A BUDDECOMM REPORT PHILIPPINES TELECOMS, MOBILE, BROADBAND AND FORECASTS 18th Edition Researcher: Peter Evans Copyright 2012 Published 7 June 2012 Paul Budde Communication Pty Ltd Tel 02 4998 8144 – Int: 61 2 4998 8144 5385 George Downes Drive Fax 02 4998 8247 – Int: 61 2 4998 8247 BUCKETTY NSW 2250 Email: [email protected] AUSTRALIA Website: www.budde.com.au Philippines - Telecoms, Mobile, Broadband and Forecasts Disclaimer: The r eader acce pts al l r isks an d r esponsibility for l osses, d amages, co sts a nd o ther co nsequences resulting directly o r indirectly from using t his report or from reliance on any information, opinions, estimates a nd forecasts co ntained h erein. T he i nformation co ntained h erein has b een o btained f rom sources believed to be reliable. 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For information regarding permission, please write to: Paul Budde Communication Pty Ltd, 5385 George Downes Drive, BUCKETTY NSW 2250, AUSTRALIA. © Copyright Paul Budde Communication Pty Ltd, 2012 Website: www.budde.com.au Philippines - Telecoms, Mobile, Broadband and Forecasts EXECUTIVE SUMMARY EXECUTIVE SUMMARY Broadband internet surge in the Philippines continues The mobile segment of the telecom market i n t he P hilippines has slowed significantly after years of solid gr owth. T he s lowing reflected, a mong o ther t hings, a ge neral d ownturn i n t he P hilippine economy. Although the economy certainly picked up in 2010/2011, growth in mobile subscribers has continued at a generally slower pace, with mobile revenue growth also down in what has been a highly competitive market. I nto 2012 the Philippines had almost 95 million mobile subscribers. Penetration had eased past the 100% milestone by that stage and continued modest growth of between 5% and 10% looked likely. As al ready o bserved t he eco nomy will b e an i mportant factor i n t he co ntinued ex pansion o f t he Philippine telecom sector. The recession in the US, its main trading partner, had hit exports hard in 2009 but the country seemed to have overcome this setback. Following the down year in 2009, the country’s GDP growth bounced up again in 2010 reaching 7.3% (matching the 31-year high of 7.3% in 2007). It then fell back to 4% in 2011. Annual growth in the range 4%-5% looked likely in the short term at least. I n t he meantime, t he t elecom industry shifted t o an o verall p attern o f more modest growth, with the core mobile services business looking more like it was approaching maturity and the fixed-line market stagnating. Despite mobile expansion easing, the operators were continuing to talk positively about the market’s potential a nd it was t he mobile s egment t hat r emained central to th e wider d evelopment o f t he country’s telecom s ector. A lthough the s ector w as facing ch allenges there w as clearly s ome energy remaining in it a s t he major operators r olled o ut th eir Third G eneration ( 3G) m obile o fferings a nd looked for improved revenue streams. In the meantime the brightest news has been the growing interest in broadband services, with the major players in the local telecom market starting to invest heavily in the expansion of broadband access and looking at both wired and wireless broadband platforms to provide coverage. The demand for faster internet access was increasing rapidly by 2012. Almost 90% of all internet connections were already broadband. O verall b roadband p enetration r emains relatively l ow, however, with only around s even broadband services for every 100 people in the country by the start of 2012. The c ountry’s fixed-line subscriber p enetration has r emained e ssentially s tagnant, e ven slightly declining. It has certainly been a long period of difficult times 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 less than 4% in 2011; only a little more than half of all Philippine towns and cities had a basic telephone service. Key highlights: • Growth in mobile subscribers in t he P hilippines has slowed considerably by 2012 but had still managed to grow by 16% in 2010 followed by 9% in 2011; • Growth in 2012 was likely to be less than 10%; • Mobile penetration had passed the 100% milestone; • Although t he S MS market has p eaked, F ilipinos were still s ending almost two billion S MS messages every day by early 2012; • The country remained a global leader in SMS volumes and usage levels; • In the meantime, Social networking websites were becoming increasingly popular and changing the shape of the telecoms market; • Broadband Internet access in the Philippines had witnessed a five year surge in subscriber growth; • There were an estimated seven million broadband subscribers by end-2011; however, this still only represented around 7% of the population; • The fixed-line market had lost direction, with no growth expected in the short term; • The P hilippine te lecom s ector c ontinues to b e an i mportant el ement i n t he l ocal eco nomy, contributing over 10% to the country’s GDP. © Copyright Paul Budde Communication Pty Ltd, 2012 1 Website: www.budde.com.au Philippines - Telecoms, Mobile, Broadband and Forecasts EXECUTIVE SUMMARY Philippines: - key telecom parameters – 2011 - 2012 Category 2011 2012 (e) Fixed-line services: • Total No. of subscribers 3.2 million 3.1 million • Annual growth (e) -- -- • Fixed-line penetration (population) 3.4% 3.3% Internet services: • Total No. of fixed internet subscribers 3.4 million 4.5 million • Annual growth 36% 32% • Fixed internet penetration (population) 3.6% 4.6% • Internet household penetration 16% 18% Mobile services: • Total No. of subscribers 93.7 million 98.0 million • Annual growth 9% 5% • Mobile penetration (population) 100% 103% (Source: BuddeComm) This report provides a comprehensive overview of the trends and developments in telecommunications and digital media markets in Philippines. Subjects covered include: • Key Statistics; • Markets, Industry Overviews and Analysis; • Scenario forecasts (fixed, mobile, internet subscribers); • Regulatory Environment; • Major Telecom Operators (Mobile, Fixed, Broadband); • Infrastructure development – national and international; • Mobile Voice and Data Markets; • Internet, including VoIP and IPTV; • Broadband services (DSL, cable, FttH, wireless); • Digital Media. Peter Evans June 2012 Data in this report is the latest available at the time of preparation and may not be for the current year. © Copyright Paul Budde Communication Pty Ltd, 2012 2 Website: www.budde.com.au Philippines - Telecoms, Mobile, Broadband and Forecasts TABLE OF CONTENTS, LIST OF TABLES AND EXHIBITS TABLE OF CONTENTS Chapter number: on page number: 1. KEY STATISTICS AND COUNTRY OVERVIEW ..........................................................1 1.1 Country overview .........................................................................................................2 1.1.1 Background 1.1.2 Economy 2. TELECOMMUNICATIONS MARKET ............................................................................4 2.1 Overview ......................................................................................................................4 2.2 PLDT’s acquisition of Digitel .....................................................................................4 2.3 Background to development .......................................................................................5 2.4 Domination of market by mobile telephony ...............................................................6 3.