Mobile broadband seen becoming telcos’ main revenue earners

Mobile broadband seen becoming telcos' main revenue earners
By Paolo Montecillo
Philippine Daily Inquirer

MANILA, Philippines—The steady drop in prices of smart phones in the market and the growing popularity of Facebook and other social networking sites on the go will be the main drivers for broadband revenue growth in the coming years.

Ayala-led Globe Telecom Inc. said revenue from this market segment would soon overtake those from the traditional call and text services.

"Demand for mobile broadband is inherently there as the market for mobile telephony has already reached its mature stage, though 96 percent of our total subscriber base are prepaid customers," Globe president and CEO Ernest Cu said in a presentation during the Mobile Asia Congress in Hong Kong, an annual gathering of thousands of CEOs and key executives of the region's mobile phone industry.

In his speech, he said over 27 percent of all smart phones, which allowed users to access the Internet on-the-go, released in the market to date are priced at under $200 (about P9,100).

By 2014, that percentage could hit more than 45 percent, estimates by New York-based technology research firm ABI Research showed. For Globe, Cu noted that smart phone sales alone were up to 40,000 units a month.

He said the rapid growth of mobile technology had come natural to an archipelago like the Philippines. The country has only 2.5 million landline connections today, giving it a household penetration of only 10 percent. In contrast, there are about 80 million mobile phones or nearly one per person in the country today.

He added that "despite the low penetration rate for fixed-line broadband, social networking is posting phenomenal growth in the Philippines."

In fact, the country jumped to sixth from seventh in the roster of Facebook users around the world in the last three months alone, with over 18 million members. It is the fourth-largest in the number of Twitter users across Asia with over three million users, he pointed out.

The challenge for companies like Globe, however, is offering an acceptable price that will let users go on the Web using their phones without racking up their costs.

At the moment, one of Globe's most affordable offering gives users unlimited access to their favorite mobile Internet site such as Facebook for P20 a day.

In the past few months, local phone firms have seen revenues from call and text services decline slightly. Earnings from broadband Internet services, however, are on a steady rise, although the segment still makes up for but a small part of the total revenue.

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