No more room for telecom growth in PH

By Cai U. Ordinario, BusinessMirror

Posted at Jul 18 2012 07:05 AM | Updated as of Jul 18 2012 08:57 PM

MANILA, Philippines - With the unprecedented growth of the industry in the past few years, data from the World Bank showed that the Philippines is one of the countries that showed signs there may no longer be room for growth in the telecommunication sector.

In its latest report, titled “2012 Information and Communications for Development: Maximizing Mobile,” the Washington-based lender said the Philippines is also one of the countries where there are now more SIM cards than people.

“Around half of the countries are ‘stuck’ at a supply component value of 0.5; there are more SIM cards than people, but the share of mobile broadband is low,” the report stated.

Through a Mobile Analytical Tool, the report was able to analyze, on a country-by-country basis, the affordability and coverage of mobile networks or universality; the degree to which operators provide voice and advanced network services or supply; and the ownership and usage of mobile phones or demand.

Based on the analysis, it showed that the Philippines posted a score of 0.97 for universality in 2010; a score of 0.51 for supply; and a score of 0.43 for demand.

“As might be expected, there is a close relationship between the supply and demand categories. Outliers illustrate mismatches between supply and demand. For example, in China, the demand component [0.58] is higher than the supply component [0.35], suggesting further room for growth,” the report explained.

Data also showed that in the Philippines, some 99 percent of the population are covered by mobile-cellular networks. The report said that for every 100 people, there are 101 mobile subscriptions and around 96 percent of these subscriptions are prepaid.

Some 9.8 percent of the population use mobile Internet, while as many as 97 percent of mobile users are Short Message Service (SMS) users. The report said mobile costs account for only 5.9 percent of per capita gross national income.

Some members of the Association of Southeast Asian Nations (Asean)—Malaysia, Singapore, Thailand and Vietnam—are in the same boat as the Philippines with high SIM card penetration and highly competitive mobile markets. Asean also groups Brunei Darussalam, Cambodia, Indonesia, Laos and Myanmar.

Meanwhile, with the high penetration of mobile use, text messaging contributed to the ouster of a president in the Philippines in 2001 and various money-transfer schemes.

Some 7 million text messages saying “Go 2 EDSA. Wear blk” sent encouraged a million Filipinos to flock to Edsa in January 2001. This forced the resignation of then-President Joseph Estrada, who was then tried and found guilty by an Impeachment Court. Edsa is a major highway straddling a number of cities in Metro Manila.

In terms of e-wallets, the Philippines has Globe Cash (GCASH) and Smart Money, which allow Filipinos to transfer money to relatives and pay their bills.

Mobile phones are also being used in unique ways, such as GPS-enabled mobile phones, to receive traffic data and dispatch information in Cebu City in the country’s Visayas region. This is a big help for many taxi drivers in a growing metropolis like Cebu.

“Mobile communications offer major opportunities to advance human and economic development—from providing basic access to health information to making cash payments, spurring job creation and stimulating citizen involvement in democratic processes,” World Bank Vice President for Sustainable Development Rachel Kyte said in a statement.

“The challenge now is to enable people, businesses and governments in developing countries to develop their own locally relevant mobile applications so they can take full advantage of these opportunities,” he added.

The World Bank said the number of mobile subscriptions in use worldwide, both prepaid and postpaid, has grown from fewer than 1 billion in 2000 to over 6 billion now, of which nearly 5 billion are in developing countries. The ownership of multiple subscriptions is also becoming common and suggests that their numbers could exceed that of the human population.

It added that more than 30 billion mobile applications, or “apps,” were downloaded in 2011. The software extends the capabilities of phones to become mobile wallets, navigational aids or price-comparison tools.

In developing countries, like the Philippines, citizens are increasingly using mobile phones to create new livelihoods and enhance their lifestyles, while governments are using them to improve service delivery and citizen feedback mechanisms.

The World Bank report analyzed the growth and evolution of mobile telephony and the rise of database services, including apps, delivered to handheld devices. The report explored the consequences for development of the emerging “app economy,” especially in agriculture, health, financial services and government, and how it is changing approaches to entrepreneurship and employment.