Google internet balloon spinoff Loon still looking for its wings, faces crucial test

July 4, 2019 | 12:01 am

SAN FRANCISCO — Google’s bet on balloons to deliver cell service soon faces a crucial test amid doubts about the viability of the technology by some potential customers.

The company behind the effort, Loon says its balloons will reach Kenya in the coming weeks for its first commercial trial. The test with Telkom Kenya, the nation’s No. 3 carrier, will let mountain villagers buy 4G service at market-rate prices for an undefined period. Kenya’s aviation authority said its final approval would be signed this month.

Hatched in 2011, Loon aims to bring connectivity to remote parts of the world by floating solar-powered networking gear over areas where cell towers would be too expensive to build.

Its tennis-court-sized helium balloons have demonstrated utility. Over the last three years, Loon successfully let wireless carriers in Peru and Puerto Rico use balloons for free to supplant cell phone towers downed by natural disasters.

Kenyan officials are enthusiastic as they try to bring more citizens online.

But executives at five other wireless carriers courted by Loon across four continents told Reuters that Loon is not a fit currently, and may never be. Those companies, including Telkom Indonesia, Vodafone New Zealand and French giant Orange SA say Loon must demonstrate its technology is reliable, safe and profitable for carriers.

Hervé Suquet, chief technology and information officer for Orange Middle East and Africa, said Loon needs to prove itself in Kenya.

“If the results are positive, we would then be potentially interested,” he said in a statement.

Kuwait-based carrier Zain Group said it, too, is watching the Kenyan trial closely.

Stakes are high for Google’s parent Alphabet Inc. It has touted a few small subsidiaries, including Loon, as being crucial to its next act: diversifying beyond ad sales. But its self-described “other bets,” such as self-driving car company Waymo, generate 0.4% of revenue.

Another cloud is a lawsuit alleging Google swiped a competitor’s balloon ideas in 2008. A trial in federal court is slated to begin Aug. 2 in San Jose, California. If it loses, Loon would pay jury-determined damages to Chandler, Arizona-based Space Data, which sells communications balloons to the US military.

Loon said it will “vigorously defend” itself.

Alastair Westgarth, chief executive of the Alphabet subsidiary officially formed last July, expressed confidence in its strategy. “Multiple” additional entities are close to signing contracts with Loon, he said. The company’s workforce has tripled to over 200 employees in the last year.

Loon also attracted outside funding. An arm of Japanese telecoms firm SoftBank Corp. developing internet drones invested $125 million as part of a partnership this year. It has accelerated Loon’s previously unreported interest in industrial applications, such as serving farms and off-shore oil wells.

“With years of technical development, over 35 million kilometers flown, and hundreds of thousands of people connected, we have a big head start and are well positioned to connect a lot of people and seize the opportunities that come with it,” Westgarth said in a statement.

INDUSTRY FLIGHT
Loon decided to partner with carriers, three former Google executives said, after finding that operating its own network risked blowback from telecom companies, shareholders and activists wary of Google’s influence. It aims to levy a fixed subscription charge based on the size of the coverage area, plus fees linked to data usage.

But some prospective telecoms clients have balked, preferring to pay based on the number of subscribers, according to one of the carrier executives and one of the former Google executives.

Others are wary of technical limitations. A virtual chain of six balloons can supply 4G to thousands of devices over an area nearly as large as Puerto Rico.

But users can lose connections if winds push balloons astray. Their solar-powered gear needs abundant year-round sunshine, leaving chunks of the United States, Europe, China and southernmost South America and Africa off limits. And using balloons too close to cities could jam other communications.

In addition, the balloons each cost tens of thousands of dollars and must be replaced every five months as their plastic shells degrade.

Loon declined to comment on costs, but said it is continuing to improve coverage and longevity.

STUMBLE IN INDONESIA
The company also has faced political and cultural headwinds.

In 2015, it invited officials from Indonesia to Google’s headquarters to announce trials in the world’s fourth most populous country. Its 268 million people are spread over thousands of islands, making traditional coverage challenging.

But four years on, Loon is still awaiting final approval to test there.

