The GTA Data Center Ram data center is a $13 million joint venture of TeleGuam Holdings LLC which does business as GTA and Ram Telecom International for the cable landing facility and data center in Piti through Gateway Network Connections LLC, built by Pacific Rim Constructors Inc.
Guam Business Magazine file photo
Improving technology, competition drive telecom services in region
By Oyaol Ngirairikl
More than $35 million was recently poured into an FCC 2.5GHz Band auction by the island’s big three providers in the ever-expanding and ever-advancing telecommunications industry in Guam.
According to a Sept. 1 auction summary, Guam’s three providers came out as follows:
- TeleGuam Holdings LLC, dba GTA, won three licenses for $16,565,000
- Docomo Pacific Inc. won three licenses for $1,260,000
- PTI Pacifica Inc. (of which IT&E is a subsidiary) won nine licenses for $17,690,000
Those licenses allow the providers to offer increased speed for mobile users while maintaining good coverage.
And the auction represents some of the latest investments being poured into the growing infrastructure that’s supporting the telecom industry as well as other industries that rely on wireless and internet communications — from healthcare to education. There’s also been a growing number of local businesses that are allowing employees to work remotely.
In just the last decade, there’s been hundreds of millions of dollars invested into Guam’s telecom infrastructure.
Gayle
The three primary areas of investment are found in undersea cable landings, fiber connectivity and wireless infrastructure, said GTA Chief Operating Officer Andrew M. Gayle, speaking to the development on the civilian side of the gate.
Gayle said the additional licenses for GTA — one in Tinian and two in Guam — when added to their existing license allows GTA to “deploy additional wireless capacity to deliver faster speeds support more users.”
GTA is also preparing to launch 5G this year, Gayle said. “Consumers need a fast and reliable network to stay connected and over the last five years, we have seen data consumption over our wireless and wireline networks increase by about five-fold. Digital transformation has become more urgent than ever before.”
Oehlerking
IT&E CEO James I. Oehlerking said IT&E’s new licenses are “a very large investment” that will bring the company closer to its goal of providing 5G. “A big chunk of the 2.5 that we won would be a very good solution for the 5G network,” he said.
The company, now with new licenses in hand, will be adding the infrastructure needed to utilize them and he anticipates deploying the added capability at the first quarter of next year. “I think by the time we get the equipment in place and the system ready to accommodate it’ll be about then,” Oehlerking said.
Boss
Roderick Boss, president and CEO of Docomo Pacific, said his team “bought a large block of 5G spectrum nearly four years ago for a fifth of the prices paid in this auction.” This allowed the company to bring 5G service to the Marianas about a year later.
“The addition of the recent spectrum we acquired will strengthen our 5G offer in CNMI. Ultimately, competition in these critical services benefit everyone,” he said.
Boss added the prices at the FCC auction of prime 2.5 GHz spectrum “were expected to be high, but the final prices paid for these licenses reached truly stratospheric levels.”
“The revenue generated from just Guam and the CNMI represented almost 10% of the total nationwide auction revenues,” he said. “With GTA and IT&E’s acquisitions of roughly 50 MHz of spectrum each, the post-auction landscape puts three local telecom providers into roughly equal positioning with their respective deployable bandwidth.”
Currently, Docomo Pacific is the only local provider offering 5G services, though it’s limited to certain areas. The business started with a 5G Test Lab and Verification Center at the Tamuning headquarters in 2019; at the time very few, if any, other company was deploying 5G, Boss said. In 2020, the company launched 5G hotspots where customers can experience the top speeds with no additional charge. In Guam, hot spots include Ypao Beach Park, Tamuning, and Skinner Plaza, Hagatna; and in Saipan Paseo de Marianas, Garapan.
Globally the telecom industry’s estimated value is more than $1 trillion. Local providers are hesitant to put a number on Guam’s segment of that. Some estimates have the local market just below $1 billion — though the number would increase if the Department of Defense’s investments are counted.
Oehlerking did say that the local market, because of its mix of cellular, fixed wireless, landlines etc. has a “broad cross section of offerings that fall into the telecommunications information technology space, so it’s hard to quantify.”
That broad cross section points to increased capacity and demand that industry experts say may have been there already but was brought to the forefront by the COVID-19 pandemic.
Cepeda-Nelson
Laura Nelson-Cepeda, vice president of Strategic Initiatives at RTI, said Guam’s telecoms scene expanded rapidly in the last few years, and COVID-19 pushed it into the forefront. RTI is a neutral and independent submarine cable owner and operator in the Asia Pacific region.
Oehlerking said there was a 40% rise in internet and wireless usage during the COVID-19 pandemic as most schools and businesses were learning and working in virtual classrooms and offices.
Gayle and Boss both said their companies also saw a spike in utilization.
“Now the numbers have sort of settled down as we go back to ‘normal’ but it’s still not the same,” Oehlerking said.
Nelson-Cepeda said this is where investments are pertinent, as the island may not return to pre-COVID-19 usage levels.
“As technology improves, the demand for capacity will continue to increase. Guam will need to persist in improving the local infrastructure. Telemedicine, education and research, smart homes, more intelligent businesses/homes, gaming, streaming, etc. will increase the demand for capacity. The $12.8 million awarded to Guam for increased broadband infrastructure can hopefully help Guam close any digital divide,” Nelson-Cepeda said.
She’s referring to a $12.8 million Department of Commerce’s National Telecommunications and Information Administration Broadband Infrastructure Grant awarded to Guam.
“Guam finds itself in a unique position in this industry because of our strategic location and the U.S. rule of law. In the past decade, nine cables were successfully completed across the Pacific, and three landed in Guam. All three cables were led by RTI Cables. Subsea cables contribute to accelerating trade, expanding education, improving communications, and ensuring digital security,” Nelson-Cepeda said.
