This quarter’s report on the Philippines telecommunications industry includes greater coverage of thefixed-line, internet and broadband sectors. The broadband market has witnessed the highest number ofdevelopments during the early part of 2009, as it remains the only sector to provide real opportunities forfurther growth.
At the end of 2008, we estimate there were around 1.5mn broadband subscribers, representing apenetration rate of 2%. Underlying annual growth rates of 58%, compared to the internet market, whichwas up by 48%, suggest that broadband is developing rapidly. Indeed, investments in broadband havebeen aggressively pursued by Globe Telecom, the Philippines’ second largest telecoms operator.
In March 2009, Globe Telecom unveiled its second landing platform, the Tata Global Network-IntraAsia (TGN-IA), which cost US$90mn and makes up part of the pan-Asian cable communications system.In the same month, the operator announced that it had also launched WiMAX services at a cost ofPHP795 per month, offering speeds of up to 512Kbps.
Further reports from other internet service providers (ISPs) also came forward in March. Cableco GlobalDestiny, the country’s third largest cable TV operator, announced that it would invest around PHP700mnto upgrade its digital platform, and that it would look to build a seamless state-of-the-art broadbandnetwork to serve the growing needs for access to information. This would complement its existingportfolio of cable TV and telephony services.
PacNet, the global ISP, reported that it would invest up to US$15mn per year in upgrading its submarinecable network to meet the increasing demand of the country’s business process outsourcing (BPO)industry, raising internet bandwidths.
BPO may come to be heavily relied upon by the government in the development of the Philippines’economy, which has begun to suffer as a consequence of its reliance on remittances. With a significantproportion coming from the US, itself predicted to see its economy contract by 2.3% in 2009, accordingto BMI forecasts, this will see remittances start to dry up.
In view of this, ISPs like PacNet, Globe Telecom and the Philippines Long Distance TelephoneCompany (PLDT), which own submarine cables, can expect traffic over their networks to rise during theyear, helping to offset the decline in revenues experienced from other parts of their business, mobile andfixed-line. Globe Telecom has gone as far as to say that broadband revenues could even overtake mobile.
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