Phl to offer growth opportunities for telcos

SINGAPORE – The Philippines has been tagged as one of the countries with the greatest opportunities for growth in the mobile telecommunications industry in the next five years.

A joint paper titled “D-20:Rising stars in the telecom space” of the INSEAD Business School and technology, media and telecommunications advisory and investment firm Delta Partners presented here yesterday identified the Philippines as one of the D-20 countries or emerging markets which are seen to present the next wave of growth for the mobile telecommunications industry.

“In the next four to five years, they (D-20) will represent 75 percent of growth GDP (gross domestic product) wise, hence, telco wise,” Mar Pages, principal at Delta Partners said in a briefing yesterday.

The D-20, she said, currently generate 30 percent of current global GDP.

Apart from the Philippines, other countries making up the D-20 are Argentina, Bangladesh, Brazil, China, Egypt, India, Indonesia, Iran, Mexico, Nigeria, Pakistan, Poland, Russia, Saudi Arabia, South Africa, South Korea, Thailand, Turkey and Vietnam.

Pages said that while growth in the telecommunications industry are seen in the D-20, they are facing some challenges as the rules of the game are changing.

She noted that from limited competition, the industry is moving to more competition with the entry of new mobile service providers.

From latent demand, telecommunication firms, she said are also seeing market saturation, particularly for traditional services like voice and text messaging.

Mobile service providers, she said, now face the challenge of offering new services apart from traditional services.

Customers who used to have high tolerance for low quality of service, she also said, are now putting more focus on the quality of service.

For the Philippines, Andreas von Maltzahn, another principal at Delta Partners, said the market has become saturated compared to five years ago when not everyone had a mobile phone for calling or texting.

“We are not going to see growth in revenues to come from traditional business because the market is saturated. Telecommunication firms will be forced to look at new services to grow their revenues,” he said.

For his part, Juan Jose Rio, a partner at Delta Partners said in the same event that for Philippine telecommunication service providers to grow their revenues, they must look at alternative sources of revenue growth such as mobile broadband services.

“They must offer smartphone packages and look at how people are using their mobile phones to access the internet and develop packages based on that,” he said.

He said Philippine mobile service providers may also have to consider reducing offering unlimited services at low prices because it would not allow them to sustain their business and improve services.

“Cutting back unlimited services would not jeopardize the ability of Filipinos to access telco services but would allow them to experience better services,” he said.

He said that as the Philippine economy grows, consumers would have more money to be spent for quality services.