Deploying Broadband Over Powerline

Ever since Philippine Long Distance Telephone Company (PLDT), the country’s largest telecommunications entity, bought shares in Manila Electric Company (MERALCO), the largest electric power distributor in the Philippines, speculations abound that the move signals the coming of Broadband over Powerline (BPL) technology in to the country. It became more obvious when San Miguel Corporation, the country’s largest commercial conglomerate, announced its plan to enter the telecommunications business and joined the fray by also buying sizable shares of stock in MERALCO.

The confirmation of the PLDT’s plan to deploy BPL came out in a news release stating that Manila Electric Co. will soon test in Malabon City a broadband-over-powerline (BPL) project, which if proven commercially viable, is a potential new cash cow for the country’s biggest power retailer. At the same time, PLDT chair Manuel V. Pangilinan told shareholders of subsidiary Pilipino Telephone Corp. that BPL, cited as among the many synergies between Meralco and the telecom giant, would begin soon.

The PLDT group now owns 30.2 percent of MERALCO shares by virtue of Piltel’s purchase of the 20-percent stake sold by the Lopezes and the 10.2 percent owned by the PLDT Beneficial Trust Fund which it will soon sell to affiliate Metro Pacific Investments Corp. Pangilinan added that they were proven right in investing in Meralco by the fact that share prices had gone up from their purchase price of PhP90 a share to its current market price of more than PhP140 per share.

The BPL project—which can potentially provide cheaper high-speed Internet to millions of households—was believed to be the PLDT group’s biggest motivation in buying into Meralco especially because another powerful voting block that had come in much earlier, San Miguel Corporation was also keen on entering the highly competitive telecommunications business. The pilot test to be conducted in Malabon City will take two to three months and expected to start this August.

How will the deployment of broadband over powerline affect the Internet cafe business remains to be seen? If BPL proves to be a reliable way of accessing the Internet and the price will be more affordable than the current services being offered by telecommunication companies then we can expect a more competitive atmosphere in the industry. What do you say?