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Philippines Telecoms Industry Report - 2022-2027

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    Report

  • 79 Pages
  • April 2022
  • Region: Philippines
  • Idem Est Research
  • ID: 5575414

This report provides analyses of revenue and market forecasts as well as statistics of the Philippines telecoms industry including market sizing, 5-year forecasts, market insights, key telecom trends, 5G, digital infrastructure, and also features the following:

  • Overall Telecommunications Market by Major Operators
  • Telco Operators Profile, Revenue, and EBITDA Mix
  • Mobile Subscribers & Revenue Market Overview and Forecasts
  • Spectrum Holdings
  • IoT Market Overview
  • Broadband Subscribers & Revenue Market Overview and Forecasts
  • Digital Infrastructure (Fibre, Telecom Towers, Data Centres, Submarine Cables)
  • National Broadband Network Detailed Market Overview and Forecasts
  • Telecom Tower Market Analysis and Forecast
  • Thematics / Opportunities relating to 5G, M&A and e-Commerce
  • Telco M&A Transaction Database

Reasons to Buy the Report:

  • Benefit from the latest market opportunities
  • Understand the threats to your operations and investments and protect your company against future risks
  • Gain insight on emerging trends that could support, strengthen or disrupt your activities in the market
  • Get a full view of the competitive landscape to assess your market position.
  • Forecasts as a key input for successful budgeting and strategic business planning in the telecoms market
  • Target business opportunities and risks in the telecoms sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Operators Profiles.

