Includes 3 FREE quarterly updatesBMI View: The Philippine telecoms market harbours low-term growth opportunities in light of factors
such as the high percentage of prepaid subscribers and comparatively low broadband penetration rate.
At present, the overall industry has not been negatively impacted by the acquisition of Digital
Telecommunications Philippines by the Philippine Long Distance Telephone Company even though
several market segments have become a duopoly.
- Our mobile forecast has been extended to 2017; we expect 116mn subscribers, representing
110% penetration with growth tapering towards the end due to market saturation.
- Mobile solutions are envisaged to continue driving growth in the overall broadband, accounting
for the majority of the 11.207mn subscribers in 2017.
- We expect demand for fixed-line services to continue trending upwards, although we highlight
that a contraction could be due in 2017 in light of pressure from mobile services.
Key Trends And Developments
Smart Communications and Globe Telecom launched commercial LTE services in September 2012.
The former expects 5,000-10,000 subscribers by August 2013, and we expect the sector to take off only
when low-cost LTE smartphones become available.
The National Telecommunications Commission approved the joint use of telecoms spectrum by the
country's leading service providers in October 2012 to reduce the strain on their networks. BMI believes
the move will provide a temporary solution to the burning issue of poor service quality, but could raise
considerable challenges in the long term.
The Philippines was ranked 10th in BMI's Asia Pacific Telecoms
Risk/Reward Ratings with a Telecoms
Rating score of 52.2. Following a stronger than expected expansion in H112, we have revised our fullyear
GDP growth forecast for the Philippines upwards to 5.0% from 4.2%. However, with pervasive
external weaknesses set to undermine the country's previously robust trade outlook, we stress that we
continue to expect headline growth to retreat over the course of H212.