4 August 2015
Dear Industry Partners,
Our project: Free Wi-Fi Internet Access in Public Places has begun implementation with several public tenders in various stages of execution, with more to come. We would like to take this opportunity to thank everyone who has participated so far, and encourage everyone to work with us to deliver this public service to the e-Filipino.
Days ago the “President’s Budget” for 2016 was submitted to Congress, and includes P1.652 billion for the project’s 2nd year. We hope that you will likewise be reassured of the strong intention of the government to see this project fully implemented and eventually institutionalized.
We are issuing this Request-For-Information (RFI) to seek your comments and suggestions on the financial aspect of the soon to be issued tenders for the Systems Management and Access (SMA) Service. The aggregate SMA Service is budgeted at P300 million for 12-month subscriptions to ISP Managed Services as shown in our latest Annual Procurement Plan (APP). Complying with law and prevailing government policy, rules and regulations, “Internet services” can only be contracted for 12 months at a time, without any advanced payments. Renewal for another year is possible without public bidding, provided that the Service Level Requirements will have been met by the provider and the mandated cost benefit analysis favors doing so. Public bidding for the third year will be mandatory however the incumbent will naturally have competitive advantages over other contenders.
In other words, the SMA Service provider may reasonably expect to provide 24 months of service, or, for illustrative purposes only, garner revenue of up to P600 million in the case of the SMA tenders.
The use of Managed Services – partnerships of the public and private sector, is desirable for many reasons. For the project, this approach is essential to meet the short term necessity, and achieve the long term goal, of ubiquitous commercial services, alongside the Free Wi-Fi public service across the country. While these might be achieved with other approaches, such are froth with traps and pitfalls as have been experienced with past projects, and would likely not be a win-win for all stakeholders. It is firmly believed to be best overall solution that will lead to a win-win for all partners since it capitalizes on the strengths of each, complementing their individual limitations.
The public service will handle up to 20 Gbps of international IP traffic and approximately 20 Gbps of domestic IP traffic, serving over 2,000,000 online users at any given time. The original SMA Service, as mentioned earlier, budgeted at P300 million per year, will be implemented as several tenders to ensure the efficient use of public funds. The first tender will be for System Levels 1 and 2, consisting of the two (2) nodes of the IP Core, and the fourteen (14) instances of the Points-of-Presence (PoPs) services. System Levels 3 and 4 shall be implemented by the other tenders, and provide the 967 Municipal PoPs and the 7,118 Site Access services. The use of carrier grade equipment and software manned by highly technical personnel on a 24 x 7 shifting schedule, will be necessary to achieve the target service quality. The SMA could thus represent a significant CAPEX/OPEX investment.
We do realize that the investment risk could be challenging for industry, and that the project in turn would be at risk of the mission-critical SMA tenders failing. As such an occurrence would be a major setback, we are seeking greater clarity by requesting for your reply to the following:
1. Will your company, possibly with partners, participate in the SMA tenders given that capital investments would be necessary, while service contracts for only 12-month of service can be issued?
2. What is the Single Largest Similar Completed Project you or your partners have done in the past five (5) years? Where “similar” generally refers to Internet Service or Telecommunications related projects.
3. What other challenges do you foresee you may encounter or issues you may have that we might mitigate if not eliminate? Please also provide a brief description of your company. Rest assured that all replies shall be treated with the appropriate confidentiality.
Finally, we request that you reply on or before 12 noon Monday, August 10 by e-mail to email@example.com. Furthermore, to ensure we do receive your valued reply, please also FAX a copy to +632 426-1525.
USEC. LOUIS NAPOLEON C. CASAMBRE