Are the days of small telcos numbered?

I came across this BBC news that Intel is backing Wireless Africa Plan. Wireless Internet and telephony? Yes, I agree this is the most feasible technology for remote areas. Being a pioneer of the Phil-German Rural Telecommunication Network project, I cannot help but worry about the future of the telephone cooperative I started and the small telcos who cannot (or didn’t) keep up with the technology.

In 1994, Camiguin Telephone Cooperative (CAMTECO), started with a state-of-the-art telephone Alcatel S12 exchange. The remote subscribers that are too far from the exchange, are connected via Alcatel’s RURTEL TDMA system. It is the same system used by Telecom Eireann (now Eircom) in Killarney, Galway and Donegal (Ireland) where I underwent training in 1992. However, in 2005, the residents of Black Valley, County Kerry raised the issue of poor telephone service and non-availability of broadband service to the Irish Parliament in 2005.

Giant telecom companies catched the vision what the Internet can offer. So they dropped their expensive DSL services and bundled them in their basic voice services for less than P900/month. And I overheard that video will be bundled,too, for less than P1,000/month in the near future.

The domestic long distance traffic of small rural Local Exchange Carriers (LECs) drastically dropped due to the penetration of mobile networks. Incoming overseas calls also dropped because of email and voice/video chatting

“But how about local calls? Calling via mobile phones is more expensive than landline!”. Hmm. That’s right. But how about VoIP like Yahoo voice chat or Skype. “Too much hassle. I to need to turn on my computer, we need to set an appointment to call and I must keep it running for 24 hours so that I don’t miss any incoming call. No way!”.

That’s the common notion about VoIP. But take a look at this gadget.

Analog Telephone Adaptor

This is a analog telephone adaptor (ATA), a class of IP Phone, which I bought for only P4,500 including shipment. Just plug an analog phone(!), then your Internet connection, and get a 9~12V DC supply (from a power adaptor or battery). Bingo! Now you have a stand-alone IP phone. No computers needed. Very handy – about the size of a cigarette pack. Low power consumption,  just 5 watts, you can keep it running 24 hours 7 days!

Calling format is similar to email. You register (usually free) to a VoIP phone provider. You will be assigned a VoIP address. For SIP (Session Initiation Protocol), you address looks like 1234567@provider.com. When there is another SIP phone registered to the same provider, you just dial 1234567. To call SIP phones in another provider, you have to use an access code because you cannot dial letters with your telephone. Access numbers can be found in  SIP-Broker Network Directory. So, just like in email, you can exchange messages regardless if you have a Yahoo, Google,  or your company’s account.  If you want to get into Internet phone, here’s a guide how you can setup your own stand-alone IP phone.

What can you do with your IP phone?

For a start, you can subscribe two lines – some sort of a hotline … a perfect setup for OFWs abroad and their family in the Philippines. Just like email, give your SIP address to others – friends and relatives wherever they are – Cagayan de Oro, Cebu, Manila, USA, UK and even to your neighbor (now this is a local call!). So going back to the main issue. At P800 per month for a broadband connection, you have Internet, email, chat and unlimited free-calls worldwide. The question is – will they still keep their landlines?

Furthermore, the availability of wireless landline service like PLDT’s Landline Plus (I heard this is nationwide) is the immediate threat. Its deployment to remote areas is cheap, easy and quick because they utilize the cell sites of Smart. It has features like texting and limited mobility coverage (usually province-wide) … but there’s no broadband connection! Due to this lack of broadband capability, I guess, that this service is only an interim solution. The final VoIP setup would be a stand-alone. SIP phones are standard units – as of now available only online. In a few years, they will be sold everywhere just like cell phones! There is no need for the telcos to supply the IP phones. Now you can see that broadband connection is a direct threat to local calls, too. It all depends on the pricing of the broadband connection.

Therefore, the bottom line of small telco’s survival – it depends on their competitiveness to offer broadband Internet connection and to market value-added services. Speed of deployment is very crucial. This is no problem with private companies because they decide quickly. They have a better chance of survival. But for cooperatives, plagued with too much red tape, micro-management style (even the size of copper cable to be purchased has to be decided by the Board), lack of experienced,skilled engineering staff to turn technical assets/developments to commercial values/services, lack of marketing staff, and … politics perhaps, will surely be left in the dust and someday, all of a sudden, they wake up with no more subscribers.

About hellocamiguin

Pioneer of the Camiguin Telephone Network
This entry was posted in Opinion and tagged , , , , , , , , , . Bookmark the permalink.

3 Responses to Are the days of small telcos numbered?

  1. Rubie says:

    COOL! I MISSED MY HOMELAND:(

  2. Phil Julius Rojas says:

    Sir/Madam:

    Greetings!
    Are you residing in Camiguin? I am interested in you ideas about the Stand alone Phone. I have a brother who works in the Middle East and it is the best idea communicating with him regulary. Is it available there? Can I use it here?

    I am expecting for your reply to this letter in the above-mentioned email address.

    God bless you sir…

    Anyway, you can contact me through this number +639 10 819 2572 and 088 387 3022. The landline is not ours but we can use it. The mobile phone cannot get a regular network signal but you can send me an SMS and it can be retrieved with in the day.

    Thank you again sir,

    PHIL JULIUS ROJAS

  3. hellocamiguin says:

    phil,

    i’m residing in cebu city. re your question about VoIP connection between your brother in ME, the major factor is the availability of Internet connection of your brother. second, if the provider is NOT blocking VoIP ports.

    the best way is for your brother in ME to try first using softphone before committing to buy a VoIP phone hardware. if it works there, it will work anywhere where VoIP is open.

    if you have broadband connection in the Philippines, you can setup your own SIP phone station.

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