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Philippines - Telecoms, Mobile, Broadband and Forecasts

Philippines telecoms market: Mobile subscribers increasing, but at slower pace

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2014-04-28 12:38:01 - Philippines - Telecoms, Mobile, Broadband and Forecasts - a new market research report on

Growth in the mobile segment of the Philippines telecom market has been moderating after years of strong exapnsion. Initially the slowing in the market was partly due to a general downturn in the Philippine economy; however, even as the economy picked up, it became obvious that mobile subscriber numbers were continuing to increase but at a generally slower pace.

Mobile revenue growth also down in what has for many years been a highly competitive market. Into 2013 the Philippines had over 100 million mobile subscribers. Penetration, having eased past the 100% milestone, had moved to 112% by March 2013. Ongoing annual subscriber growth of between 5% and 10% looked likely.

Clearly the economy will be an important factor in the continued expansion



of the Philippine telecom sector. Earlier on, the recession in the US, its main trading partner, had hit exports hard but the country seemed to have generally overcome this setback. Following the big ´down´ year in 2009, the country´s GDP growth bounced back up again in 2010 reaching almost 8% (even exceeding the 31-year high of 7.3% in 2007). It then fell back to under 4% in 2011. The IMF estimated growth of almost 7% in 2012. Annual growth in the range 5%-6% looked likely to occur in the short term at least.

Despite mobile subscriber expansion easing, the operators were continuing to talk positively about the market´s potential. Importantly, it was the mobile segment that remained central to the wider development of the country´s telecom sector. Although the sector was facing challenges there was clearly some energy remaining in it as the major operators rolled out their 3G mobile offerings and looked for improved revenue streams. In 2012 there was also the initial launching of 4G/LTE services by both PLDT´s Smart and Globe Telecom, reflecting a general optimism in the wider telecom market.

In the meantime the most encouraging news has been the increased interest in broadband services, with the major players in the local telecom market starting to invest heavily in the expansion of broadband access and looking at both wired and wireless broadband platforms to provide coverage. The demand for faster internet access was increasing rapidly in 2012 and into 2013. Around 80% of all internet connections were already broadband. Overall broadband penetration remained relatively low, however, with only around seven broadband services for every 100 people in the country by the start of 2012. A surge in the sale of smartphones and tablets suggested increasing demand ahead for mobile data services.

The country´s fixed-line subscriber penetration has remained essentially stagnant, even suffering decline at times. It has certainly been a long period of difficulties for the fixed-line operators. Despite the concerted effort of both the government and the operators to expand the national fixed network, fixed-line teledensity stood at just 4% in 2012; only a little more than half of all Philippine towns and cities had a basic fixed telephone service by that stage.

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