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LUZON BYPASS INFRASTRUCTURE

EXECUTIVE SUMMARY
12 December 2017

#PartnerForChange
$30*

$22-$50*

*monthly rate
paid by
consumers
ASIA PACIFIC STATE OF INTERNET Q1 2017 Average APAC
Internet Speed $ 33.99
55.40 156.67
Mbps
Mbps $ 25.70
145.17
$ 22

SINGAPORE
Average Global 121.49

HONG KONG
Internet Speed

SOUTH KOREA
$ 38.03
30.85 69.87
Mbps $ 14.58
$ 23.71 57.03 64.32
$ 20.19 44.23

JAPAN
$ 17.73 $ 16.82 $ 56.41 37.45

NEW ZEALAND
CHINA
$ 40.96
20.74 24.43 25.52

TAIWAN
18.33 19.18
13.20 13.41 THAILAND
AUSTRALIA
VIETNAM
MALAYSIA
INDIA

SRI LANKA
INDONESIA

PHILIPPINES

Source:
www.Speedtest.net
www.Numbeo.com
Luzon straits is a popular corridor for internet connectivity

11 cables
75,640 Gbps

240,000 Gbps additional capacity is forecasted in the next 10 years.


The Luzon Strait is a
dangerous place for
submarine cables

Red lines indicate


cables destroyed in
2006 Hengchun
earthquake.
JAPAN
TOTAL AREA: 377,972 km2
POPULATION: 126M
LANDING STATIONS: 17

PHILIPPINES
TOTAL AREA: 300,000 km2
POPULATION: 105M
LANDING STATIONS: 7

SINGAPORE
TOTAL AREA: 719.1 km2
POPULATION: 6M
LANDING STATIONS: 7
“I have also ordered the
newly created DICT to
develop a national
broadband plan to Continue current economic policies
accelerate the deployment Institute tax reform
of fiber optics cables and Increase Philippine competiveness
wireless technologies to Increase infrastructure spending
improve internet speed. Promote rural productivity
Automate land titling process
WIFI access shall be Invest in human capital
provided at no charge in Promote inclusive growth
selected public places Improve social programs
including parks, Strengthen implementation of RH law

plazas, public libraries,


schools,
government hospitals, train
stations,
airports and seaports.”

President Duterte (SONA,


2016)
NATIONAL BROADBAND INFOSTRUCTURE

1 2 3
INTERNATIONAL + DOMESTIC + LAST MILE
SEGMENT SEGMENT SEGMENT
Luzon strait is a popular corridor for internet connectivity

11 cables
75,640 Gbps

240,000 Gbps additional capacity is forecasted in the next 10 years.


SOLUTION TO DRASTICALLY IMPROVE
PHILIPPINES’ INTERNET

Luzon Strait is an earthquake prone area


dangerous for submarine cables. It causes
billions of pesos of damage each year.

Luzon Bypass Infrastructure provides


international submarine cables a safe
alternative path across Luzon Strait.

In exchange, international submarine cables


provide PH government use of their cable,
initially 2,000,000 Mbps (50x increase of
current government capacity*).

*As of October 2017, total government capacity is 40,000 Mbps based on


DOST-ASTI data
LUZON BYPASS PROJECT IMPACT ON INTERNATIONAL SEGMENT

1 2 3
INTERNATIONAL + DOMESTIC + LAST MILE
SEGMENT SEGMENT SEGMENT

PROJECT SOURCE OF SUBMARINE TOTAL COST / Year


IMPACT INTERNET 1 LINK 2,000,000 Mbps 1 Quote from Hurricane Electric 3/23/17

2Quotes based on PLDT 4/6/17 and Hurricane


Local Private Telco $ 0.35 /Mbps $ 21.32 /Mbps 2 Php 26 B / Year Electric 3/23/17

3 Project implementation cost is P975M OTC


$ 0.00 /Mbps
With Luzon Bypass Infra $ 0.35 /Mbps + Php 0.53 B / Year $1 = Php 51
Php 97M O&M 3
PROJECT COMPONENT

BCDA and DICT will be responsible for the development of


the following:
Luzon Bypass Infrastructure (BCDA) – a 240 km multi-duct
cable conduit path which will connect the western (Poro
Point, La Union) and eastern (Baler, Aurora) modular
San Poro Point
information technology facilities
Fernando Camp
John Hay
Backhaul Infrastructure (DICT) – internet network between the
landing station in Poro Point, La Union and mutually agreed
location within BCDA economic zones
Baler
Last Mile Infrastructure (BCDA) – internet network within the New Clark
City
BCDA area of jurisdiction Clark
Freeport
Bataan
Technopark Bonifacio
Global City
DOMESTIC BACKBONE
Connection to
international
submarine
cable linked Connection to
TO ASIA international
Backbone with Middle Mile submarine
cable linked TO
USA

