WHY YOU SHOULD BUY THE PHILIPPINES TELECOMS ANALYSIS INDUSTRY REPORT:
- Benefit from the latest market opportunities
- Understand the threats to your operations and investments and protect your company against future risks
- Gain insight on emerging trends that could support, strengthen or disrupt your activities in the market
- Get a full view of the competitive landscape to assess your market position.
- Forecasts as a key input for successful budgeting and strategic business planning in the telecoms market
- Target business opportunities and risks in the telecoms sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments
- Assess the activities, strategy and market position of your competitors, partners and clients via our Operators Profiles.
The Philippines Telecommunications Industry Report, 2020-2025 includes an overview of the Philippines market dynamics, market sizing, market forecasts, analysis, insights and key trends.
Philippines Telecoms Industry Analysis Report at a Glance
The Philippines’s telecommunications industry has been dominated by the PLDT-Globe duopoly over the last two decades. Telecommunications infrastructure investments have been underwhelming while recent reforms and the launch of a third mobile operator will bring competition and innovation in the sector.
Idem Est Research forecasts that mobile subscriptions will continue to grow strongly in the 2020-25 period and fixed broadband subscribers will also continue to grow and increase its household penetration over the same period. The ratio of the telecommunications sector revenue to GDP is declining from a peak in 2005, sliding down every year since then.
Expanded coverage, greater affordability, service improvements, increased data usage and smartphone penetration are the main drivers of growth in the telecoms sector. The country continues to expand its fibre-optic network and 4G coverage, backed by strong investment in capital expenditure. Investment in the telecoms sector is growing to its highest in 2020 with a peak expected in 2021 with new mobile market entrant DITO Telecommunity due to launch that year.
Mobile subscribers numbers are growing strongly and the back of population growth, increasing affordability and new regulation lengthening the prepaid load expiry dates to 12 months.
Idem Est Research expects the overall telecoms market to grow strongly through to 2025 after a marked slow down in 2016 and 2017 due to legacy voice and SMS revenue pressure partially offset by mobile data growth.
The Capex to GDP ratio remained relatively stable between 2014 and 2018 but soared in 2019. Idem Est Research estimates that the ratio will settle back by 2023 peaking in 2020. Both PLDT and Globe are investing heavily in 4G with PLDT playing catch-up by investing in its 4G network expansion while Globe launched its 5G fixed wireless service. Idem Est Research forecasts an above-average Capex to sales ratio until 2022 while DITO Telecommunity ramps up its mobile network investments.
Mobile Subscribers and Revenue
Idem Est Research forecasts strong growth in subscribers in 2019 and 2020 while the rebasing of mobile subscribers reporting is taking place with the NTC requirement that all the prepaid load expiry be set to 12 months. We expect that the number of mobile phone subscribers will continue to rise steadily to 2025.
Mobile network operators are facing competitive pressure with the market shifting to unlimited voice and text and data allowance increasingly becoming the sole offering differentiator.
Idem Est Research benchmarked mobile data pricing across 8 countries in the Asia Pacific region and found that the Philippines is lagging behind in terms of data download but we expect the country to catch up as 4G coverage is accelerating and smartphone penetration is increasing especially in regional areas.
According to our benchmark study of mobile data pricing, India has the lowest rate per GB at just a few cents per GB, while Australia and China had the biggest cost reduction per GB mostly due to increased data allowance in plans while Singapore remains expensive. The Philippines pricing is on par with Thailand when benchmarked against neighbouring countries.
Broadband Subscribers – FTTH Push and Fixed Wireless
The Philippines fixed broadband is very much a laggard compared to other ASEAN countries which have invested more heavily in Fibre-to-home infrastructure. PLDT’s FTTH penetration is much lower than in other countries such as Indonesia, Malaysia or Thailand. Globe’s efforts have turned to fixed wireless access which is not likely to fulfil customer’s appetite for video long-term. Other efforts from ABS-CBN with Sky Broadband and Converge ICT remain small in scope and so far targeting only wealthy gated communities areas of Metro Manila, other large cities or new developments.
Thematics – Telecoms Infrastructure / 5G / M&A / e-Commerce
The Philippines is a sleeper market for mobile infrastructure, this is largely due to the cosy monopoly enjoyed between Globe Telecom and Smart (PLDT) over the last two decades and also due to the massive red tape required for building a mobile tower. The announcement of the third telco player ignited the market for tower sharing together with the DICT pushing a policy to build over 50,000 new towers shared across the industry, attracting a new category of infrastructure investors that were not participating in the market until now. New tower-build accompanied by fiberisation of the latter will boost the country’s telecoms infrastructure and will most welcome in the market after two decades of under-investments in the Philippines market.
Mobile operators and specialised towercos are rushing to sign deals but we doubt Globe and Smart will share any existing assets in a hurry unless they are forced to by the regulator.
The Philippines has one of the lowest ratios of mobile towers per capita and highest numbers subscribers per base transceiver stations (BTS) in the Association of South-East Asian Nations (ASEAN) region.
