PLDT to reposition itself and focus on retail market

By Lenie Lectura,. BusinessMirror

Posted at Sep 05 2012 07:49 AM | Updated as of Sep 05 2012 03:51 PM

MANILA, Philippines - Over-the-top services popularized by Skype and Google Talk will prompt Philippine Long Distance Telephone Co. (PLDT) to reposition itself and concentrate more on delivering its services to the retail market.

“We aim to long-tail our legacy wholesale business and go retail,” said PLDT President Manuel V. Pangilinan in his speech, which was delivered by Orlando Vea, Smart chief wireless advisor, during Tuesday’s Asian Carriers’ Conference.

The theme for this year’s annual conference, Vea said, should make carriers take a second look at the future of wholesale business amid the popularity of voice-over Internet protocol (VoIP), which comes in the form of over-the-top services provided by the likes of Skype and Google Talk.

“Transforming to the new telecom wholesale-retail ecosystem is, in my view, a polite way of saying, ‘It’s the end of the world for our business model.’ We badly need a new one,” he added, quoting Pangilinan’s speech.

Pangilinan said the current voice business of traditional operators faces extinction as more customers turn to these low-cost or free services to connect. Traffic volumes will not rise fast enough to compensate for their continuing slide in prices.

According to research firm OVUM, 75 percent of international voice traffic in 2010 were carried using VoIP. The figure is expected to rise to as much as 100 percent by 2015.

As such, carriers have no choice but to reposition themselves. “Analyst say that international wholesale voice providers must get bigger and better via consolidation, or get out of the business altogether. They say only a few large consolidators will survive in the medium to long term,” Pangilinan said.

PLDT Spokesman Mon Isberto explained that going retail means tapping individual consumers, particularly overseas Filipino workers (OFWs).

The company said that over 10 million OFWs are found abroad and the number is likely to increase in the future. “That provides us with ready-made customer base abroad,” Pangilinan said.

PLDT is going broadband and multi-media. It has invested in major media organizations in line with its plans to deliver both traditional and new media contents over mobile and fixed platforms to complement its legacy and new communications services.

“This suite of new telco [telecommunication] and content services is precisely what will be increasingly relevant to Filipino overseas. Because these services are largely Web-based, we will have the ability to extend our retail offering to Filipinos abroad on a competitive basis,” Pangilinan said.