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By Paul M. Icamina, Special Reports Editor
THE Philippines has been most innovative when it comes to cell
phones anywhere in the world.
“Because of unlimited text lately, we have
become the highest in terms of average text messages per
subscriber,” said Edgardo Cabarrios, director of the National
Telecommunications Commission (NTC) Common Carriers Authorization
Department.
The average user sends 15 to 20 text messages a
day, up from 10 text messages a day when there was no unlimited
texting.
Multiply that by 57.5 million Filipino texters
and you have at least 1 billion text messages a day.
“Perhaps China, because it is huge, is the
only one catching up with us,” Cabarrios said.
For all that, he believes telcos are not really
raking in all that money. “Malaking investment, so the high income
is not that much, although still in the billions of pesos,” he
explains.
To have an idea of how huge the market really is
consider that in 2007 Smart had revenues of P93.4 billion (up by 11
percent over the previous year) and a net income of P30.7 billion
(up 1 percent). Globe had revenues of P57 billion (up 4 percent) in
2006 and a net income of P12 billion (up 14 percent) in 2006.
Three major telcos earn about P77
billion—Smart P93.4 billion (P41.2 billion from text; Globe P57
billion (P26.5 billion from text); and Sun P16.8 billion (P10
billion from text).
Since 2000, Cabarrios said, mobile phone
subscriptions posted double-digit growth rates of more than 10
percent per year.
There were 57 million users last year—or about
two out of three Filipinos holding cell phones. Add to that more
than six million additional users this year.
That is based on the number of SIM (Subscriber
Identity Module, the tiny chip inside a cell phone) cards being
used, not the number of handheld units. That’s over 63 Filipinos
with access—and using—mobile phones, mostly for texting.
PLDT’s Smart had 20.7 million subscribers by
June 2008 while Ayala’s Globe had 14.5 million by August this
year. Sun Cellular of Digitel has about six million of the pie by
April. Next Mobile, Extelcom, umobile share a minute share of the
market.
Double digit
“The Philippines was the first country to have
double digit growth,” Cabarrios said. “That was in 2000 and
continuing till now.”
It started in 1999 when jokes first become
popular text messages— the phenomenon of passing along the same
joke nationwide. “Akyat bigla ang cell phone users, forward ng
jokes dito, forward duon,” recalls Cabarrios, an electronics
engineer who has been with NTC since 1981.
In 2000, the Philippines was also the first
country where mobile phones exceeded the number of fixed lines. Five
million cell phones users suddenly overtook 3 million landlines.
By 2008, there are 57 million mobile phone
users, against 3.6 million landlines installed. Fixed lines cover 58
percent of towns and cities while mobiles phones cover 90 percent of
the population.
“Because of the text phenomenon, nauna
tayo,” Cabarrios said.
“And it is the reason why the SMS content
industry nabuhay, including ring tones, applications like e-load and
mobile banking, dito nag umpisa.”
E-loads are not that popular in industrialized
countries where users pay on monthly or yearly plans, Cabarrios
said, but it is big business here and in the developing world.
“Malaking negosyo, with retailers all over the
country,” he said. “Other countries are also cashing in, like in
Malaysia and Thailand.”
Small businesses use mobile phones to resell
prepaid cards and loads. Smart, for example, has a network of over
400,000 retailers nationwide. An agent gets a 15 percent commission,
or P15 per P100 worth of load.
Smart’s “Pasa Load” allows the transfer of
as small as a P10 load, at a cost of P1 to the sender, within the
network.
Nearly 95 percent of mobile phone users are
“pre-paid” customers— they buy “loads” instead of paying a
“post-paid” monthly bill.
“Mobile banking is not really taking off here
because of the low confidence in e-banking as in e-commerce,” he
said. “It is a problem of confidence in the network, especially
with credit card data.”
Still, more than 5.5 million Filipinos now use
mobile phones to load airtime; transfer money; pay electric, water
and other bills; and send remittances.
Telcos have also brought banking and
micro-credit services to many Filipinos who have no bank accounts or
live in places where there are even no banks.
Smart Money, for example, has now over 7 million
subscribers while Globe’s GCash has 1.5 million customers.
Tax
All these only after seven years when Smart
started prepaid cell phone loads in 2000. There are now about 5
million Smart Money and Smart Remit users.
Now its m (for mobile)-education and
m-governance, Internet, data and soon mobile TV. IPTV—mobile
broadcast and Internet in one—is coming in two years.
The government, meanwhile, plans to tax half of
the income from text messages—a move understandably opposed by
telcos. They argue it limits expansion plans and sends the wrong
signal to investors, threatening to raise text rates to maintain
profit margins.
TXTPower, a consumer group opposed to text tax,
says the government already collects a 12-percent tax on all calls
and text messages.
Estimated to be worth P73 billion in yearly
government
revenues, the tax is specifically allotted for health and education.
In September, the Supreme Court upheld the
decision in 2002 of Davao City to impose a .75-percent local tax on
annual sales on telcos operating within the city—a precedent for
other local governments.
Telcos argued that they possess a legislative
franchise granted to a corporation which should be regulated by the
national government.
Since Smart, for example, posted gross revenue
of P70.1 billion last year, this could mean P350 million in local
taxes if all local governments impose the same tax.
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