Investment funds are assigning high valuation multiples to telecommunications infrastructure assets such as mobile towers, data centres, submarine cable and fibre infrastructure. This report outlines some real market examples of how investors view and value these investments with industry examples and EV/EBITDA comparatives and benchmarks.
Most telecommunications operators are in heavy investments phase both in fixed and mobile segments, spending heavily upgrading their 4G network infrastructure. Idem Est Research expects a wave of consolidation in the Philippines but not before 2022-2023, as margins get squeezed further and a new Capex cycle kicking with 5G.
The arrival of 4G moved the Internet off our desktops into our palms and pockets, 5G could transform the network from something we carry around to something taking us around either virtually (augmented reality or virtual reality) or in reality (autonomous vehicles), the 5G outcome and benefits beyond fast connectivity remain largely unknown in terms of business models, investments required and timeline.
The increase in smartphone penetration made possible by the availability of low-cost devices has triggered growth in e-commerce, tapping into the potential of the Philippines’s emerging middle class with relatively high disposable income. Grab, Lazada, Shopee and Zalora are leading the pack with e-commerce, ride-sharing and mobile payments.
KEY COMPANIES MENTIONED IN THIS REPORT:
ABS-CBN, Aboitiz InfraCapital Inc, ALT Global Solutions Inc., American Tower, Bayantel, Chelsea Logistics and Infrastructure Holdings Corp., Converge ICT, DITO, edotco, Frontier Tower Associates, Globe, Islacom, LCS Holdings Inc., Lopez Group, Mislatel, Mynt, Now Corp, Piltel, PLDT, PT&T, Royal Cable, Udenna, Sky Cable, Sky Broadband, Sun Cellular, Vega, Voyager.
Philippines Telecoms Industry Report – Table of Contents
1 Key Statistics
1.1 Philippines Population
1.2 Philippines’ Economy
1.3 Philippines’ GDP
2 COVID-19 Impact
3 Overall Telecommunications Market, 2014–2025
3.1 Market Overview
3.2 Historical Telecommunications Market Revenue, 2014-2020
3.3 Overall Telecommunications Market Forecast, 2018-2025
3.4 Telecommunications Market Capital Expenditure, 2014-2025
3.4.1 Historical Telecommunications Capex Spend, 2014-2020
3.4.2 Capex to Revenue Benchmark
3.4.3 Capex to GDP Benchmark
3.4.4 Telecommunications Capex Spend Forecast, 2018-2025
4 Telecommunications Operators Profile
4.1 PLDT Profile
4.1.1 PLDT Revenue and EBITDA Mix
4.2 Globe Telecom Profile
4.2.1 Globe Revenue and EBITDA Mix
4.3 Dito Telecommunity
4.3.1 DITO Capex Spend Profile, 2019-2023
4.4 Converge ICT
4.5 Other Players Profile
5 Mobile market
5.1 Mobile Subscribers Historical and Forecast, 2014-2025
5.1.1 Mobile Subscribers Historical, 2014-2019
5.1.2 Mobile Subscribers Market Share, 2014-2020
5.1.3 Breaking the Duopoly
5.1.4 Philippines Smartphone Share, 2020
5.1.5 Philippines Mobile Subscribers Forecast, 2018-2025
5.1.6 Philippines Mobile Subscribers by Generation Forecast, 2018-2025
5.2 Mobile Revenue Historical and Forecast, 2014-2025
5.2.1 Historical Mobile Revenue, 2014-2020
5.2.2 Mobile Revenue Forecast, 2018–2025
5.2.3 Mobile Subscribers ARPU, 2014-2019
5.3 Mobile Number Portability on its way
5.4 Spectrum Holdings
5.4.1 Existing Spectrum Holdings and 5G Trials
5.4.2 Upcoming 5G Auctions
5.4.3 Mobile Frequencies Portfolios Analysis
5.4.1 Spectrum Depth Benchmark by Country
5.5 Mobile Download Data and Pricing Trends
5.6 Mobile Speed Tests
5.6.1 Ookla Mobile Speed Tests
5.7 Internet of Things (IoT)
6 Broadband Market
6.1 Fixed Broadband Su
scribers Historical, 2014-2020
6.2 Fixed Broadband Subscribers Forecast, 2018-2025
7 Telecommunications Infrastructure Investments
7.1 Fixed Infrastructure
7.1.1 National Broadband Network Plans
7.1.2 Submarine Cables
7.1.3 FTTH – a long way to go
7.2 Mobile Tower Infrastructure Landscape
7.2.1 The tower next frontier
7.2.2 Mobile Tower Market Share, 2020
8 Thematics / Opportunities
8.1 Going for Scale