It stumbled early by serving pork sandwiches to its Muslim guests during the 2015 Silicon Valley visit, according to a person familiar with the proceedings. Loon said it accommodated dietary restrictions and scheduled prayer time for guests.

Back in Indonesia, rumors swirled online and in government that the balloons held surveillance cameras, which the company denied. Indonesian authorities in 2016 probed Google for alleged tax evasion, eventually agreeing to an undisclosed settlement.

But the damage was done. Loon staff that year canceled an Indonesian trip over concerns about rising anti-Google sentiment, according to two people familiar with the plans.

“To lobby, you have to be there to bow and respect,” one of the people said. Loon “could have pushed much more.”

Loon said it holds frequent talks with Indonesian authorities and that last month they issued preliminary clearance. The nation’s Ministry of Defense must still perform security inspections, including checking for cameras, an Indonesian official told Reuters.

Meanwhile, Telkom Indonesia, the nation’ No. 1 carrier, is focusing on satellites to expand coverage, David Bangun, a top executive, told Reuters.

Madrid-based Telefonica, which declined to comment but has held deal talks with Loon for years, has tested alternatives such as relying on solar power to reduce the costs of remote towers.

Another Latin American carrier, whose operations are vulnerable to storms, said it found an alternative for disaster resilience: It will fortify its cell towers. — Reuters

Globe Telecom partners with Aboitiz for common towers

July 4, 2019 | 12:01 am

THE government aims to put up 50,000 shareable cell sites in the next seven to 10 years. — *GLOBE*

GLOBE Telecom, Inc. has secured its second deal to order shareable telecommunications infrastructure from the tandem of Aboitiz InfraCapital, Inc. and Frontier Tower Associates Philippines (FTAP).

In a joint statement, Globe, Aboitiz InfraCapital and FTAP said they signed a memorandum of understanding (MoU) Tuesday to roll out common towers in the regions of Cebu, Davao and Olongapo.

“The MoU, in support of the common tower initiatives of the Department of Information and Communications Technology (DICT), will explore the possibility of leasing build-to-suit sites, towers, and other passive telecommunications infrastructure and facilities,” it said.

The number of towers to be built by Aboitiz and FTAP is still under discussion. These will be leasable not only to Globe but also to other mobile network operators like PLDT, Inc. and incoming player Mislatel consortium.

After inking the MoU with Globe, Aboitiz and FTAP are expected to sign a memorandum of agreement with the DICT to formalize the government’s assistance to the tower providers in securing regulatory permits for the rollout.

Aboitiz InfraCapital said its experience in putting up and operating several provincial utility networks handled by Aboitiz Power Corp. will be instrumental in its success in the passive telecommunications infrastructure industry.

“Our partnership with Globe represents a significant first step in our effort to ramp up the country’s connectivity through infrastructure,” Aboitiz InfraCapital Chief Operating Officer Cosette V. Canilao said in the statement.

FTAP’s experience as a member of the Frontier Tower Associates Group (FTA), an international tower operator and service provider, is likewise seen to help in “(facilitating) comprehensive and rapid development of infrastructure.”

Aboitiz InfraCapital and FTAP signed last month a cooperation agreement to develop, construct, operate and maintain a shareable tower network across the country.

Globe has already signed an MoU with ISOC Infrastructure, Inc. and Malaysia-based edotco Group Sdn. Bhd. to build 150 shareable cell sites in the provinces of Cavite, Laguna, Batangas, Rizal and Quezon (Calabarzon).

“Tower sharing is a means to address the demand for better internet experience. Our collaboration with tower experts will enable us to fast track the construction of cell sites and towers in unserved and underserved areas as well as congested urban centers,” Globe President and Chief Executive Officer Ernest L. Cu said.

He previously said that tapping tower providers would help Globe save some of its capital expenditures to use for active telecommunications infrastructure instead.

The government aims to put up 50,000 shareable cell sites in the next seven to 10 years to improve the country’s telecommunications network by easing subscriber congestion per tower. — Denise A. Valdez

BSP releases banknotes with Diokno’s signature

July 4, 2019 | 12:01 am

THE Bangko Sentral ng Pilipinas (BSP) launched on Wednesday banknotes bearing the signature of central bank chief Benjamin E. Diokno.

