New Market Report Now Available: Philippines Telecommunications Report Q2 2010

Posted by mobile news in mobile phones on Mar 10th, 2010 | no responses

New Fixed Networks research report from Business Monitor International is now available from Fast Market Research – With a estimated 73.544mn mobile subscribers in the Philippines market at the end of June 2009, penetration rates in the country had reached 80.5%, which was up from 76% in 2008.

In contrast 2008 reported a 12.41 percentage point increase in its penetration rate, so that growth in the sector appears to be slowing down. Indeed, during Q209, there were just 1.68mn net additions. This was significantly lower than the 3.808mn reported in the previous quarter, and compared to 3.829mn net additions in Q208. The slowdown in subscriber growth was due to Globe Telecom, which had begun to discount inactive subscribers from its base in Q209, following its 120-day rule.

This led to the operator removing 713,000 subscribers to reach 25.024mn and led to a reduced market share of 24.18%, down from 25% in the previous year. Aggressive promotional activity, and with all three major operators – Smart Communications, Globe Telecom and Sun Cellular – offering unlimited tariffs, has essentially led to a significant proportion of the market base being inactive.

By dismissing inactive subscribers from their customer bases, this allows operators to recycle old phone numbers and allows for new customers to join their networks. For the most part, new growth is being found in rural areas, where improvements in network coverage are required. That said, with rural customers subscribing to prepaid services and therefore spending less than a postpaid user, this has had a negative impact on ARPUs. According to BMI forecasts, after reporting a market average of PHP175.1 in 2008, following a decline of 13.7% in the year, we expect that 2009 will suffer a further fall of 23.4%, before reaching PHP134.1.

The growth of 3G, which would see customers access a number of non-voice applications, should surely lead to an improvement in ARPUs. However, given that prepaid growth is set to continue – accounting for 85% of the total in Q209 – we would expect to see falls in ARPU but at a slower rate so that, by 2014, the market average will be PHP97.8. There is also a growing focus on the broadband market, and in particular wireless broadband, which will allow rural communities greater access. One such application, offered over broadband, is mobile banking, with PLDT said to have over 1mn subscribers through its numerous agreements with banks. Operators are also looking to bring third party agents on board and by expanding banking through the use of third-party agents such as convenience stores. An improvement to broadband is expected to help strengthen the country’s economy, particularly as it looks to international markets, with a focus on its call centre industry.

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