate business and consumer customers, Yap pointed out.

This is precisely what PacNet is doing, she said, with its new solution called Optimaxx, which is a suite of services aimed at ensuring network availability for customers running mission-critical applications to spare them of incurring business losses.

PacNet product manager William Cabelin said they actually launched the solution in October last year but deferred its formal announcement after they were done testing its reliability. He said they now have about 20 large customers for the new service.

The Optimaxx suite, Cabelin said, comes with a multiple-telco line system inclusive of the free use of a Cisco integrated services router, network design and configuration, free installation with provision of Network Utilization Monitoring Tool, and round-theclock technical support.

As a way assuring its customers, Cabelin said PacNet is committing 99.95 percent availability of Internet services directly within its control excluding regular maintenance schedules.

Because of its initial success, executives said the locally developed solution will soon be rolled out in other countries where PacNet operates such as Singapore, Hong Kong, Australia, India, Thailand, and Malaysia.
By MELVIN G. CALIMAG - Manila Bulletin

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BayanTel wants outbound access to PLDT network

Bayan Telecommunications, Inc. wants the Philippine Long Distance Telephone Co. to allow its legitimate subscribers to make outbound calls to PLDT’s network.

“We are presently encountering inaccessibility problems when calling the PLDT network . . . outbound calls are currently blocked by PLDT,” Marvic H. Molina, BayanTel’s head for International Business and Carriers Markets, said in a letter to the National Telecommunications Commission.

Molina said the blocking was initiated by PLDT owing to the presence of monitored ISR (international simple resale) or bypass traffic from certain BayanTel local exchange carrier (LEC) numbers.

ISR is a method of routing and completing international long-distance calls using lines, cables, antennae, and/or air wave frequency which connect directly to the local or domestic exchange facilities of the country where the call is destined.

Molina said PLDT started monitoring ISR activities in March and noticed the number of fraud incidences have increased to 251. “The reason being we have encountered a new type of fraud that our existing antifraud machines and capabilities are not yet prepared to address. The fraud originated from certain cloned units of our CDMA [code division multiple access] phone sets,” she added.

Molina, however, explained that BayanTel stopped the sale of this particular device and initiated enhancements in the security features of all units in the market.

She said BayanTel’s issue with PLDT is that it is blocking the latter’s entire office codes instead of specific suspected numbers. “This is uncalled for and goes against the prescribed procedure agreed upon by the parties in addressing these activities. More importantly, it extremely affects thousands of our legitimate LEC and corporate legitimate numbers,” Molina explained.

In 2005, BayanTel has a total of 227,075 subscribers, or a 6.74-percent market shares. While PLDT has 2.043 million users with a market shares of 60.70 percent.
--Darwin G. Amojelar - Manila Times

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Questions hound national broadband network project

By Erwin Oliva - INQUIRER.net
MANILA, Philippines -- Controversy continues to hound the multi-billion-peso National Broadband Network (NBN) project of the Department of Transportation and Communication (DoTC).

The DoTC is pushing the network as a means to cut government spending in telecommunications, which is estimated to be worth about P4 billion every year. The agency estimates that government can save around P3.6 billion in communications expense if this project pushes through.

Discussions on the NBN project started back in 2005, said DoTC Assistant Secretary Lorenzo Formoso who also holds a concurrent position as commissioner of the Commission on Information and Communications Technology (CICT).

A policy-making body also directed to "establish and administer comprehensive and integrated programs in information and communications technology," the CICT started brainstorming on the NBN for government.

This ambitious project aims create an intranet or an "internal" network for government institutions, as mandated under the Electronic Commerce Act of 2000, and other policies that followed.

Under the Electronic Commerce Act of 2000, government is mandated to "install an electronic network" to facilitate transactions between government agencies from the national down to the local level. This government network is seen to reduce government's expenses on information and communications technologies, the law said.

The law also mandates the establishment of a web-based government portal, and a "domestic Internet exchange system" to help communications and electronic transactions between government agencies, and eventually to the public.

The CICT is specifically required to create and implement "an integrated government information and communications infrastructure development program" that would coordinate all existing government programs.

The Department of Science and Technology's Preginet (Philippine Research, Education and Government Information Network) is currently one of biggest government networks established, said Tim Diaz de Rivera, CICT commissioner and in-charge of e-government projects.

NBN project takes shape

In 2005, the CICT was appointed in charge of restructuring two government agencies: the National Computer Center and the Telecommunications Office (Telof), which was placed under the supervision of the CICT.

The CICT set up an information infrastructure group and mandated former Telof head Frank Perez to oversee implementation of the NBN project.

Perez eventually resigned and Formoso took over as head, while holding on to his concurrent position at the CICT.

