60% of Pinoys seen to have cellphones by 2010

The number of mobile phone users is expected to reach 58 million by 2010 or a 60 percent penetration rate, which means that 60 percent of the population will be using cellular handsets in three years’ time, an industry executive said.

Globe Telecom president and chief executive officer Gerardo Ablaza said that with penetration level estimated at 49 percent as of end-2006, there is still room for growth in the mobile phone sector.

There are, however, more SIMs (subscriber identity module) in circulation than there are revenue-contributing subscribers because some individuals own more than one SIM belonging to different networks and it is possible that some of the SIMs are not being topped up or actually used. Globe and Smart Communications have been weeding out non-revenue generating SIMs and have not been counting them as part of their respective subscriber base.

Globe ended 2006 with 15.7 million subscribers, around 95 percent of which are prepaid subscribers accounting for about 77 percent of revenues while the remaining five percent are postpaid users contributing 20 to 23 percent of income. "It’s difficult to count the actual number of subscribers," Ablaza said.

Smart, on the other hand, registered 22.9 million subscribers as of end-September 2006.

Ablaza emphasized that the challenge now is to make sure that that the SIMs be at a level of ARPU (average revenue per user) that is economically viable.

He noted that the level of ARPU in the Philippines is still low at an average of $5 per SIM which is low compared to other countries in the region.

"On the other hand, however, average margin per user in the country is healthy and is even higher than those of other countries. Thus, as far as the difference between margin and cost is concerned, we are not lagging behind. This, we are able to achieve by finding ways to deliver service to subscribers at a cost that would allow us to make a reasonable margin," he said.

Ablaza pointed out that the market is beginning to refocus on how to strengthen relations with subscribers and how to increase the usage depth for these relations.

This year, Globe’s chief executive revealed that the goal is for the company to have a significant presence in the broadband market.

Despite doubling its corporate income taxes, Globe closed the year on a high note, as it reported a record high P11.8 billion net income for 2006, 14 percent more than the previous year’s earnings of P10.3 billion.

Excluding the impact of foreign exchange and mark-to-market gains and losses, Globe’s core net income grew even stronger at 24 percent, closing at P10.8 billion.

For 2006, Globe recorded a robust 26 percent growth in its SIM base, with significant net addition of 1.2 million in the last quarter to boost its SIM base to 15.7 million at yearend. Touch Mobile (TM) continued to be a major driver of growth, marking the year with a 57 percent year-on-year growth to reach 4.9 million subscribers.

"Moving forward into 2007, our challenge is to build on the gains that we have achieved in 2006 by sustaining our core wireless business while creating new platforms for growth for Globe. We are particularly excited about the growth opportunities in the broadband sector, and will accelerate the roll-out of our network to tap into the huge demand for affordable Internet access," Ablaza said.