Table of Contents

1. Key Statistics
1.1  Philippines Population
1.2  Philippines’ Economy
1.3  Philippines’ GDP
2. COVID-19 Impact
3 Overall Telecommunications Market, 2015–2027
3.1  Market Overview
3.2  Historical Telecommunications Market Revenue, 2015-2021
3.3  Overall Telecommunications Market Forecast, 2020-2027
3.4  Telecommunications Market Capital Expenditure, 2015-2027
3.4.1 Historical Telecommunications Capex Spend, 2015-2021
3.4.2 Capex to Revenue Benchmark
3.4.3 Capex to GDP Benchmark
3.4.4 Telecommunications Capex Spend Forecast, 2020-2027
4 Telecommunications Operators Profile
4.1  PLDT Profile
4.1.1 PLDT Revenue and EBITDA Mix
4.2  Globe Telecom Profile
4.2.1 Globe Revenue and EBITDA Mix
4.3  Dito Telecommunity
4.3.1 DITO Capex Spend Profile, 2019-2023
4.4  Converge ICT
4.5  Other Players Profile
4.5.1 ABS-CBN
4.5.2 Other Cable Operators
5. Mobile Market
5.1  Mobile Subscribers Historical and Forecast, 2015-2027
5.1.1 Mobile Subscribers Historical, 2015-2021
5.1.2 Mobile Subscribers Market Share, 2015-2021
5.1.3 Breaking the Duopoly
5.1.4 Philippines Smartphone Share, 2021
5.1.5 Philippines Mobile Subscribers Forecast, 2020-2027
5.1.6 Philippines Mobile Subscribers by Generation Forecast, 2020-2027
5.2   Mobile Revenue Historical and Forecast, 2015-2027
5.2.1 Historical Mobile Revenue, 2015-2021
5.2.2 Mobile Revenue Forecast, 2020–2027
5.2.3 Mobile Subscribers ARPU, 2015-2021
5.3   Mobile Number Portability on its way
5.4   Spectrum Holdings
5.4.1 Existing Spectrum Holdings and 5G launches
5.4.2 Upcoming 5G Auctions
5.4.3 Mobile Frequencies Portfolios Analysis
5.4.1 Spectrum Depth Benchmark by Country
5.5   Mobile Download Data and Pricing Trends
5.6   Mobile Speed Tests
5.6.1 Ookla Mobile Speed Tests
5.6.2 OpenSignal
5.7  Internet of Things (IoT)
6. Broadband Market
6.1  Fixed Broadband Subscribers Historical, 2015-2021
6.2  Fixed Broadband Subscribers Forecast, 2020-2027
7. Fixed Telecommunications Infrastructure Investments
7.1  Fixed Digital Infrastructure
7.1.1 National Broadband Network Plans
7.1.2 Submarine Cables
7.1.3 FTTH – a long way to go
8. Philippines Telecom Towers Infrastructure Landscape
8.1  Philippines Telecom Towers Market Analysis, 2021
8.1.1 Philippines Telecom Tower Market Overview
8.1.2 Philippines Telecom Towers Background
8.2   Philippines Tower Market Competitive Landscape Comparison
8.2.1 Philippines Tower Market Competitive Landscape Comparison
8.3   Philippines Telecom Towers & Rooftops Market Forecast
8.3.1 Philippines Telecom Towers Forecast, 2020-2027
8.3.2 Regulatory Considerations
9. Thematics / Opportunities
9.1  Consolidation Opportunities
9.2  Diversification Opportunities
9.3  New Telecoms Operating Model
9.3.1 The Attraction of Infrastructure Multiples
9.4  5G Developments
9.4.1 5G Overview
9.4.2 5G – Relative Capex Investments and Frequency Range
9.4.3 5G OpenRAN
9.4.4 Beyond 5G and Towards 6G
10.  Telco Transaction Database11.  Methodology12.  Copyright Notice
List of Figures
Figure 1 – Telco sector revenue as % of GDP in the Philippines
Figure 2 –Revenue Profile Historical Mix (PHP m), 2015 – 2021
Figure 3 –EBITDA Profile Historical Mix (PHP m), 2015 – 2021
Figure 4 – Telecommunications Market Revenue, 2021
Figure 5 – Telecommunications Market EBITDA, 2021
Figure 6 – Telecommunications Revenue & EBITDA Share, 2021
Figure 7 – Total Telecoms Market Revenue and Growth Rate (PHP bn), 2020-2027
Figure 8 – Capex to Revenue Benchmark, 2015-2021
Figure 9 – Capex to GDP Ratio Benchmark, 2015-2021
Figure 10 – Telecommunications Capital & Operational Expenditure Spend, 2000-2027
Figure 11 – PLDT Service Revenue Mix, 2015-2021
Figure 12 – PLDT Historical Revenue Mix, 2015 – 2021 (PHP m)
Figure 13 – Globe Revenue Mix, 2015-2021
Figure 14 – Globe Historical Revenue Mix (PHP m), 2015 – 2021
Figure 15 – DITO Expected Capex Spend Distribution, 2019-2023
Figure 16 – Converge ICT Revenue Mix, 2016-2021
Figure 17 – Converge ICT Historical Revenue Mix (PHP m), 2016 – 2021
Figure 18 – Mobile Subscribers Share Comparison, 2015-2021
Figure 19 – Philippines Mobile Subscriber Share Comparison, 2015-2021
Figure 20 – Mobile Net Adds (000’s) Comparison, 2015-2021
Figure 21 – Mobile Subscribers Forecast, 2020-2027
Figure 22 – Mobile Subscribers by Generation Forecast, 2020-2027
Figure 23 – Mobile Revenue Forecast, 2020-2027
Figure 24 – Mobile Subscribers ARPU, 2015-2021
Figure 25 – Subscriptions per MHz of Spectrum, Select Asia-Pacific Countries, 2021
Figure 26 – Mobile Handsets Monthly Download Data, 2017-2021
Figure 27 – Data Pricing Trends in Asia-Pacific (US$ per GB per month), 2017-2021
Figure 28 – Spectrum available for IoT in the Philippines
Figure 29 – Broadband Subscribers Share Comparison, 2015-2021
Figure 30 – Philippines Net-Adds (000’s) by Operators, 2015-2021
Figure 31 – Broadband Subscribers Forecast, 2020-2027
Figure 32 – Philippines Tower Market Share, 2021
Figure 33 – Philippines Telecom Towers Forecast, 2020-2027
Figure 34 – Telecoms Providers' EV/EBITDA Ranges
Figure 35 – 5G Network Slices Structure
Figure 36 – Effect of Frequency on Range
Figure 37 – 5G Capacity and Coverage Layers
Figure 38 – Relative Capex Required for 5G Network Infrastructure Investment
Figure 39 – Telecom Infra Project – OpenRAN Vision
List of Tables
Table 1 – Philippines – Key Statistics
Table 2 – Telecommunications Market Revenue by Operators, 2015-2021
Table 3 – Total Telecommunications Market Revenue, 2020-2027
Table 4 – Historical Telecommunications Capex Spend, 2015-2021
Table 5 – Historical PLDT Service Revenue, EBITDA & Capex, 2015-2021
Table 6 – Globe Service Revenue and EBITDA Mix, 2015-2021
Table 7 – DITO Telecommunity Capex Investment Profile, 2019-2025
Table 8 – Converge ICT Service Revenue, EBITDA and Capex Mix, 2016-2021
Table 9 – Historical Mobile Subscribers, 2015-2021
Table 10 – Philippines Mobile Subscribers Forecast, 2020-2027
Table 11 – Historical Mobile Service Revenue, 2015-2021
Table 12 – Mobile Service Revenue Forecast, 2020-2027
Table 13 – Historical Mobile ARPU, 2015-2021
Table 14 – Spectrum Holdings by Operators and by Bands (MHZ)
Table 15 – Mobile Frequencies by Operators and by Band (MHZ)
Table 16 – Historical Broadband Subscribers, 2015-2021
Table 17 – Historical Broadband ARPU, 2015-2021
Table 18 – Philippines Broadband Subscribers Forecast, 2020-2025
Table 19 – International Submarine Cable Systems with Landing stations in the Philippines
Table 20 – Philippines Telecom Market Analysis, 2020
Table 21 – Philippines Registered Independent Telecom Towercos, 2022
Table 22 – Philippines Tenant Indicative Tower Leasing Monthly Fees
Table 23 – Philippines Tower Market Competitive Landscape Comparison
Table 24 – Philippines Telecom Towers, Revenue, Mobile Subscribers, Penetration & ARPU Forecast, 2020-2027
Table 25 – Technology Specifications (ADSL, FTTN, Fibre, 4G/LTE, 4G/LTE-A and 5G)
Table 26 – Telco Transaction Database, 2001-2021

