050807: Potential telco market: 15M

By Lenie Lectura

Reporter

THERE are still 15 million potential wireless subscribers that mobile phone firms can continue courting before the wireless penetration rate hits 60 percent by 2010, Globe president Gerardo Ablaza said Monday. The country’s second largest cellular operator said mobile penetration rate stood at 49 to 50 percent at end-2006. Given the level of penetration at 49 percent, Ablaza said this indicates that by 2010, cellular penetration rate could well get into the vicinity of about 60 percent, representing about 58 million subscribers. “So between 2006 and 2010, we could very well see incremental SIMs (subscriber identification module) of as much as 15 million. So that’s not a small number. The challenge is to make sure that these SIMs continue to be at a level of average revenue per user,” he said in an interview. Globe closed the first quarter with a cellular subscriber base of 16.9 million, as it added 1.3 million new subscribers during the first three months of the year from 15.7 million at end-2006. Ablaza said that 80 percent to 85 percent of the company’s wireless subscribers are considered “unique” subscribers with the remaining 15 to 20 percent having more than one SIM card. “Based on our latest pulsing, we have between 15-percent and 20-percent multiple SIM usage of our total cellular subscriber base,” said Ablaza. Postpaid subscribers account for about 5 percent of the cellular subscriber base, but they contribute about 20 to 23 percent of the revenues. The prepaid subscribers make up 95 percent of the base, and contribute the revenue balance of about 77 percent, said the Globe official. “Short messaging service [SMS] base revenues are between 40 percent and 45 percent, but within that 45 percent as much as 90 percent are still person-to- person SMS, 10 percent is value-added service,” said Ablaza. The joint venture between Ayala Corp. and SingTel earns P0.25-per-text-message sent. Currently, it handles an average of 300 million text messages  daily. To prevent Globe subscribers from switching to other networks, Ablaza said the company continues to offer more services to strengthen ties relationships with its customers. “Each of our subscribers has a different set of needs. It is very important to have the right combination of tariffs or pricing with the services that are relevant to each of those segments, as well as the ability to communicate in different ways with those segments,” he explained. The company spent a total of P 3.1 billion in capital expenditures (capex) in the first quarter, as part of its programmed spending of P17 billion, roughly $350 million, for this year, up from the P14.8 billion that Globe spent in 2006. Of the amount, $190 million is earmarked for broadband services and the remaining will be spent to bankroll the rollout of its 2G (second generation) network. Ablaza said Globe will spend almost $190 million for broadband services next year. The company is also investing in the back-end facilities needed to support its broadband thrusts and to meet the growing demand for international bandwidth. Globe will participate in a new cable project spearheaded by VSNL International, a member of the Tata Group of India, which will set up a trans-Asian submarine cable system that will link the Philippines to Hong Kong and Singapore, with connectivity via the TGN Pacific network to Japan, Guam and the United States. Globe will be the exclusive landing party in the Philippines to this cable system, expected to be completed by the second half of 2008. Total estimated cost to Globe is about $90 million, including the costs of capacity within Asia and the US, a new landing station, and domestic backhaul. Globe’s net profit in the first quarter declined by 25 percent to P2.6 billion, mainly due to the prepayment of a $300-million bond it made last month. “The momentum in the first quarter continued in April. We hope this will continue in the second and third months of this quarter,” said Ablaza.

 

http://www.businessmirror.com.ph/05082007/headlines07.html