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By Darwin G. Amojelar, Reporter
THE price war among telecommunication companies will accelerate to
stimulate mobile phone use amid weak consumer spending due to the
current economic crisis, the International Data Corp. (IDC) said.
The research firm cut its forecast growth for
the Philippine telecom services market, saying compound annual
growth rate (CAGR) in revenue terms over the next five years would
slow to six percent and end 2012 at $5.06 billion.
The IDC earlier forecast a CAGR of 11 percent
for the 2007 to 2011 period.
At end-September, the country’s four leading
telcos reported combined revenue of P164.51 billion. Of this amount,
Philippine Long Distance Telphone Co. earned P105.59 billion, while
Globe Telecom Inc. had P46.62 billion. Digital Telecommunications
Phils. Inc. generated P7.7 billion while Bayan Telecommunicaions
Inc. had P4.6 billion.
The research firm said the market performed
strongly last year, reaching $3.77 billion or 12 percent
year-on-year growth in annual service provider revenue.
“Competition will intensify further and
pricing will be one of the early playing fields,” Karen Rondon,
IDC Philippines research manager for communications said.
Eventually, competition will extend beyond
pricing in significant levels and product differentiation will
become increasingly important, she said.
“Factors such as service quality, reliability,
ease of use, content and customer service will start to heavily
matter to end users in choosing services and [service providers],”
she added.
Austrialia’s Ovum earlier said telcos in Asia
and the Pacific should focus more on affordable pricing strategies
to attract more subscribers.
“As customers tighten their belts they will be
looking for better value for money. This will require telcos to
target their product development and pricing strategies more
carefully to address different customer segments,” the research
firm said.
Ovum expects 2009 to be a challenging year for
the Asian telecom industry due to the financial market turbulence.
“Telcos in the Asian region were already
facing many challenges,” David Kennedy, Ovum research director for
Asia-Pacific had said.
Manuel Pangilinan, PLDT chairman, said the
challenge for next year is keeping consumer spending up.
Next year is “likely to be a tough year”
because of the global economic condition, he said.
Delfin Gonzales, Globe chief financial officer,
said consumer behavior is shifting to more affordable “bucket”
load packages.
With the change in consumer behavior, the
company’s goal is to drive brand loyalty to manage the churn level
while keeping subscribers, he said.
At end-September, the average monthly churn rate
of Globe postpaid subscribers stood at 1.65 percent, while that for
prepaid stood at 5.42 percent. Sister-brand Touch Mobile (TM) had a
churn rate of 6.52 percent.
Rival Smart Communications Inc. of PLDT also
posted higher churn rates of 1.3 percent for postpaid subscribers
and 4.6 percent for prepaid subscribers. Its sister-brand Talk ‘N
Text had a churn rate of 4.7 percent. Churn is telecom jargon for
the number of subscriber disconnections, or those migrating to
another type of service or to competitors.
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