Philippines Telecommunications Industry Update Quarter 1 2012

  • November 2013
  • -
  • Business Monitor International
  • -
  • 110 pages

BMI’s Q112 report on the Philippines telecommunications industry provides a comprehensive overview of the latest developments n the country’s mobile, fixed-line telephony and internet segments . During this quarter, our five-year growth projections for these different segments extended through to the end of 2016. Otherwise, we have kept our projections largely unchanged, with the latest operator data appearing to confirm expected trends.
BMI’s analysis and projections for the Philippines’ mobile telephony segment is based on data published by the Philippine Long Distance Telephone Firms (PLDT), Globe Telecom and Digital Telecommunications Philippines (Digitel). By the end of June 2011 there were almost 91.3mn mobile subscribers in the Philippines, up from just over 86mn at the end of 2010 and 84.17mn in June 2010. The market added over 3.23mn mobile subscribers in the three months to June 2011, making Q211 by far the strongest quarter for growth since Q210. Despite the strong growth in Q211, we maintain our belief that the industry is approaching saturation point. As the industry becomes more saturated, the operators will be compelled to focus more on the postpaid sector .
Our mobile subscriber projection for the Philippines expects average annual growth of 4.4% in the five years to the end of 2016. We projection the industry to grow to over 117mn mobile subscribers at the end of 2016; this would be equivalent to a mobile penetration rate of almost 114%.
In August 2011 a Philippines’ Senate committee approved PLDT’s plan to take over a majority stake in rival operator Digitel for around PHP70bn, saying the agreement was ‘consistent with its legislative franchise and in the interest of the public’. In a 12-page report, the committee concluded that the merger constitutes part of the normal course of action between two businesses in the local telecoms market . Further, concerning the issue that the PLDT-Digitel merger breaches local laws on monopolies and cartels, the report found that ‘there is effectively no comprehensive anti-trust legislation in the Philippines’. Despite getting parliamentary approval, BMI has expressed concern that the take over of Digitel by PLDT will likely result in a industry which is dominated by a single major operator.
Other noteworthy developments in the Philippines telecoms industry includes the announcement in September that broadband operator Bayan Telecommunications had its permit to operate a cellular mobile telephone system (CMTS) network extended up to November 7 2013 by the country’s regulator. The extension will allow the operator to continue installing cell sites to meet permit obligations and prepare for the launch of next-generation LTE services following major rivals Smart Communications and Globe Telecom.
During this quarter the Philippines dropped from 11th to 12th position in BMI’s telecoms business environment ratings for the for Asia Pacific region. The Philippines now scores 49.7 overall, down from 51.1 in our previous update. Although the country is at the bottom half of our ratings table. The industry is still relatively attractive when compared with alternative emerging industry s in the region.

Table Of Contents

Executive Summary . 7
Industry SWOT Analysis 9
Philippines Wireline (Fixed-Line And Broadband) Industry Environment and Risk Analysis . 9
Philippines Mobile Industry Environment and Risk Analysis 10
Philippines Political Environment and Risk Analysis .. 11
Philippines Economic Environment and Risk Analysis 12
Philippines Business Environment SWOT .. 13

Environment Overview Ratings .. 14
Data : Asia Pacific Business Environment Ratings, Q112 . 19
The Philippines 20

Market Projection Scenario 22
Mobile . 22
Data : Telecoms Segment - Mobile - Historical Data And Projections, from 2009 to 2016 . 22
ARPU .. 24
Data : Smart Communications and Globe Telecom ARPU And Subscriber Mix figures, from 2009 to 2016 . 24
Fixed Line . 26
Data : Telecoms Segment - Fixed Line - Historical Data And Projections, from 2009 to 2016 26
Internet .. 28
Data : Telecoms Segment - Internet - Historical Data And Projections, from 2009 to 2016 28
Market Data Analysis 30
Mobile . 30

Industry Analysis 30
Data : Philippines Wireless Net Additions, Q211 .. 30
Data : Leading Mobile Operators’ Prepaid Vs Postpaid Net ARPU (PHP) .. 34
3G .. 34
Smart Communications 36
Globe Telecom . 37
Digitel (Sun Cellular) .. 38
Mobile Contract Wins .. 39
Data : Mobile Contract Wins, from 2008 to 2011 .. 39
Mobile Operator Data . 40
Data : Philippines Industry Overview 40
Data : Smart Communications . 41
Data : Globe Telecom .. 43
Data : Sun Cellular (Digitel) .. 45
Mobile Content .. 47
Regional Outlook 47
Country Outlook . 51
SMS 51
Mobile TV .. 53
Mobile Money .. 53
Mobile Banking 54
Value-Added Services Timeline 56
Data : Selected VAS Services Launched, from 2008 to 2010 56
Fixed Line . 58
PLDT 58
Data : PLDT Fixed-Line Revenue Breakdown, H210 Vs H211 (PHPmn) .. 59
Digitel .. 60
BayanTel . 61
Innove Communications.. 62
Eastern Communications 62
Broadband 64
Data : A Comparison Of Major Broadband Operator Subscriber Figures, H110 Vs H111 (mn) 64
PLDT 64
Innove .. 65
BayanTel . 66
Mobile Broadband Services . 67
WiMAX 68
Submarine Cables .. 71
ePLDT . 73
Wireline (Fixed-Line And Broadband) Developments . 74
Data : Wireline Developments, from 2008 to 2011 74
Regulatory Environment And Market Development .. 76
Philippines: Regulatory Bodies And Their Responsibilities .. 77
3G Licensing . 78
Regulatory Developments .. 80

Industry Developments 82

Competition Overview .. 85
Competitor Analysis .. 85
Data : Key Players - Philippines Telecoms Segment 85
Data : Philippines Selected Operators Financial Indicators, from 2004 to 2010 85
Company Monitor 86
Industry News - 'Quietly Brilliant': A Winning Strategy For HTC .. 86
Data : HTC Q211 Profit and Loss Indicators (TWDbn) . 87
Operator Profiles . 92
Philippine Long Distance Telephone Firms (PLDT) . 92
Smart Communications 98
Globe Telecom 104
Digital Telecommunications Philippines Inc (Digitel) 109
Regional Telecommunications Penetration Overview .. 112
Fixed Line 112
Data : Regional Fixed-Line Penetration Overview ..113
Mobile 113
Data : Regional Mobile Penetration Overview ..114
Broadband ..115
Data : Regional Broadband Penetration Overview .115
Country Snapshot: Philippines Demographic Data . 116

Section I : Population .116
Data : Demographic Indicators, 2005-2030 116
Data : Rural/Urban Breakdown, 2005-2030 ..117

Section II : Education And Healthcare 117
Data : Education, from 2002 to 2005 .117
Data : Vital Statistics, 2005-2030 .117

Section III : Labour Industry And Spending Power ..118
Data : Employment Indicators, from 2001 to 2006 ..118
Data : Consumer Expenditure, from 2007 to 2012 (US$) .118
Data : Average Annual Manufacturing Wages, from 2004 to 2006 .119
Glossary Of Terms .. 120
Data : Glossary Of Terms .120
BMI Methodology . 121
How We Generate Our Market Projections .121
Data : Key Indicators For Telecommunications Market Projections .121
Telecoms Business Environment Ratings .123
Risk/Reward Ratings Methodology ..123
Ratings System 123
Indicators ..123
Data : Ratings Indicators .124
Weighting ..125
Data : Weighting Of Indicators .125
Sources ..125

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