On July 2006, ZTE Corp. signed a memorandum of understanding (MOU) with Department of Trade Industry (DTI) Secretary Peter Favila, Formoso said. Under this MOU, ZTE agreed to bring in investments in the Philippines through various projects including one on telecommunications, said Formoso.

In a separate interview, National Economic Development Authority (NEDA) Director General Romulo Neri confirmed this MOU between the trade department and ZTE, but stressed that it was more "exploratory."

By August 2006, the ZTE submitted a proposal to the CICT to help set up an NBN. Formoso said that ZTE proposal indicated that the People's Republic of China will finance the project through a "concessional loan."

The CICT eventually endorsed ZTE's proposal to the NEDA sometime October 2006, Formoso continued.

The staff at the NEDA Infrastructure Development Division, where the project had been assigned for evaluation, confirmed this endorsement from the CICT. But they said the proposal did not indicate if the proposal came from ZTE. The proposal indicated a generic NBN project.

"It could have been from ZTE. NEDA does not evaluate suppliers for projects," Neri stressed. Asked if the DoTC-endorsed project proposed a build-to-operate scheme, the Socio-Economic Planning secretary said it was among the options considered.

On December 2006, Formoso said that a Chinese ambassador announced the Chinese government had agreed to finance the country's NBN project and had chosen ZTE as the major contractor and supplier. On that same month, the Amsterdam Holdings Inc. said that it submitted its own unsolicited proposal to the DoTC that involved a build-to-operate scheme, Marinelle O'Santos, legal counsel for AHI, told INQUIRER.net in a separate interview.

By December 5, 2006, the lawyer revealed that ZTE had also sent a counter-proposal to AHI suggesting that the holdings firm should adopt its NBN proposal, O'Santos said. AHI had sent a request for information to Chinese suppliers Huawei and ZTE as early as September 2006. Huawei quickly responded on September, while ZTE asked for an extension.

In a timeline it prepared, AHI showed that DoTC had set February as the deadline for submission of unsolicited proposals for the NBN project.

Return of Telof

On February 2007, the Palace announced that it was moving Telof back to the DoTC, which originally oversaw its mandate. In an interview, Formoso said the government is planning to transform Telof into a government broadband service provider.

According to the NEDA Infrastructure Development Division's records, the DoTC-CICT reported the result of the evaluation done by the Bids and Awards Committee for Information and Communications Technology (BAC-ICT) commissioned by the DoTC, in response to the February 13 instruction of President Gloria Macapagal-Arroyo.

NEDA said that the BAC-ICT recommended the establishment of a 'single broadband network" that would satisfy government's requirements.

On March 23, the DoTC formally endorsed the revised proposal for the project, as it took account the BAC-ICT recommendations, NEDA added. Three days after, the NBN project was presented to the joint NEDA Investment Coordination Committee (NEDA-ICC) Technical Board and the Cabinet Committee, composed of different government agencies.

NEDA said that the NEDA-ICC deferred approval of the project and recommended DoTC to refine the proposal.

"I was there as part of the technical working group created by NEDA," said Formoso who represented the CICT.

On March 29, 2007, the NBN project was approved during the joint NEDA-ICC and NEDA Board meeting with a total project cost of about P16.5 billion.

Around April 2007, NEDA director general Romulo Neri wrote a letter to the Chinese government saying the agency was endorsing the NBN project for financing. Neri confirmed writing the letter.

On the same month, President Arroyo flew to China to witness the signing of the contract between the Philippine government and the Chinese government.

Formoso said the supply contract will only push through after "favorable [legal] opinion" from the Department of Justice is issued, and that government finally agrees to the proposed loan agreement.

Lost contract

Transportation and Communications Secretary Leandro Mendoza and ZTE Corp. Vice President Yu Yong inked the $329.5-million supply contract for a national broadband network, a statement from the Office of Press Secretary's website said.

This was the same contract that was later reported "lost" by the Department of Trade and Industry commercial attaché for China. The National Bureau of Investigation had suspected that the contract had been stolen.

"If you have an executed agreement, it is not yet effective until it fulfills the two conditions set," added Formoso who is also a lawyer.

"The issue of transparency is really a non-issue because the proposal did pass through different agencies through the NEDA-ICC," Formoso said, as he denied reports that accused the DoTC of keeping this project under wraps.

Formoso said that the DoTC had reconstituted the lost contract based on the "control copies that we had." The reconstituted contract was signed by ZTE officials and DoTC Secretary Leandro Mendoza in late May 2007, just after the NBI came out with its report on its own investigation.

A source privy to the NBN project said that any reconstituted contract should pass through the NEDA-ICC again. Neri was not available for further comment.