8.2 Going for Scope – Cross-Industry
8.3 New Telecoms Operating Model
8.3.1 The Attraction of Infrastructure Multiples
8.4 5G Developments
8.4.1 5G Overview
8.4.2 5G – Relative Capex Investments and Frequency Range
8.4.3 5G OpenRAN
8.4.4 Beyond 5G
9 Telco Transaction Database
11 Copyright Notice
Philippines Telecoms Industry Report – List of Figures
Figure 1 – Telco sector revenue as % of GDP in the Philippines
Figure 2 –Revenue Profile Historical Mix (PHP m), 2014 – 2020
Figure 3 –EBITDA Profile Historical Mix (PHP m), 2014 – 2020
Figure 4 – Telecommunications Market Revenue, 2020
Figure 5 – Telecommunications Market EBITDA, 2020
Figure 6 – Telecommunications Revenue & EBITDA Share, 2020
Figure 7 – Total Telecoms Market Revenue and Growth Rate (PHP bn), 2018-2025
Figure 8 – Capex to Revenue Benchmark, 2014-2020
Figure 9 – Capex to GDP Ratio Benchmark, 2014-2020
Figure 10 – Telecommunications Capital & Operational Expenditure Spend, 2000-2025
Figure 11 – PLDT Service Revenue Mix, 2014-2020
Figure 12 – PLDT Historical Revenue Mix, 2014 – 2020 (PHP m)
Figure 13 – Globe Revenue Mix, 2014-2020
Figure 14 – Globe Historical Revenue Mix (PHP m), 2014 – 2020
Figure 15 – DITO Expected Capex Spend Distribution, 2019-2023
Figure 16 – Converge ICT Revenue Mix, 2016-2020
Figure 17 – Converge ICT Historical Revenue Mix (PHP m), 2016 – 2020
Figure 18 – Mobile Subscribers Share Comparison, 2014-2020
Figure 19 – Philippines Mobile Subscriber Share Comparison, 2014-2020
Figure 20 – Mobile Net Adds (000’s) Comparison, 2015-2020
Figure 21 – Mobile Subscribers Forecast, 2018-2025
Figure 22 – Mobile Subscribers by Generation Forecast, 2018-2025
Figure 23 – Mobile Revenue Forecast, 2018-2025
Figure 24 – Mobile Subscribers ARPU, 2014-2020
Figure 25 – Subscriptions per MHz of Spectrum, Select Asia-Pacific Countries, 2020
Figure 26 –Mobile Handsets Monthly Download Data, 2017-2020
Figure 27 – Data Pricing Trends in Asia-Pacific (US$ per GB per month), 2017-2020
Figure 28 – Ookla Mobile Speedtest Ranking Comparison
Figure 29 – Spectrum available for IoT in the Philippines
Figure 30 – Broadband Subscribers Share Comparison, 2014-2020
Figure 31 – Philippines Net-Adds (000’s) by Operators, 2015-2020
Figure 32 – Broadband Subscribers Forecast, 2018-2025
Figure 33 – Tower per Capita, 2019
Figure 34 – Estimated Tower Market Share, 2020
Figure 35 – Telecoms Providers EV/EBITDA Ranges
Figure 36 – 5G Network Slices Structure
Figure 37 – Effect of Frequency on Range
Figure 38 – 5G Capacity and Coverage Layers
Figure 39 – Relative Capex Required for 5G Network Infrastructure Investment
Figure 40 – Telecom Infra Project – OpenRAN Vision
Philippines Telecoms Industry Report – List of Tables
Table 1 – Philippines – Key Statistics
Table 2 – Telecommunications Market Revenue by Operators, 2014-2020
Table 3 – Total Telecommunications Market Revenue, 2018-2025
Table 4 – Historical Telecommunications Capex Spend, 2014-2020
Table 5 – Historical PLDT Service Revenue, EBITDA & Capex, 2014-2020
Table 6 – Globe Service Revenue and EBITDA Mix, 2014-2020
Table 7 – DITO Telecommunity Capex Investment Profile, 2019-2025
Table 8 – Converge ICT Service Revenue, EBITDA and Capex Mix, 2016-2020
Table 9 – Historical Mobile Subscribers, 2014-2020
Table 10 – Philippines Mobile Subscribers Forecast, 2018-2025
Table 11 – Historical Mobile Service Revenue, 2014-2020
Table 12 – Mobile Service Revenue Forecast, 2018-2025
Table 13 – Historical Mobile ARPU, 2014-2020
Table 14 – Mobile Frequencies by Operators and by Band (Mhz)
Table 15 – Historical Broadband Subscribers, 2014-2020
Table 16 – Historical Broadband ARPU, 2014-2020
Table 17 – Philippines Broadband Subscribers Forecast, 2020-2025
Table 18 – International Submarine Cable Systems with Landing stations in the Philippines
Table 19 – 4G Mobile Coverage & 4G Base Station Transceiver Count, 2014-2020
Table 20 – Technology Specifications (ADSL, FTTN, Fibre, 4G/LTE, 4G/LTE-A and 5G)
Table 21 – Telco Transaction Database, 2001-2020
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