NOW Corp. to expand with Pre-5G technologies

NOW Corp. said that it will expand its services by deploying its fixed wireless broadband infrastructure in Metro Manila by using Pre-5G technologies, as part of its plans to expand its broadband Internet service in the area.

In a statement yesterday, the listed company said that the deployment of its fixed wireless broadband infrastructure in Metro Manila will use Pre-5G technologies such as millimeter wave and TDD Full Duplex for its broadband and cable TV services to enterprises such as hotels, schools, hospitals, business process outsourcing (BPO) offices, as well as to residences.

NOW Corp. has earmarked P500 million for this initiative and has projected a subscriber base of a quarter of million after five years.

“We have successfully tested two of ZTE’s latest wireless equipment with a capacity of 480 megabits per second (Mbps) and three gigabits per second (Gbps) links… They have been installed to paying customers and we shall connect current and new hubs,” Kristian Pura, head of enterprise marketing of NOW Corp. was quoted as saying in a statement.

According to the website of ZTE Corp., the Chinese telecommunications and information firm, Pre-5G technology is “a technical solution portfolio that connects 4G and 5G.” Pre-5G is based on the concept of using in advance certain key 5G technologies in 4G networks and making them compatible with existing 4G commercial terminals. This allows users to experience 5G-like results “before the formal 5G commercialization.”

Mel V. Velarde, chief executive officer of NOW Corp., said that the adoption of an All Wireless Network Plan is rooted on two global developments: The significant reduction by Google Fiber of the deployment of hard fiber optic for its network build-up in favor of fiber-like performance of aerial fixed wireless network; and use by US telecommunications firm AT&T Corp. of high-frequency millimeter waves to successfully connect enterprise clients using fiber in the air that offers 1.5Gbps broadband connectivity.

Mr. Velarde also said that the halt to deploying fiber optic in the early stages of the network build-up of the company has had positive financial effects.

“By utilizing gigabit links on fixed wireless set-up, the company sees no need to deploy fiber optic in the early stages of its network build-up. The positive economic effect is that the financial requirement of the company’s five-year business plan has been adjusted from P1.5 billion to P500 million. The company, however, is prepared to scale upwards its All Wireless Network Plan as when the need arises,” Mr. Velarde was quoted as saying in a statement.

Mr. Velarde also said that the fixed wireless broadband rollout under the All Wireless Network Plan would no longer require capital spending of as much as P1.5 billion but will instead require capital expenditure (capex) of just P500 million for the broadband rollout.

“In the early stages of our network buildup for the delivery of broadband technology, we don’t need to dig for hard fiber deployment, which is very expensive. We will be utilizing tested wireless technology that delivers millimeter-wave wireless gigabit links direct to customers’ rooftops,” Mr. Velarde said.

The lowering of capex is one of the reasons behind a move, already approved by the board, to modify its application for a 15-million share preferred offering with 30 million warrants to five million preferred shares and 30 million warrants, thus lowering the expected proceeds from P1.5 billion to P500 million.

Security Bank Capital has been appointed by the company as a financial advisor with on-going initiatives in bringing institutional investors into NOW Corp. The Board then gave management the flexibility to use various financial instruments, such as private placement of strategic partners in cooperation with foreign and local institutions.

The board has also approved the continuation by the management of on-going initiatives propelled by the underwriter of the company and by other investment houses for the underwriting of the issuance of P500 million worth of preferred shares with warrants.

Shares of NOW Corp. were up 1.77% or P0.04 to close at P 2.30.