PLDT launches country’s first local Internet exchange  
Promises faster access for Web surfers and e-mail users  
By Deogracias E. Ramos and Ian C. Sayson, 
The Manila Times - 5 July 1997 

The Philippine Long Distance Telephone Co. (PLDT) has launched the country’s first local Internet exchange, paving the way for a direct and faster link between Internet service providers in the country. 

PLDT said the establishment of the exchange, formally called Philippine Internet eXchange (PhIX), will mean faster access to content and exchange of information for local Internet users. 

"A local e-mail message, for instance, goes straight to its local recipient faster and easier," said PLDT. Presently, local e-mail is first routed to the US before reaching its local destination. 

PLDT first vice president Cesar Reyes said the launching of the Internet exchange would reduce by 30 percent the traffic volume on the telephone giant’s telephone network. 

 "It will optimize the performance of the ISPs and allow savings for the providers," Renato Gendrano, president of Infocom Technologies Inc., PLDT’s Internet service subsidiary. 

At present, only five ISPs have subscribed to the system: Infocom, Mosaic Communications, Worldtel Phils. Inc., Iphil Communications Network Inc. and Virtualink International Corp. Each ISP will pay
PLDT P5,000 a month for the use of the facility. The amount is expected to go down with the possible entry of other carriers into the system. 

While the establishment of the Internet exchange will lead to faster service, it’s not entirely certain, however, if it will mean lower costs for customers. The potential is there because the operation of the PLDT Internet exchange will cut costs for ISPs. Whether the ISPs will pass on the savings to customers is another matter, though. 

"We just came through a price war and I think it would be destructive for the industry to go into that again with this development," said Anthony Choy, president of Internet service provider Virtualink International Corp., of the ISPs linking up with the PLDT network. 

"There’s no stopping someone who wants to bring down the fees. But I don’t think as of this moment any of us is thinking of that," he said. 

"What we can do is provide a faster factor speed to our clients rather than cut down the service cost. If you start a price war, everybody will go back to price war and that will not be a very healthy environment for all concerned," Choy said. 

Choy also said that one immediate objective of PhIX now is to raise the membership of the exchange."There are more than 22 service providers who are waiting to come in," he said. 

There are more than 126 Internet service providers in the country but only 16 have their own leased-lines. The rest depend on leased lines of other ISPs.