The banknotes are the newest printed peso bills under the New Generation Currency series of the central bank.

The launch of the notes carrying the BSP chief’s signature also marks the central bank’s 70^th anniversary.

In his speech at the launch event, Mr. Diokno said the BSP is working on security enhancements to banknotes such as an upgraded windowed security thread with a unique color and design per denomination, anti-scanning and anti-copying features, and incorporation of tactile marks.

The newly released banknotes were printed using the intaglio technology, which is considered as a added security feature on top of embossed prints, asymmetric serial numbers, security fibers, watermarks, and see-through marks, among others.

“This means that the names and signatures therein are raised and embossed for tactile feel,” Mr. Diokno said.

Mr. Diokno became the central bank’s governor on March 6, replacing the late Governor Nestor A. Espenilla, Jr. who passed away Feb 23 after battling tongue cancer.

The local currency has borne the signatures of the President and the central bank’s governor since 1949.

Meanwhile, Mr. Diokno said that BSP Assistant Governor Francisco G. Dakila, Jr. will likely be sworn into office on Thursday to replace Diwa C. Guinigundo who retired on July 2. — RJNI

PHL in the Top 10 among world’s worst countries for workers for third year in a row

July 4, 2019 | 12:00 am

How PSEi member stocks performed — July 3, 2019

July 4, 2019 | 12:00 am

Here’s a quick glance at how PSEi stocks fared on Wednesday, July 3, 2019.

China fishing deal seen as preliminary to more talks

July 3, 2019 | 10:19 pm

CABINET Secretary Karlo Alexei B. Nograles called a 2016 verbal agreement on fishing rights at Reed Bank between President Rodrigo R. Duterte and China’s Xi Jinping a preliminary step to a more formalized deal, as members of the government aired conflicting positions on the validity of the arrangement.

Mr. Nograles also acknowledged Wednesday that the filing of impeachment charges over the fishing rights granted to China is not in itself a crime, but added that resorting to such a procedure might be interpreted as a “threat” if the prospect of impeachment is used to force President Rodrigo R. Duterte to take a certain course of action.

Speaking to media at the Palace Wednesday afternoon, Mr. Nograles said individuals who “threaten” the President with impeachment may be committing a crime.

The prospect of impeachment loomed in the wake of the South China Sea boat collision that sank a Mindoro-based fishing boat. The Chinese boat then allegedly left the 22 Filipino crew in the water without rendering assistance. It also prompted Mr. Duterte to threaten those seeking his impeachment with arrest.

The boat incident raised the question of fishing rights at Reed Bank, which is within the Philippines’ Exclusive Economic Zone (EEZ) but is claimed by China along with much of the South China Sea. The President has since claimed that he had a 2016 “verbal agreement” with Mr. Xi allowing for both countries’ fishermen to operate in the area.

The unwritten deal has elicited conflicting interpretations from members of Mr. Duterte’s Cabinet, with Foreign Affairs Secretary Teodoro L. Locsin, Jr. calling the deal unenforceable and not yet official policy, while the President’s Spokesman Salvador S. Panelo said it is binding.

Mr. Nograles noted the contradictions between the two officials’ positions but added that the verbal deal may represent “an agreement to come to an agreement.”

He said: “If there were verbal (agreements) between the two heads of state… unless formalized, written down and stated therein provision by provision the terms of reference, the terms and conditions, then this is an agreement to come to an agreement. Without the specified… provisions, then it’s just an agreement to come to an agreement. So it’s an agreement to talk, an agreement to enter into bilateral talks, an agreement to enter into communication, to clarify things, to continue bilateral meetings…”

The blowback from the boat collision raised the prospect of impeachment, which prompted Mr. Nograles to characterize the potential filing of charge as an instance of “threatening” the President to force him “to do something.”

On Monday, Mr. Panelo said in a briefing: “Kahit na verbal eh valid and binding iyon (Even if it’s verbal, the agreement is valid and binding) basta mayroong mutual consent ang dalawang partido (as long as there is mutual consent from both parties). Kaya nga agreement eh (That’s why it’s called an agreement).”