A staff at the NEDA Infrastructure Development Division, said that the supplier contract does not to pass through the agency until it has been finalized.

Transparency questioned

The DoTC official said proposals from Filipino company Amsterdam Holdings Inc. (AHI) and Arescom were also received.

"The Amsterdam Holdings also presented to the CICT their proposal, which came in later after we received the proposal from ZTE," Formoso said.

Formoso said that the Amsterdam proposal was later given to NEDA "but with a cautionary note that they have not disclosed who their partners were."

The NEDA Infrastructure Development Division, however, could not recall receiving any proposal from AHI, nor did it receive any NBN project proposal that follows the build-operate-transfer scheme. Under a BOT scheme, a private contractor will sets up and finance the project until a period of time when it turns over the entire operations to government.

Neri stressed that NEDA does not evaluate proposals from suppliers.

Formoso said the DoTC eventually found out that AHI only had a capitalization of P625,000, which the legal counsel of AHI had confirmed.

AHI's O'Santos, however, said that the holdings firm had increased its capitalization to P11 million.

"The Amsterdam Holdings was set up to bid for the project…but we didn't want to place all our eggs in one basket," added the lawyer who said that the company had tapped Chinese supplier Huawei to become its technical partner for this project.

Jose De Venecia III, who is chairman of Broadband Philippines, is the principal of the holdings firm, the lawyer said.

Track record

In a Powerpoint presentation on the NBN project shown to a local business community, Formoso noted that AHI failed to show any "technical capability much less a track record on IP-based telecommunications."

The DoTC executive said the AHI proposed a "predominantly mobile network with very limited coverage."

"It does not have financial resources as its paid up capital is a mere P625 thousand pesos and has no firm commitments from equity or debt investors," Formosa's presentation added.

In December 2006, Amsterdam Holdings filed an unsolicited proposal with the government to build the NBN under a Build-Own-Operate scheme. It was to be financed privately.

Formoso said that Arescom, on the other hand, proposed to use an "outdated technology" including satellite that has very limited coverage, he said. "Arescom is a wifi and DSL product manufacturer with no telecom system integration track record," he added.

The NEDA Infrastructure Development Division pointed out that the Arescom project was a Department of Interior and Local Government project that was endorsed to the agency years back. It was formerly called the Comnet 2005 project, where Arescom was the supplier.

DoTC said that a comparative evaluation of the proposals for the NBN project showed that AHI offered to do the project at $240 million, while Arescom proposed $135 million.
The ZTE's proposal cost about $329 million.

The deliverables, however, varied as AHI offered to deploy 85 base stations and 500 cell sites, while government had to buy its own cell phone units and voice over Internet Protocol (VoIP) terminals, the DoTC presentation said.

Arescom, on the other end, had to deploy 21 base stations and 83 customer premise equipment, along with a satellite central hub station, it added.


ZTE's proposal involved deploying 145 repeater stations, 30 IP-based virtual private network nodes, 300 base stations, 25,844 customer premise equipment with VoIP terminals, and the establishment of one Internet data center doubling as the Network Operating Center with back up.

The AHI lawyer, however, disclosed that the original ZTE project proposal, which the company believes to be the same proposal given to the CICT, would cost government $262 million. This was based on the counter-proposal given by the Chinese supplier to AHI in December 22, 2006 after the holdings firm requested for a proposal after it submitted its unsolicited bid to the DoTC.

AHI was later surprised when the DoTC advertisement revealed that the ZTE project cost had increased to $329 million, O'Santos said.

Showing its own side-by-side proposal analysis of the ZTE and its own, O'Santos said that AHI's cost was not too far off from ZTE's proposal. "But ours is zero cost to government," she added.

"All we ask is that the process should be followed. Why didn't the DoTC say that our proposal was not complete? They never gave us the opportunity to complete our proposal," she said.

AHI also defended its decision to offer a mobile solution to government since a Commission on Audit report shows that the bulk of government telecommunications spending is going to cellular and national direct distance calls.

"We're offering to reduce the cellular cost to government," the lawyer said.

Again, AHI's own timeline showed that ZTE had submitted its original proposal of September 6 to DoTC and requests for time for amendments on February 26, 2007.

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Monday, July 09, 2007

Davao call center boom raises manpower poaching concerns

By Judy Quiros
Mindanao Bureau

DAVAO CITY—At least three major call center companies are planning to put up facilities here, raising fears of rampant manpower poaching.

Andre Fournier, chairman of the information and communications technology committee of the Davao City Chamber of Commerce and Industry Inc. (DCCCII), said poaching was already a problem in Manila-based call centers.

Instead of strengthening competition, the entry of new players were causing the industry to stagger, he said.

Fournier said the DCCCII is working with existing call centers here to prevent the already booming industry from degenerating.

