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Philippines Telecommunications Report Q4 2011
Business Monitor International, July 2011, Pages: 113
Business Monitor International's Philippines Telecommunications Report provides industry professionals and strategists, corporate analysts, telecommunication associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Philippines's telecommunications industry.
BMI has incorporated the latest figures provided by the Philippine Long Distance Telephone Company (PLDT), Globe Telecom and Digital Telecommunications Philippines (Digitel) into the forecast scenarios, with minor changes in our mobile and ARPU expectations. BMI believes that the mobile subscriber growth in the Philippines is experiencing a slowdown due to the fact that the market is approaching saturation. BMI forecast 94.8mn mobile subscribers by end-2011, representing a penetration rate of 99.3%, and the report envisages this number to increase to 115.1mn in 2015. Meanwhile, ARPU rates are expected to continue to trend downwards in light of the prevalence of prepaid subscribers and operators embarking on aggressive pricing strategies to offset the slowing growth momentum.
At the time of writing, the acquisition of Digitel by PLDT has yet to resolve. Both companies have agreed to extend the closing date of the transaction by one month to July 30 in order to overcome the final hurdle in the form of the National Telecommunications Commission (NTC). The NTC has scheduled hearings on July 5-7 and 12-14, and will evaluate the potential impact of the merger between the Philippines’ largest and third ranked mobile operators.
In order to offset declining opportunities in the Philippines telecoms market, and mitigate uncertainties arising from its pending purchase of Digitel, PLDT has announced plans to become an MVNO in at least two other countries, expanding its international presence beyond Hong Kong and Singapore. The business of PLDT Global, the international sales and marketing arm of PLDT, has been relatively successful after the company achieved a penetration rate of around 30.1% in a mere few years, and this publisher believes that this gives PLDT Global the confidence to venture into more lucrative markets.
The Philippines bounced back to 11th position in BMI’s latest Asia Pacific telecoms business environment ratings, which made the country one of the better-placed emerging markets in the region. The Philippines' real GDP growth came in at 4.9% y-o-y in Q111, slowing substantially from the 6.1% print recorded in the preceding quarter. The latest figure was in line with our core view that the Philippine economy will register a moderation in headline growth, following last year's strong performance, when the economy expanded by 7.6%. While investment-driven economic expansion will remain an important theme in 2011, especially with President Benigno Aquino III's pro-foreign direct investment initiatives, BMI still expects a deceleration in capital formation expansion, due to the high base in 2010.
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