ABS-CBN puts up own mobile network, buys capacity from Globe

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[/caption] The announcement caught industry observers offguard as exploratory talks between ABS-CBN and Globe all pointed to a content-sharing model and not to the network-sharing scheme that was eventually agreed upon by the two firms. Even during the press briefing at the ELJ Building in Quezon City, the media had difficulty figuring out the business model since most had anticipated a content-sharing arrangement wherein ABS-CBN content can accessed via Globe?s network. But as it turned out, ABS-CBN is actually launching a new mobile brand with its own set of services, including voice, SMS, and mobile broadband, that runs on Globe?s telecom infrastructure. The Lopez-owned TV station will be operating this new mobile network through a newly created subsidiary called ABS-CBN Convergence Inc. Carlo Katigbak, president and managing director of ABS-CBN Convergence, explained: ?Under this agreement, ABS-CBN purchases network capacity on a wholesale basis from Globe, thereby allowing us to offer traditional voice and SMS services. But in addition,we are also going to offer wireless broadband services that allow us to transmit exciting new programs to any mobile device.? Katigbak, who previously headed ABS-CBN?s Internet initiatives, said the company has come to realize that the mobile Internet is going to become one of the most important platforms for delivering content to its audiences. ?Our newest website, iwantv.com.ph, allows people to watch our TV programs online when and where they want. It is now among the most viewed sites in the Philippines, and nearly half of its visitors are using mobile devices to access it. We believe that in the same way television revolutionized the mass market’s ability to receive information and entertainment, the wireless internet will be the next most important medium for our audience.? No commercial terms were not divulged during the briefing. Globe spokesperson Yoly Crisanto said the deal is just like an ordinary business transaction in which a tenant pays rent for the use of one?s infrastructure. In this case, ABS-CBN will pay Globe a fee for utilizing the latter?s network capacity. The National Telecommunications Commission (NTC), the agency that regulates the telecoms and broadcasting industry, has yet to approve the terms of the partnership. ABS-CBN executives did not disclose the brand name of its new mobile network, which is expected to be formally launched in the second half of this year. A story at ABS-CBN.com said the broadcast firm will invest between P2 billion to P3 billion over the next three years. Under the network-sharing agreement, Globe and ABS-CBN Convergence also said they may share ?assets such as servers, towers, and switches?. As an entirely separate mobile entity, ABS-CBN?s new network will have its own SIM card that may be sold together with various gadgets in monthly plans. Globe, however, will not sell or carry the SIMs in its stores. As for the possibility of network congestion, Crisanto said Globe?s on-going modernization program has made its mobile infrastructure extremely capable to handle the traffic that will be generated by ABS-CBN?s new network. ?Once the rollout is complete, our network will even have excess capacity,? said Globe official. Crisanto said there is also no danger of cannibalization since the current subscriber base in the country is only 35 million. ?Our population is 100 million, so there?s a lot opportunities for growth for a third telco.? ]]>

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