The city has five existing call centers. Two have been categorized as “big" —G-Com Ltd. and Link 2 Support.

Fournier said these two call center companies were the most apprehensive over the coming of three similarly large IT firms, which include the United States-based Sutherland Global Services.

"DCCCII's efforts formed part of its commitment to position Davao City on top of the IT environment this year," he said.

Among the efforts, Fournier said, was the drafting of a memorandum of agreement (MOA) with call center companies for the equitable distribution of call agents to thwart poaching.

"The MOA will request call center operators to work together and look at competition from a constructive point of view," Fournier said.

The MOA empowered IT schools to recommend qualified graduates to work in call centers.

The scheme would help reduce the poaching of manpower, he said.

Fournier said reasonable salaries, better workplaces and security were among the factors being considered to reduce piracy.

Teolulo Pasawa, chief of the Department of Trade and Industry in the city, said the strengthening of the peso has been pushing call centers to move out of Metro Manila.

He said the decision was also based on cheaper cost of labor in the countryside and the availability of areas accredited by the Philippine Economic Zone Authority (PEZA).

In this city, PEZA has already accredited the Damosa IT Park in Lanang.

Officials have forecast over P1 billion in earnings and 16,000 jobs by 2010 with the mushrooming of call centers here.

Joji Ilagan-Bian owner of the JIB e-Academy, a call center training facility, said the rosy forecast has prompted her to expand operation in other parts of Mindanao.

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Tougher bills filed on cellphone sale

TWO senators yesterday declared war on criminal syndicates using cellular phones in their nefarious activities.

Sen. Richard Gordon filed Senate Bill No. 289 proposing the registration of prepaid subscriber identity Module or SIM cards to trace errant users. He earlier proposed a jail term of from 12 to 29 years for cellphone snatching.

“While mobile phones have brought us speed and efficiency in our transaction, there are individuals who take advantage of these modern technology to commit crimes with greater facility. Lawless elements must not be granted the privilege of using mobile phones to achieve their crimes,” Gordon said.

Opposition Sen.Panfilo Lacson meanwhile filed Senate Bill No.191 which seeks to regulate the sale of prepaid SIM cards by requiring buyers to register information into a database the telecommunication providers will maintain.

“Not only is this pre-paid subscriber identity module card easily accessible, i.e., it can be bought almost everywhere. The owners thereof can likewise easily evade detection since prepaid SIMs are virtually undetectable,” he said, adding: “Due to this, unscrupulous individuals almost always take advantage of the same in the pursuit of their criminal activities to the detriment not only of a particular interest but that of the whole nation.”

Gordon wants every mobile company to register its subscribers — both prepaid and postpaid — and maintain a directory indicating the SIM card serial number, mobile phone number, name and address of the subscriber.

“This will promote responsibility and accountability in the use of SIM Cards in mobile phones as well as provide better law enforcement in protecting the public,” he said.

Gordon said information on SIM Card registration shall be treated as absolutely confidential, unless otherwise specified by the subscriber.

Under Gordon’s bill, every cellphone seller shall require his SIM card buyer to present valid identification with picture to ascertain his identity. The seller also requires the buyer to accomplish a registration form issued by the mobile phone company of the SIM Card being purchased.

Lacson meanwhile proposed a fine of P25,000 for first-time violators, P50,000 for the second, and P100,000 for third- time violators.

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Sunday, July 08, 2007

Setting up a call center? Think again--exec

By Erwin Oliva - INQUIRER.net

MANILA, Philippines -- A contact center business can bring in millions of dollars' worth of offshore outsourcing contracts to entrepreneurs planning to venture into this business, but a Filipino executive was quick to add that it is a risky business.

"The call center business is very capital-intensive. The business margins are high, but so is the risk," said Victor Endaya, president and chief executive officer of Advanced Contact Solutions Inc., as he reacted to he increasing tendency of local businesses to jump into the call center business bandwagon.

ACS, a Philippines-based contact center company that handles offshore projects, grew from a 500-seat contact center facility into a 7,000-seat facility, the executive said.

And yet, the company has kept its annual growth target very conservative. "We're looking at 30-percent growth every year," he added.

As the company grew, among the problems it encountered was raising additional funds to support its growth.

"This [business] is not for the faint of heart. If you only have P50 million, this is not the place for you. The barrier-to-entry is high, and so is the maintenance of operations," Endaya said.

Add to this is the pressure to hire more people, he said.

The executive pointed out that the Philippines is now the country of choice for offshore outsourcing of contact center services. But the demand is currently higher than the supply of people required to fulfill contract requirements.

The Contact Center Association of the Philippines expects the industry to generate revenues of about $8 billion in 2010.

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