Philippines gains additional telecom market competition

The fixed line market in the Philippines remains underdeveloped with low penetration in both the fixed broadband and fixed-line markets. This is partly attributed to under-investment in fixed infrastructure, the dominance of the mobile segment and the rapid development of mobile broadband. In coming years most investment in the telecom sector will be focussed on supporting fibre infrastructure in urban areas, and on 5G infrastructure. The incumbent telco PDLT is accelerating a network modernisation program which will see the company migrate from copper to fibre, while there has been considerable progress in 5G developments, with commercial service launches expected by the end of the year.

In addition, a continuing interest in new data centre builds is expected, as well as augmenting existing capacity.

Considerable cooperation is also evident among telcos, covering a range of sectors. Smart Communications has teamed up with Google to deploy additional Wi-Fi hubs across the country as part of a drive to provide free connections nationwide, while Smart, Dito Telecommunity and Globe Telecom have progressed with network sharing in a bid to reduce costs and expedite network rollouts.

Mobile subscriber growth is expected to be relatively low during the next five years, though will be driven by the continuing migration to LTE and the take-up of 5G services from 2021. Competition is expected to intensify from 2021, with the entry of Dito and a further push from NOW Telecom.

BuddeComm notes that the outbreak of the Coronavirus in 2020 is having a significant impact on production and supply chains globally. During the coming year the telecoms sector to various degrees is likely to experience a downturn in mobile device production, while it may also be difficult for network operators to manage workflows when maintaining and upgrading existing infrastructure. Overall progress towards 5G may be postponed or slowed down in some countries.

On the consumer side, spending on telecoms services and devices is under pressure from the financial effect of large-scale job losses and the consequent restriction on disposable incomes. However, the crucial nature of telecom services, both for general communication as well as a tool for home-working, will offset such pressures. In many markets the net effect should be a steady though reduced increased in subscriber growth.

Although it is challenging to predict and interpret the long-term impacts of the crisis as it develops, these have been acknowledged in the industry forecasts contained in this report.

The report also covers the responses of the telecom operators as well as government agencies and regulators as they react to the crisis to ensure that citizens can continue to make optimum use of telecom services. This can be reflected in subsidy schemes and the promotion of tele-health and tele-education, among other solutions.

Key Developments

• Regulator issues guidelines on sharing mobile tower infrastructure, commits to spending P46.6-billion of digital economy programs;
• MNP not expected to become operational before mid-2021;
• Regulator announces PHP7.7 billion plan to roll out 23,100 public Wi-Fi hotspots across the country;
• Globe extends 5G to prepaid subscribers;
• JUPITER subsea cable linking the Philippines with Japan and the US gains US government approval;
• Ignite Telecommunications granted 25-year telecom franchise;
• Dito Telecommunity delays service launch to March 2021;
• Smart Communications teams up with Google to deploy additional Wi-Fi hubs;
• MNOs prepped for 5G service launch later in 2020;
• Report update includes the regulator’s market data, telco operational and financial data to Q1 2020, Telecom maturity Index charts and analyses, assessment of the global impact of COVID-19 on the telecoms sector, recent market developments.

Key companies mentioned in this report:
PLDT, Smart Communications, Globe Telecom, Liberty Telecom, Bayantel, Bell Telecom (BellTel), Digitel, Eastern Telecom (ETPI), Innove (Globe), PT&T, ABS-CBN Corp, Altimax, Bayantel, Broadband Philippines, Vega Telecom.

Source: budde.com.au

Source: Peso Economics