New Market Study Published: Philippines Telecommunications Report Q4 2013

A small uptick in subscriber growth shows how operator strategies are still focusing on building subscriber bases, rather than focusing on increasing revenues from new services. There is still growth potential, as penetration has only just passed 100%. The shared ownership of two of the market's operators has yet to have a negative impact on pricing for subscribers, but BMI sees the potential for longterm implications from reduced competition.

Key Data:

* The mobile market showed 10% year-on-year (y-o-y) growth in Q113, as prepaid subscriptions jumped.
* The number of fixed-line subscribers could be experiencing a sustained period of contraction due to mobile substitution. We forecast 4.0mn subscribers by end-2017, representing a 3.8% penetration rate.
* Despite the mobile market effectively being a duopoly, mobile ARPUs continue to trend lower. Without a concerted effort to move towards higher revenue-generating products and subscribers, operator ARPU will continue to fall.

Full Report Details at
- http://www.fastmr.com/prod/673304_philippines_telecommunications_report_q4_2013.aspx?afid=301

Key Trends And Developments

Additional competition will enter the mobile market as ABS-CBN Corporation reached a deal with Globe Telecom to offer services over the latter's network. The newcomer plans to offer mobile TV services in addition to regular mobile services. This should help boost market dynamics and ensure that Philippines Long-Distance Telephone Company (PLDT)-owned Smart Communications and Sun Cellular are not allowed to dominate the market. Newcomers should keep the established operators on their toes, with Smart Communications announcing more LTE sites available across 115 cities and municipalities.

A new draft of guidelines governing foreign ownership in sectors such as telecoms, real estate and other utilities was released by the Philippines Securities and Exchange Commission. The guidelines, which are based on a ruling passed by the Supreme Court in 2011, were released after a previous draft of such guidelines was criticised. The guidelines are less strict and provide more flexibility in determining foreign ownership compared to the definition mentioned in the Supreme Court ruling, according to Hans Sicat, president of the Philippines Stock Exchange.

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