Publication Overview
This report provides a comprehensive overview of the trends and developments in the telecommunications and digital media markets in the Philippines. Subjects covered include:
· Key Statistics;
· Market and Industry Overviews;
· Regulatory Environment;
· Major Players (fixed and mobile);
· Infrastructure;
· Mobile Voice and Data Market;
· Internet, including VoIP and IPTV;
· Broadband (DSL, cable modem, wireless).
Researcher:- Peter Evans
Current publication date:- September 2009 (15th Edition)
Next publication date:- October 2010
Executive Summary
Despite considerable effort over the last decade or so, the government of the Philippines, working with the country’s telecom operators, has not succeeded in its efforts to extend the basic fixed-line telephone network to reach the wider population. Fixed-line teledensity stands at less than 5%; only a little more than half of all Philippine towns and cities have a telephone service. A fixed-line teledensity of 12% by 2002 was the original target set for the government as part of its Service Area Scheme. The plan fell well short of target and since then fixed-line penetration has remained relatively static.
The country’s mobile market has been a totally different story. No doubt contributing to the problems experienced in the fixed-line sector, the Philippines has witnessed a strong focus on and a rapid take-up of mobile services. Mobile penetration has grown quickly to reach the significant 80% milestone, 73 million subscribers by early 2009, up from just 6 million in 2000.
The continued growth has confounded the market; there have been times when the mobile sector in the Philippines looked to have reached a plateau, but then it found a new way to grow. Of particular note in this mobile market has been the remarkably high national usage of SMS. The country is ranked number one globally in SMS usage. The other chief characteristic is the high level of prepaid users (more than 95%). The mobile phone has certainly captured the imagination of the population; not surprisingly, mobiles have well and truly overwhelmed fixed-line services.
A large proportion of the recent growth in mobiles has also been coming from outside the main city of Manila, with the big operators, Globe and Smart, vigorously competing for lower income segments of the population by offering a range of cheap prepaid products. And whilst the big two operators battle it out, the third ranked operator, Digitel, has been quietly building up its own subscriber base and grabbing market share.
Further growth in the mobile market will depend on the pricing and marketing strategies of the operators, and, most importantly in the wake of the 2008 global downturn, the growth level in the Philippine economy. The view is that growth will ease over the next year or two. There is also a lot of interest in the take up rate for embryonic 3G services.
The country has been lagging badly in its roll-out of Internet and broadband services. The year 2006 saw what was looking like the start of a significant surge in broadband subscriber numbers. This continued through 2007/08 and was looking to maintain the momentum in 2009. Despite the fresh new round of growth, overall broadband penetration remains relatively low; there were only two broadband services for every 100 people in the country early in 2009.
The Philippine telecom and IT market continues to reflect considerable optimism despite the vicissitudes of the local market and the questions hanging over the global economy; significantly, the sector has been contributing more than 10% to the country’s GDP, having obviously been given a massive boost by the mobile segment over the last decade.
Key highlights
· The mobile market in the Philippines managed to grow another 26% in 2008, on top of more than 20% in 2007;
· The growth in mobile subscribers into 2009 continued despite speculation that the market was saturating;
· Mobile penetration had reached almost 80% (72 million subscribers) by March 2009;
· Filipinos were reported to be sending 1.39 billion SMS messages every day in 2008;
· Broadband Internet access in the Philippines is finally growing with the country having experienced a three year growth surge in that market segment;
· There were an estimated 1.6 million broadband subscribers by end-2008, but this still only represented 2% of the population;
· In the meantime, incumbent telco PLDT saw its total broadband subscriber base power past the one million mark in early 2009;
· Rival operator Globe launched a 2.5Ghz WiMAX service, also in early 2009;
· Growth in the fixed-line market remains sluggish; fixed teledensity stands at less than 5% with the numbers only likely to edge up slightly in the short term;
· The Philippine telecom sector continues to be an important element in the local economy, contributing over 10% to the country’s GDP.
Philippines – key telecom parameters – 2008 - 2009
|
Category
|
2008
|
2009 (e)
|
|
Fixed-line services:
|
|
· Total subscribers (million)
|
3.9
|
4.1
|
|
· Annual change
|
-2%
|
4%
|
|
· Fixed-line penetration (population)
|
4.4%
|
4.5%
|
|
· Fixed-line penetration (household)
|
19%
|
19%
|
|
Internet:
|
|
· Total subscribers1 (million)
|
5.8
|
6.2
|
|
· Annual change
|
8%
|
7%
|
|
· Internet subscriber penetration (population)
|
6%
|
7%
|
|
· Internet subscriber penetration (household)
|
25%
|
28%
|
|
Mobile services:
|
|
· Total subscribers (million)
|
68.2
|
80.0
|
|
· Annual change
|
26%
|
17%
|
|
· Mobile penetration (population)
|
76%
|
84%
|
(Source: BuddeComm)
Note: 1Estimates for both 2008 and 2009.
Data in this report is the latest available at the time of preparation and may not be for the current year.
