2015 Philippines - Telecoms, Mobile and Broadband

The Philippines sees the start of a big move into mobile broadband

While the telecom sector in the Philippines has witnessed considerable investment and business activity since deregulation, the market has continued to fall short of its full potential. Nevertheless, there certainly has been a lot of activity, with the market often finding a different direction from what was envisaged. The country’s mobile market has been particularly energetic for some years, for example, running on what could only be described as a genuine revolution in the development of SMS as an effective communications service. Even more significant ultimately has been the recent expansion in broadband internet. Broadband is finally building a healthy subscriber base, boosted by the considerable presence of mobile broadband services in the mix of the various platforms available. There has also been good progress in the rollout of optical fibre infrastructure, although not on the national scale envisaged. In the meantime, the larger operators are building IP-based Next Generation Networks. Whilst the global financial problems had earlier presented some real challenges for the local telecom market, the negative impact seems to have been put well behind.

By early 2015 the number of mobile telephone subscribers had grown to around 113 million, with mobile penetration of 114% in this country of almost 100 million people. The Philippines mobile market initially took off in a big way back in 2000. It did so with the help of the surprising performance of SMS in the Philippines. At its peak, around two billion SMS messages were being sent every day in the Philippines. Although this market has eased considerably, the country reportedly generates the largest SMS volume in the world. An indication of the constant change in the mobile market has been the way the Philippines SMS market has started to decline as internet-based social networks have begun to impact dramatically on SMS usage. There is a major transition taking place as faster, new generation mobile networks become the norm.

Compared with most of its Asian neighbours, the Philippines has moved slowly on the adoption of internet. Nevertheless, this situation is changing rapidly. Of the estimated 45% of the population that made up the internet-user population coming into 2015, a large proportion of these were already using a high-speed broadband connection to go online. In early 2015 available statistics suggested that more than 80% of all internet subscriptions were broadband-based, representing a major shift in the broadband presence in the Philippines in recent years. Broadband subscription penetration as a proportion of the population was still only around 9%.

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 3% in 2015; only a little more than half of all Philippine towns and cities had a basic fixed telephone service by that stage.

Key developments

• Growth in mobile subscribers in the Philippines was running at around 10% annually coming into 2015;
• Mobile penetration had reached 114% by that stage;
• Smart was leading the deployment of 4G LTE mobile services across the country, with its 4G network covering more than 85% of the population;
• Globe Telecom was also expanding its 4G LTE coverage, but was trailing Smart;
• There were over 8 million broadband subscribers in the country by early 2015; however, this still only represented around 8% population penetration;
• The fixed-line market had effectively lost direction, with no growth expected in the short term;
• Local media company ABS-CBS Corp was taking steps to become the ‘third player’ in the country’s telecom market;
• In a relatively low key launch, ABS-CBNmobile started operating as an MVNO;
• BellTel was also making a move in early 2015 to enter the Philippines mobile market and become its fourth mobile operator after PLDT, Globe and ABS-CBN Mobile;
• The Philippine telecom sector continues to be an important element in the local economy, contributing over 10% to the country’s GDP.
• Growth in GDP of between 6% and 7% per annum was forecast for the Philippines in 2015/2016;
• The country selected the ISDB-T platform for its terrestrial transmission standard;
• Revised legislation to create a new Department of Information and Communications Technology (DICT) was proceeding in early 2015.

Companies mentioned in this report include:

PLDT, Smart Communications, Talk ‘N Text (TNT), Red Mobile (CURE), Globe Telecom, Digitel, Extelcom, Bayantel, Bell Telecom (Bell Telecom), ABS-CBN Broadcasting Corporation, ABS-CBNmobile, NOW Telecom (formerly Next Mobile), Liberty Telecom/Wi-Tribe, EasyCall, Altimax, Broadband Philippines, Meridian Telekoms, Vega Telecom, MultiMedia Telephony, AZ Communications Network, MediaQuest, MediaScape, Sky Cable, Home Cable, Destiny Cable, Associated Broadcasting Corporation.