|
(Last updated: 3 Sept 2008)
Trends and opportunities
The market
In 2007, the Philippines investment in ICT was estimated to reach over US$1 billion due to the fact that the telecommunications companies have continued to expand their cell sites, have adopted new technologies, and more importantly, the proliferation of business processing outsourcing (BPO) businesses in the country.
Philippine Long Distance Telephone Company, Inc. (PLDT) continues to dominate the landline business. The company managed to have a steady revenue of US$859 million or one-third of its total business. In terms of market share, PLDT has 41.78 per cent market share; Innove – 20.92 per cent; and Digitel – 9.14 per cent.
In terms of mobile business, it is still a stiff competition between Globe which has 40 per cent of market share and Smart 35 per cent. The third and fourth mobile companies are Piltel, a sister company of PLDT, with 17 per cent market share and Digitel’s Sun Cellular with 8 per cent. Mobile market is dominantly pre-paid. There is an increased business for wireless because the mobile handsets are cheap. A mobile handset costs US$15; SIM card is free or it costs around US$0.62.
The industry technology is on state-of-the-art digital network, which provides modern communications such as broadband Internet access and wireless connection. In 2007, PLDT had 130k subscribers of DSL and 40k subscribers of wireless broadband. Smart has over 2000 wireless broadband-enabled base stations providing high-speed Internet access to 386 cities and municipalities all over the country. Bayantel continues to expand its broadband infrastructure. The country has the lowest broadband penetration in Asia with approximately eight broadband subscribers for every 1000 Filipinos. This is the reason why the NTC targets broadband for all by 2010.
Internet subscription reached 2.5 million in 2001. There are 62 ISPs, 19 of which provide broadband services.
The National Telecommunications Commission (NTC) had given 3G licences to four major domestic carriers, namely, Globe, Smart, Digitel, and Connectivity Unlimited Resources Enterprises. Globe and Smart have already successfully tested their 3G services using an EDGE updated to their existing GSM network equipment.
Globe had installed 1000 3G cell sites. Smart offer real-time video streaming of television shows, movie trailers, and 3G animation. Despite 3G offerings in the market, the industry is cautious on 3G technology because it is an expensive technology and it has not been proven 100 per cent in the global telecommunications market.
VoIP has been accepted as a value-added service for both ISPs and telecommunication companies. Connectivity options available are WCDMA, WLAN, Bluetooth wireless technology, and WiMAX for ‘last mile’ connectivity.
In terms of broadcasting, the NTC had drafted the rules and regulations for digital radio broadcast in the Philippines. Digital audio broadcast signals are transmitted in-band, on-channel or the Iboc technology. This means that several stations can be carried within the same frequency spectrum. Digital television should use Digital Terrestrial Television (DTT) technology, shifting from analogue to digital by 2015.
The BPO of the Philippines is one of the growth engines. It has potential earnings of US$10 billion by 2010 with a CAGR of 40 per cent from 2005 to 2010. Examples of BPO services are: contact centres, back office support, software development, animation, and engineering design.
Opportunities
The opportunities in the Philippines information and communications technology industry are:
- Copper wire-based DSL
- Digital-enabled communication equipment
- Engineering consultants for the implementation of Digital Video Broadcasting-Terrestrial (DVB-T)
- Software security and network management
- Support hardware and services for BPOs
- ERP for SMEs
- WiMAX – for ‘last mile’ connectivity and evolution of wireless broadband
Competitive environment
In terms of telecommunication hardware the market is price sensitive. End users source their supplies from China because of its competitive price. Examples of hardware include rectifiers, batteries and multiplexers.
Other customers prefer high quality and thus source hardware from North America, Europe, and Australia.
In terms of software, local companies have their own IT pool that do in-house programming. Examples of home-grown software programs are payroll system, inventory and planning software. However, complex softwares with critical mission applications are sourced from foreign companies. Examples of complex softwares are network management software and integrated management software.
|