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Philippine carrier outsources to Israeli firm

Country's largest carrier Smart Communications, ropes in ECI Telecom to provide network management services that include surveillance and maintenance.
Written by Melvin G. Calimag, Contributor

MANILA--Philippine mobile operator Smart Communications has announced plans to concentrate on expanding its core business by delegating the management of the company's network traffic to an Israeli equipment supplier.

ECI Telecom, which--like most Israeli technology firms--traces its roots to the military, inked a two-year managed services contract to manage Smart's nationwide transmission network.

The country's largest carrier, Smart said it chose ECI because the Israeli company is one of its network equipment vendors.

Under the deal, ECI will provide multi-vendor network management services for the operator's Network Operations Center (NOC), including surveillance, fault management and maintenance.

Company executives declined to say how much the contract was worth as ECI is a privately-held company.

In an interview Wednesday at its Philippine office, ECI's executive vice president for global sales Aviel Tenenbaum, said the company's military-grade product--both hardware and software--helped drive ECI's global expansion and US$1 billion income in 2008.

"We were the first to introduce DCME, a device that featured a voice compression technology that [enable] 21 voice calls [to be transmitted] in the same copper line," Tenenbaum said.

While ECI was founded and is currently headquartered in Israel, he noted that 95 percent of the company's clients are based outside the country--primarily from Asia, the former Soviet Union and Europe.

"Unlike other technology companies, our clients from the U.S. comprise just about 10 percent of our customer base," he said, adding that the Philippines, in particular, serves as a testbed for some of ECI's pioneering applications and services.

The Israeli executive explained that while the managed services model can prove a cost-effective measure for companies nowadays, it may not be an attractive option to businesses that prefer to retain their employees rather than outsource the work.

"For Smart, we're not replacing their workers. We're actually taking away the load of running the company's network from them, by giving technology assistance and advisory services so they can maximize their existing infrastructure and minimize their capex (capital expenditure)," Tenenbaum said.

Smart President and CEO Napoleon Nazareno said in a statement: "Having worked with ECI for many years, it made sense to partner with a proven and innovative vendor that can allow us to focus on our core business, and continue to deliver superior, wireless services to customers across the Philippines."

ECI Philippines President Rondell Cruz told ZDNet Asia the two organizations have worked together for at least five years, and added that Smart's parent company PLDT, is also an ECI customer for the last ten years.

According to Cruz, major telecommunication players in the Philippines including Globe, Bayan Telecommunications and Eastern Telecoms, are also ECI customers.

As a player in a competitive industry, Smart cannot afford to commit the mistake of "running so fast without making the right planning and approach", he said.

"That's a pitfall that they must avoid because the telecom space is very capex-intensive," he explained. "They ought to be careful in using and optimizing their existing infrastructure so that they don't need to buy new ones."

Cruz said growth prospects in the Philippines remain high, given the Filipinos' penchant for communication and the boom in real estate, fueled by remittances transacted by Overseas Filipino Workers (OFWs).

"Whenever there are properties being erected, there will always be telco requirements," he said. "For the consumer side, communicating [with one another] has always been an important part of the Filipino culture. No matter how hard life is, they take time to call or send text messages to their loved ones inside and outside of the Philippines."

Melvin G. Calimag is a freelance IT writer based in the Philippines.

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