On Wednesday, Mr. Locsin said on ANC’s Headstart program: “The verbal agreement cannot be enforced on us, it’s verbal… You need a document to prove an agreement. That’s the way it is.”

Without a definitive arrangement on the matter, Mr. Nograles said the Philippines “will continue to enforce” the law to protect its right to exploit resources in the EEZ.

“We will enforce what is in the law. So if it’s for us to protect according to our fisheries code, the fisheries law, then we will enforce the law…. We will continue to protect it,” he said.

He added that agreements that amount to a treaty have “to pass through the Senate.” — Arjay L. Balinbin

DoLE hoping security of tenure bill signed by SONA

July 3, 2019 | 10:18 pm

LABOR Secretary Silvestre H. Bello III said he expressed to Malacañang his support for the Security of Tenure (SoT) Bill, which he expects to be signed before President Rodrigo R. Duterte’s State of the Nation Address (SONA) later this month.

Mr. Bello told reporters Tuesday that the SoT Bill was transmitted to the Palace on Friday. He added that on Monday, he submitted a paper on behalf of the Department of Labor and Employment (DoLE) to show the department’s support for the bill.

“I submitted a memorandum in support of the bill and it was co-signed by (Department of Trade and Industry) Secretary Ramon M. Lopez,” he said.

The SoT Bill was approved on third reading by the Senate on May 22. The House of Representatives subsequently announced that it will adopt the Senate’s version, ruling out the need for the measure to be harmonized in conference committee.

With the SoT Bill now awaiting Mr. Duterte’s signature, Mr. Bello said that he hopes the measure can be signed within the next few weeks since it will form part of the President’s SONA program on July 22.

“I hope pipirmahan niya (he will sign) as soon as possible because this will be part of his SONA,” Mr. Bello said.

During the 2018 SONA, Mr. Duterte said that giving workers security of tenure will be his next priority. Promising to put an end to the practice of “endo,” a form of employment that denies workers a path to the benefits of permanent status, was a campaign promise he made in 2016. — Gillian M. Cortez

DoLE to manage database on foreign workers; over P4B expected from POGOs

July 3, 2019 | 10:18 pm

THE DATABASE of foreign workers in the Philippines will be managed by the Department of Labor and Employment (DoLE) as the government tax machine tightened its grip on foreign workers, with the online gaming industry alone expected to generate about P4.4 billion in withholding taxes.

In a statement issued by the Department of Finance (DoF), Bureau of Internal Revenue (BIR) Commissioner Caesar R. Dulay said the tax agency is working with the Department of Labor and Employment to draft a joint memorandum circular on the issuance of work permits to foreigners that provides for setting up the database.

“To effectively pursue our mandate (of taxing foreign workers), we need accurate data on foreigners working in the Philippines,” Mr. Dulay said during a recent Executive Committee meeting.

The BIR has also sent out 29 letter-notices to Philippine Offshore Gaming Operator (POGO) service providers demanding the remittance of their workers’ withholding taxes worth P4.4 billion.

On the sidelines of the 2019 Pre-State of the Nation Address Economic and Infrastructure Forum Monday, Finance Secretary Carlos G. Dominguez III said the BIR will start to collect taxes this month from foreign workers employed by POGOs.

He said the government foregoes revenue of about P2 billion a month for every 100,000 POGO workers that do not pay tax, amounting to P24 billion a year.

“I talked to the BIR end of last week and they said they are already in position to start collections from foreign workers in the POGO industry,” Mr. Dominguez told reporters in Pasay City.

The Finance department said in a statement on April 1 that it led a task force to consolidate data on POGOs. The initial finding turned up 138,000 foreigners, with 54,241 holding alien employment permits and 83,760 holding special working permits.

The DoF estimates that foreign workers earning an average of $1,500 per month and taxed at 25% of gross income can generate P32 billion in taxes each year.

In April, BIR Deputy Commissioner Arnel SD. Guballa told reporters that an inter-agency task force including DoLE is addressing the problem of untaxed foreign workers.

“DoLE will now require foreigners, before they are given work permits, to obtain a Tax Identification Number from the BIR,” he said.