Legend:
Population per square kilometer
FRAMEWORK AGREEMENT

Signed
+
08 Dec 2016

Purpose: Outline the framework of a joint development


project which will be implemented through mutual
beneficial collaboration and sharing of resources

Framework: BCDA to assist DICT on Luzon Bypass Infrastructure’s


funding and construction. DICT to share portion of
the exchanged capacity to BCDA for its economic
zones.
LANDING PARTY AGREEMENT

Signed CABLE
+ + OWNER
15 Nov 2017

Purpose: Outline the exchange of usage of and payment


for the Luzon Bypass Infrastructure by the
submarine cable owners

Framework: Cable Owner to use a portion of the Luzon Bypass


Infrastructure, in exchange for DICT and BCDA to
use a portion of its submarine cable spectrum
(2,000,000 Mbps at the minimum).
FIRST CABLE TO USE LUZON BYPASS INFRASTRUCTURE

Notable Features
• Highest capacity transpacific cable in the history
• First direct connection from HK to US (12,800km)
• Backed by world’s best technology companies
How much is 2,000,000 Mbps? e-Healthcare

e-Education

2,000,000
PLDT DICT / BCDA Mbps
1,100,000 Mbps 2,000,000 Mbps

PLDT self-reported DICT/BCDA initial


total international international
capacity during capacity upon
August 2015 Senate signing of the
Hearing Landing Party e-Government
Agreement

Inclusive growth
TRADED CAPACITY

Equivalent to
2,000,000 Mbps PhP 4.8B* / year
* Based on DOST-ASTI procurement of international
capacity in HK / Tokyo

CABLE OWNER BCDA DICT


Construction: PhP 6,700 M (now - 2018) Construction: PhP 975 M (now - 2018) Construction: PhP 23 M (now - 2018)
O&M: PhP 8,375 M (2019 - 2043) O&M: PhP 0 M (2019 - 2043) O&M: PhP 2,438 M (2019 - 2043)
Construct, Develop, Operate, Construct and develop the Luzon Operate, Maintain and Secure the
Maintain and Secure the Submarine Bypass Infrastructure Luzon Bypass Infrastructure
Cable System (with other system
owners)
MILESTONES

FRAMEWORK LANDING PARTY


CONCEPT
AGREEMENT AGREEMENT

 Project Concept  OGCC Contract Review  OGCC Contract Review


 MOU signed between  OSG Contract Review  OSG Contract Review
DOST-ICTO and Cable  Framework Agreement  DBM Clearance
Owner  DOF Clearance
 Letter of Intent  GPPB Clearance
 NEDA Certificate
 Waiver of Sovereign
Immunity
 Landing Party Agreement
MILESTONES

PREPARATORY WORKS CABLE LANDING STATION (CLS)

 Bidding of the Project Fronthaul Baler, Aurora CLS


 On going survey of the 240km Poro Point, La Union CLS
Terrestrial Roadwork
 Finalization of the Detailed
Engineering Design
Construction
2018
Ready for Equipment
2019
Benefits of the Luzon Bypass Infrastructure

eGovernment eHealth eEducation eBusiness eGovernance eServices

Gov Agency Hospital School Free Public


Go Negosyo! PhilGEPS
Connecitvity Connectivity Connectivity Wi-Fi

National Telehealth Community


eClassroom BIR E-reg MOSES
Datacenter Centers eCenter

PhilHealth Next Wave Project


eLGU Tech4ed eVoting
Online Cities NOAH

CHITS Med E-NBI Traffic


PHOpenIX e-Library BaLinkBayan
Records Clearance Cameras

Public School Business TV White


NaRMIS RxBox LEAP
eLearning ePermit Space
Photo credit: National Telehealth Center
LONG TERM VISION

For every 10 people connected to the


internet, roughly 1 person gets lifted out
of poverty
Based on Deloitte research

For every 10% increase in nation’s


broadband penetration, GDP
increases by 1.34%
Based on World Bank and numerous other publications

High technology industries Land Value Capture


Photo credit: National Telehealth Center

Government can create an enabling environment by


promoting competition through sound regulation
and liberalization

The Global Technology Report 2015

Thank you

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