The providers did agree that in an ever-evolving landscape it’s important that they adapt — in a way that keeps them at the top of the curve while also ensuring they’re still able to do business.
“The telecom industry in Guam and the CNMI is a hyper-competitive one in which there are three telecom providers vying for a market share smaller than many others. Competition is a key driver behind a lot of the innovation that we do, and we must innovate … to attract the business of this very sophisticated population. Our customers want the latest devices, the best possible network quality, reliability and world-class customer service — and we strive to provide them with that,” Boss said. “In recent years, the telecom industry in this region faced many opportunities and challenges including Typhoon Yutu in 2018 and keeping our community connected during the COVID-19 global pandemic.”
He said five years from now “we are probably not aware of the kind of technology or applications” we’ll be facing, which underscores the rate at which technology is advancing and with it the evolving use.
“There will continue to be a focus on digitization with higher quality and better prices. Technology will continue to make our lives more productive and efficient. IoT (Internet of Things) will be an ever-increasing part of our everyday lives,” Boss stated. The Internet of things describes physical objects with sensors, processing ability, software, and other technologies that connect and exchange data with other devices and systems over the Internet or other communications networks.”
Oehlerking said there also will be “a level of new uses, like smart buildings, coordinating traffic flow across an entire metropolitan area, new things.”
Industry leaders added that as technology and demand evolve, so do providers.
That means, at least in part, that there’s not much room for expansion in terms of job growth. Instead, as one sector of the business slows down and another increases, the work required will have to adapt.
“I don’t see telecommunications as a growth area of the economy in Guam. I think that we’re going to be pretty stable, meaning that we’ll add jobs as we grow new areas of our business like smart homes and new areas of telecommunications. But at the same time we’re constantly having to evolve, and through efficiency we’ll actually eliminate jobs,” Boss said.
Through the evolution, there will be “some expansion and some replacement” of jobs, Oehlerking said.
Just as technology and added infrastructure allows for new innovations, the consumers’ added use of those innovations drives the need for investments in more infrastructure, improved technology and even more innovations.
“Data consumption is driving all the network investments,” Gayle said. “We added numerous wireless sites in the past five years as well as enhance and expanded the capacity of existing sites to meet customer data consumption requirements.”
GTA has continued its fiber-to-the-neighborhood initiative, delivering new technology such as fiber directly to homes in certain neighborhoods; G.FAST technology into certain multiple dwelling units; and Wireless Home Internet in hard-to-reach areas, as well as increased internet speeds with fiber to more neighborhoods.
GTA’s undersea cable and data center investments include a cable landing station in Piti, completed in 2017, and Gateway Network Connections, which was completed in 2021. GTA also is investing in a new Cable Landing Station and Data Center in Alupang, with a groundbreaking to take place this year.
“Undersea cables are vital to our global economy, so our investment allows us to build for the future,” Gayle said.
“Guam continues to be a strategic hub in the Pacific, and we are committed to adding capacity and investing in the most critical infrastructure to house more undersea cables for future growth. By investing in the facilities that support undersea cables, we continue to diversify and strengthen our footprint for strong economic growth,” he said. “With the rapid rise in content delivery and the growing demand for bandwidth, investments in undersea cables have become part of a critical infrastructure that drives the modern internet, enabling even higher amount of information and data to be sent and received across oceans. The increased demand is driven primarily from data traffic that is becoming an integral part of the everyday telecommunications infrastructure.”
The Japan/Guam/Australia cables recently announced have landed, Gayle said. JGA-North goes from Guam to Japan. JGA-South goes from Guam to Australia.
“These cables offer carriers alternate and less expensive routes to the internet, thus the cost per megabyte drops over time. This means local carriers can provide meet the growing data demands of customers at a lower cost per megabyte over time. Furthermore, several cables providing service to Guam and nearing their end of life. These newer cables offer more capacity and are expected to have a service life of 25 years,” Gayle said.
Oehlerking said the investments into infrastructure are critical.
“We can expect to see exponential growth in the telecom industry in the years to come … For schools, it will allow for a broader reach in regard to resources for advanced learning. This is similar in the workforce. The industry is already allowing for a faster way of communicating, resulting in faster and better results,” he said. “It will be great for the economy. Any industry growth is good growth. It will allow businesses to expand more and produce better and faster results.”
Nelson-Cepeda said “Guam is commercially and geopolitically important.
“Equally significant is the developing industry ecosystem surrounding Guam and CNMI. Developing public-private partnerships and guaranteeing neutral access connectivity will be beneficial to the growth of economies. A strong collaboration with governments and total transparency will be key to building capacity in the region,” she said.
Day
John Day, president and chief operating officer, Pacific Data Systems, said the trend through the years of new technology has brought greater capabilities and lower costs.
“I expect this trend to continue.” And for consumers, that means, “More new stuff for less money,” Day said.
“I think working and learning remotely will now become mainstream as a common alternative or primary way that we perform our jobs or go to school. Regarding PDS, the pandemic presented us with many challenges and opportunities. Overall the company has had some of its best financial performance in 2020 and 2021,” he said.
“We have expanded our network, added more capabilities and gotten involved in numerous projects on Guam and in other parts of the Mid Pacific.”
Being a smaller local company, PDS is inherently more agile than larger/off-island companies, which has allowed them to pivot to new opportunities, he said.
“We expect there to be many opportunities in the next one to three years that will keep us very busy and our customers happy and looking for more,” Day said.
Day said PDS didn’t receive early grants but noted that the “federal government is providing a lot of money for broadband development … and we hope to be involved with local governments in Guam and CNMI to take best advantage of these programs for their areas.”
The funds make a “huge difference in the availability of high-capacity Fiber Optic and Wireless based services in the future,” he said.