The Philippine Amusement and Gaming Corp., which regulates the POGO industry, warned the offshore gaming operators last month to “strictly comply with all the rules, regulations and directives of all other government agencies.” — Karl Angelo N. Vidal

Cagayan de Oro port’s new terminal expected to be launched July 15 — DoTr

July 3, 2019 | 10:17 pm

THE new passenger terminal building at the Port of Cagayan de Oro is set for inauguration in less than two weeks, the Department of Transportation (DoTr) said.

In a statement yesterday, the DoTr said it has scheduled for July 15 the ceremonial launch of the 5,597-square meter terminal, which Transportation Secretary Arthur P. Tugade earlier said he aims to privatize.

“The construction of this brand new building will greatly strengthen the region as the global gateway to Mindanao. Once we inaugurate this on July 15, we are opening Cagayan De Oro to the nation and to the rest of the world as we pursue progress for our seaports,” Jay Daniel R. Santiago, general manager of the Philippine Ports Authority (PPA) was quoted as saying in the statement.

In May, Mr. Tugade told reporters he plans to privatize the operations of several transportation facilities that are operational or are currently being built, specifically naming the new passenger terminal building at the Port of Cagayan de Oro.

He said then that he does not want the regulator of a facility to be its operator as well, referring to the Light Rail Transit Line 2 operated and regulated by the Light Rail Transit Authority (LRTA).

The Notice to Proceed for the construction of the passenger terminal building in the Cagayan de Oro was issued by the PPA in June 2016. The project is set to become the country’s biggest seaport passenger terminal.

The two-storey terminal will have a passenger seating capacity of 1,176 on the ground floor and a capacity of 1,221 on the second floor, enabling it to handle 3,000 passengers every day from only 1,000 in the old terminal.

The passenger terminal building will also be equipped with x-ray scanners, body scanners, security cameras, passenger boarding stations, assistance desks, green areas, a play area and a child care station.

“This is a huge step towards giving the people of Cagayan de Oro a comfortable life through enhanced connectivity, a legacy promised by President Rodrigo R. Duterte,” Mr. Tugade said in the statement. — Denise A. Valdez

Italy offers investment aid to develop Bangsamoro

July 3, 2019 | 10:17 pm

THE ITALIAN government has offered public and private assistance for the development of the Bangsamoro Region, Agriculture Secretary Emmanuel F. Piñol said.

In a social media post Wednesday, Mr. Piñol said that in a meeting with Italy’s Undersecretary for Foreign Affairs Manlio Di Stefano, the latter relayed Rome’s interest in supporting and funding program for the autonomous region.

The meeting was also attended by Italian Ambassador to the Philippines Giorgio Guglielmino and a delegation from the Italian finance industry.

Mr. Di Stefani said that the Italian government has $175 billion in its foreign investment portfolio from which to source investment in the Philippines.

“Among the areas of interest mentioned by Undersecretary Di Stefano were the development of the farming and fishery sectors, the financing and construction of rural road networks and the dredging of the Rio Grande de Mindanao… which could address perennial flooding in Central Mindanao,” Mr. Piñol said in his post.

The reduction in flooding is expected to make viable hundreds of thousands of hectares of farmland around Liguasan Marsh.

“We would like to be involved in the whole value chain of agriculture and fisheries. We will bring with us technology and corresponding funding coming from both the public and private sectors of Italy,” Mr. Di Stefano said.

The Italian government earlier offered to modernize the facilities of the National Food Authority (NFA) by building typhoon- and flood-resistant grain processing and storage facilities.

In May, the region secured a commitment of the Department of Agriculture (DA) to draft a 10-year agriculture master plan.

Tomorrow, the DA will join the Bangsamoro Autonomous Government Ministry of Agriculture, Fisheries and Agrarian Reform (MAFAR) in a workshop to prepare MAFAR’s one-year plan, due to be completed in about two months.

Mr. Piñol recently offered to resign as Agriculture Secretary is reportedly up for a transfer to the Mindanao Development Authority. His resignation has yet to be approved by the President. — Vincent Mariel P. Galang

Ocean conservation effort warrants new gov’t department, experts say

July 3, 2019 | 10:16 pm

A NEW GOVERNMENT department is needed to manage and conserve ocean resources, which is too big a job for the agriculture-focused agencies currently tasked with protecting the country’s seas, experts said.

