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By Darwin G. Amojelar
Broadband Internet service in the
Philippines continues to be on the priority list of many local
telecommunications companies as it will be the emerging focus of
competition nowadays, according to the International Data Corp. (IDC)
Philippines said.
The IDC projected that the
Philippines’ broadband services market will grow at 23-percent
CAGR (compound annual growth rate) in terms of subscribers and at 21
percent in terms of revenues over the next five years.
IDC expects annual revenues to
reach $239 million in 2010 from $91 million in 2005.
Total number of broadband
subscribers, on the other hand, is seen to grow from 165,000 in 2005
to 475,000 by 2010.
According to IDC, initiatives
from technology suppliers have been key to spurring interest in
wireless broadband among operators. Furious growth in technology
improvements and trials are also key to fast paced development in
the wireless broadband space.
“Looking forward, IDC sees the
wireless broadband offering to be the next area of competition among
the Internet access service providers in the Philippines,” the
research firm said.
Furthermore, the Internet access
services market remains to be a dynamic telecommunication segment in
the Philippines.
Data from the National
Telecommunications Commission (NTC) shows that there were an
estimated 1.44 million subscribers in 2005 compared to only 1.2
million in 2004.
“Dial-up continues to be the
most popular Internet access service, though broadband access,
particularly ADSL [Asy-metric DSL], is on the upswing,” IDC said.
With the rising popularity of
Internet broadband in the country, IDC sees the entry of more VoIP
service offerings to drive the market’s growth in the Philippines
over the next five years.
VoIP is a much less expensive
alternative to traditional telephony, which transmits voice via the
Internet.
Connectivity
Manuel V. Pangilinan, PLDT
president, has said that the onset of broadband products, services,
applications and solutions will raise consolidated revenues for PLDT
in the coming years by double digits.
“It is our aim to make
broad-band access widely available in both our fixed and mobile
networks,” Pangilinan said.
“Connectivity was our game. In
the future, it will increasingly become: connectivity plus—meaning
connectivity plus value-added services. The reason for this is
simple: connectivity will eventually become a commodity,” he said,
adding that the company’s competitive advantage will increasingly
come from value-added services.
Pangilinan further said that PLDT
also worked to improve its physical strengths. “We’re now
shifting our core network from circuit-switches to packet-switch
technologies. Our move to Internet protocol-based systems or next
generation networks (NGN) will give us the flexibility to offer a
wide array of innovative products and services at lower cost,” he
added.
Napoleon Nazareno, president and
chief executive officer of both PLDT and Smart, believes that the
company’s growth will come from broad-band services.
He also projected that the
company will have one million Internet broadband subscribers in
three years as it focuses to upgrade its network to NGN.
NGN is the latest technology for
voice and multimedia communications based on open architecture
design made possible through Internet protocol (IP) technology.
Nazareno said his company will
spend about P7.7 billion for NGN expansion or 35 percent of the
total capex this year at P22 billion.
For this year, PLDT will install
600,000 to 700,000 NGN lines from an initial rollout of 150,000 in
2005.
The company’s expansion and
upgrade of NGN is in line to enhance PLDT’s voice and data service
offerings.
“Our ability to stay ahead in
the broadband revolution is particularly important for the fixed
line business as it enables us to manage the transition from
traditional voice services to other revenue streams that can deliver
growth for the future,” Nazareno said.
“We expect NGN to have stronger
contributions in 2007 and the coming years,” Nazareno said.
He said Internet users surged
from 3.4 million in 2005 to nine million last year. About half of
the nine million access the Internet through Internet cafes.
Gerardo C. Ablaza Jr., Globe’s
president and chief executive said the bulk of the company’s
capital expenditure amounting to $350 million will fund its future
growth such as broadband and wireless business.
“Capex for 2007 will grow
relatively in 2006 as we invest in broadband for future growth,”
Ablaza said.
Of the total capex this year,
$190 million is for the infrastructure rollout of its broadband
business and 3G (third generation) High-Speed Down-link Packet
Access and the remaining $160 million will invest to expansion of
the company’s 2G business.
“Our ambition is to trigger
mass adoption of broadband Internet services in the country,” he
said adding that the company will focus on the class D and E market,
small entrepreneur and large market. 
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