Samples

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Executive Summary

The Philippines’s telecommunications industry has been dominated by the PLDT-Globe duopoly over the last two decades. Recent reforms and the launch of a third mobile operator will bring competition and innovation to the sector. Telecommunications infrastructure investments have more than tripled with the arrival of DITO Telecommunity and Converge ICT to the scene.

The publisher forecasts that mobile subscriptions will continue to grow in the 2022-27 period and fixed broadband subscribers will continue to grow stronger and increase household penetration over the same period. Expanded coverage, greater affordability, service improvements, increased data usage and smartphone penetration are the main drivers of growth in the telecoms sector. The country continues to expand its fibre-optic network and 4G coverage, backed by strong investment in capital expenditure.

Investment in the telecoms sector grew to its highest in 2021 with the new mobile market entrant DITO Telecommunity launching that year. The publisher expects the overall telecoms market to grow strongly through to 2027 after a marked slow down in 2016 and 2017 due to legacy voice and SMS revenue pressure partially offset by mobile data growth.

Capex Investments
The Capex to GDP ratio remained relatively stable between 2014 and 2018 but soared in 2019. The publisher estimates that the ratio will settle back by 2024 peaking in 2021. Both PLDT and Globe are investing heavily in 4G and 5G with PLDT playing catch-up by investing in its network expansion while Globe refocuses on its fixed broadband business after stagnating in 2021. The publisher forecasts an above-average Capex to sales ratio until 2023 while DITO Telecommunity ramps up its mobile network investments.

Mobile Subscribers and Revenue
The publisher forecasts strong growth in subscribers in 2022 across the mobile and fixed broadband segments. We expect that the number of mobile and broadband subscribers will continue to rise steadily to 2027. Mobile network operators are facing competitive pressure with the market shifting to unlimited voice and text and data allowance increasingly becoming the sole offering differentiator. The publisher benchmarked mobile data pricing across 8 countries in the Asia Pacific region and found that the Philippines is lagging behind in terms of data download but expects the country to catch up as 4G coverage is accelerating and smartphone penetration is increasing especially in regional areas.

According to the benchmark study of mobile data pricing, India has the lowest rate per GB at just a few cents per GB, while Australia and China had the biggest cost reduction per GB mostly due to increased data allowance in plans while Singapore remains expensive. The Philippines ' pricing is on par with Thailand when benchmarked against neighbouring countries.

Broadband Subscribers – FTTH Push and Fixed Wireless
The Philippines fixed broadband was very much a laggard compared to other ASEAN countries which have invested more heavily in Fibre-to-home infrastructure. PLDT’s FTTH penetration is much lower than in other countries such as Indonesia, Malaysia and Thailand. Globe’s efforts have turned to fixed wireless access which is not likely to fulfil customers’ appetite for video long-term and is renewing its focus on back to FTTH. Other efforts from ABS-CBN with Sky Broadband remain small in scope and so far target only wealthy gated communities areas of Metro Manila, other large cities or new developments. The biggest growth after PLDT was Converge ICT which is performing very well.