“UPMSI (UP Marine Science Institute) was pushing for the Department Oceans and Fisheries kasi (because) … the seas are the biggest ecosystem. We think that the seas need their own department… hindi lang s’ya (it should not just be) part ng (of) agriculture. The ocean itself should be taken care of as a unit, so probably by putting more resources then we can augment ’yung kakulangan (the gap),” Deo Florence L. Onda, deputy director for research of UPMSI, said at a briefing in Quezon City on Wednesday.

Currently, the Bureau of Fisheries and Aquatic Resources (BFAR) is responsible for the development, improvement, management, and conservation of fisheries and aquatic resources.

Mr. Onda added that the creation of the department may help boost the contribution of the ocean economy to gross domestic product (GDP), which is at 7%; improve the lives of fishermen; and maximize the Philippines’ position as a center of marine biodiversity.

Gloria Estenzo Ramos, vice-president of Oceana Philippines, also concurred about the need for the new department.

“Our waters are seven times larger than our land area but why can’t we give it priority? So a department of fisheries is much needed. Other countries are doing it, why can’t we?,” she said.

“BFAR is just focused on fisheries and it’s just a bureau under the Department of Agriculture so we can see that its head doesn’t sit in the Cabinet, doesn’t have the ear on the President,” she added.

The lack of coordination among agencies involved will also be solved once the mandate for ocean management is unified in one department.

“One of the challenges is really collaboration between the involved agencies. If there’s just one department, it’s within that department whatever is needed to do,” she said. — Vincent Mariel P. Galang

Government debt rises 1.7% in May on peso weakness, bond issues

July 3, 2019 | 10:16 pm

OUTSTANDING government debt rose month-on-month in May driven by fluctuations in foreign exchange rates and an increase in foreign loans after two issues of government bonds, the Bureau of the Treasury (BTr) said.

National government debt was P7.916 trillion at the end of May, up 1.7% from the end of April and 15.8% higher year on year.

In the five months to May, overall government debt rose 8.5% from the end of 2018.

The BTr said outstanding debt grew month on month due to “net issuance of both domestic and foreign loans and foreign exchange fluctuations.”

Two-thirds of the debt stock at the end of May was held by domestic creditors at P5.256 trillion, up from P5.205 trillion a month earlier.

The BTr attributed the pickup to the issuance of government securities worth P50.95 billion, as well as to the P60-million revaluation of onshore dollar bonds due to peso’s depreciation.

At the end of May, the peso weakened to P52.222 against the dollar from P52.098 at the end of April.

In the five months to May, domestically sourced debt rose by 10% compared with the end of 2018.

On the other hand, external debt was P2.659 trillion, up 3% from a month earlier.

The rise in overseas debt was mainly due to the effect of fluctuations in both the dollar and third-currency denominated debt worth P6.14 billion and P10.09 billion, respectively. Net availment of foreign loans stood at P61.48 billion in May, up from P2.57 billion in April.

The government returned to offshore market twice in May, raising 750 million euros ($842.33 million) in eight-year global bonds, as well as 2.5 billion yuan ($363.3 million) in three-year “panda” bonds.

In the five months to May, external debt grew 5.7% from the end of 2018.

Meanwhile, guaranteed obligations totaled P486.16 billion in May, up 0.7% month on month.

“For the month, the increment in guarantees was due to the net issuance of domestic guarantees amounting to P49.72 billion and the impact of net appreciation of both USD and third-currency denominated guarantees amounting to P0.68 billion and P3.68 billion, respectively,” the BTr said.

It added this was offset by the net repayment of foreign guarantees worth P50.85 billion.

Total state guaranteed debt fell 0.3% from the end of 2018.

The government plans to borrow up to P1.189 trillion in 2019 to help finance its spending. Of this year’s total, P891.7 billion will be sourced domestically and P297.2 billion from overseas.

The Development Budget Coordination Committee adjusted the borrowing ratio in favor of domestic sources to 75-25 for 2019, from the previous year’s 65-35 ratio.

The government’s borrowing for this year is projected at 3.2% of gross domestic product. — Karl Angelo N. Vidal