The rise of the mobile phone in the Philippines
Much is often said about the prominence and importance of mobile in Asia. The region lacks the high-level of fixed-line telecom infrastructure and investment which Western markets have seen, and continue to see, so it is of little surprise that mobile – a medium better suited to providing access and services to geographically challenging areas – has thrived and stepped in.
The below analysis, taken from Developing Telecoms, gives an excellent account of the growth of mobile in the Philippines, a market known for being the biggest user (per person) of SMS, an indicator that fixed-line adoption has been slow.
Despite considerable effort over the last decade or so, the government of the Philippines, working with the country’s telecom operators, has not succeeded in its efforts to extend the basic fixed-line telephone network to reach the wider population.
Fixed-line teledensity stands at less than 5%; only a little more than half of all Philippine towns and cities have a telephone service. A fixed-line teledensity of 12% by 2002 was the original target set for the government as part of its Service Area Scheme. The plan fell well short of target and since then fixed-line penetration has remained relatively static.
The country’s mobile market has been a totally different story.
No doubt contributing to the problems experienced in the fixed-line sector, the Philippines has witnessed a strong focus on and a rapid take-up of mobile services. Mobile penetration has grown quickly to reach the significant 80% milestone, 73 million subscribers by early 2009, up from just 6 million in 2000.
The continued growth has confounded the market; there have been times when the mobile sector in the Philippines looked to have reached a plateau, but then it found a new way to grow. Of particular note in this mobile market has been the remarkably high national usage of SMS. The country is ranked number one globally in SMS usage.
The other chief characteristic is the high level of prepaid users (more than 95%). The mobile phone has certainly captured the imagination of the population; not surprisingly, mobiles have well and truly overwhelmed fixed-line services.
A large proportion of the recent growth in mobiles has also been coming from outside the main city of Manila, with the big operators, Globe and Smart, vigorously competing for lower income segments of the population by offering a range of cheap prepaid products. And whilst the big two operators battle it out, the third ranked operator, Digitel, has been quietly building up its own subscriber base and grabbing market share.
Further growth in the mobile market will depend on the pricing and marketing strategies of the operators, and, most importantly in the wake of the 2008 global downturn, the growth level in the Philippine economy. The view is that growth will ease over the next year or two. There is also a lot of interest in the take up rate for embryonic 3G services.
Such a heavy reliance on mobile makes the Philippines a prime target for smartphone vendors, with the country one of many promising developing markets in Southeast Asia alongside Indonesia, Malaysia, Thailand, Vietnam amongst others.
Not mentioned in the article, but inextricably linked to mobile usage, is the use of mobile internet in the Philippines as Filipino blogger Tonyo Cruz pointed out earlier this year:
The Philippines is 10th among all countries using mobile internet, according to admob.
An extension of the country’s heavy usage of social media is a raft of SMS-based social network aggregators who allow mobile users to update services like Twitter, without evening needing to connect to the internet as Cruz points out in this post on his Asian Correspondent blog, Bullet Points.
The Philippines’ market, and its use of the internet, is as mobile as it gets in Asia and arguably across the world.