Thematics – Telecoms Infrastructure / 5G / M&A / e-Commerce
The Philippines is a sleeper market for mobile infrastructure, this is largely due to the cosy monopoly enjoyed between Globe Telecom and Smart (PLDT) over the last two decades and also due to the massive red tape required for building a mobile tower. The announcement of the third telco player ignited the market for tower sharing with the DICT pushing a policy to build over 50,000 new towers shared across the industry, attracting a new category of infrastructure investors that were not participating in the market until now. A new tower built accompanied by the latter's liberalisation will boost the country’s telecoms infrastructure and will be most welcome in the market after two decades of under-investments in the Philippines market.

Mobile operators and specialised towers are rushing to sign deals but the analyst doubts Globe and Smart will share any existing assets in a hurry unless they are forced to by the regulator. Most towers are greenfield operations and are each planning to build about 1,000 to 5,000 towers over the next three years. A large number of new entrants with over 20 towers signed an MoU with DICT to participate in the build of 50,00 new towers.The Philippines has one of the lowest ratios of mobile towers per capita and the highest number of subscribers per base transceiver station (BTS) in the Association of South-East Asian Nations (ASEAN) region.

Investment funds are assigning high valuation multiples to telecommunications infrastructure assets such as mobile towers, data centres, submarine cable and fibre infrastructure. This report outlines some real market examples of how investors view and value these investments with industry examples and EV/EBITDA comparatives and benchmarks. Most telecommunications operators are in the heavy investments phase both fixed and mobile segments, spending heavily upgrading their 4G network infrastructure. The publisher expects a wave of consolidation in the Philippines but not before 2022-2023, as margins get squeezed further and a new Capex cycle kicks with 5G.

The arrival of 4G moved the Internet off our desktops into our palms and pockets, 5G could transform the network from something we carry around to something taking us around either virtually (augmented reality or virtual reality) or in reality (autonomous vehicles), the 5G outcome and benefits beyond fast connectivity remain largely unknown in terms of business models, investments required and timeline.
The increase in smartphone penetration made possible by the availability of low-cost devices has triggered growth in e-commerce, tapping into the potential of the Philippines’s emerging middle class with relatively high disposable income. Grab, Lazada, Shopee and Zalora are leading the pack with e-commerce, ride-sharing and mobile payments.

Key Companies mentioned in this report:
ABS-CBN, Unity Digital Infrastructure, ALT Global Solutions Inc., American Tower, Bayantel, Chelsea Logistics and Infrastructure Holdings Corp., Converge ICT, DITO Telecommunity, edotco, Frontier Tower Associates, Globe Telecom, LCS Holdings Inc., Lopez Group, Mislatel, Mynt, Now Corp, PLDT, PT&T, Royal Cable, Sky Cable, Sky Broadband, Udenna, Vega, Voyager.

Companies Mentioned

  • ABS-CBN
  • ALT Global Solutions Inc.
  • American Tower
  • Bayantel
  • Chelsea Logistics and Infrastructure Holdings Corp.
  • Converge ICT
  • DITO Telecommunity
  • edotco
  • Frontier Tower Associates
  • Globe Telecom
  • LCS Holdings Inc.
  • Lopez Group
  • Mislatel
  • Mynt
  • Now Corp
  • PLDT
  • PT&T
  • Royal Cable
  • Sky Broadband
  • Sky Cable
  • Udenna
  • Unity Digital Infrastructure
  • Vega
  • Voyager

Methodology

The publisher uses primary and secondary research as well as proprietary information sources to generate market analysis and forecasts for fixed and mobile services in terms of both subscribers and revenue. Interviews are conducted with key service providers in the region to determine current and potential market sizing as well as future service offerings. Information gathered through interviews is further cross-checked to validate the total market size.

The primary research is supplemented with a range of secondary source material, including related research, press releases, securities filings, media, Web-based materials, and trade publications.

Industry and population statistics are also leveraged for reference and to ensure consistency in the data collection. Extensive service provider primary and secondary research, together with the publisher's end-user research database, provides a strong basis for sizing and forecasting the market. The multiple reference points allow for validation of information provided by the service providers compared with that gathered from alternative sources.

Note: Forecasts are made in local currency, and no allowance is made for inflation. All numbers in this document may not be exact due to rounding.

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