Philippines Telecoms Industry Report - 2024-2031

The Philippines Telecommunications Industry Report, 2024-2031 includes an overview of the Philippines market dynamics, market sizing, market forecasts, analysis, insights and key trends.

Philippines Telecoms Industry Analysis Report at a Glance

What to Know: The Philippines’s telecommunications industry has been dominated by the PLDT-Globe duopoly over the last two decades. Recent reforms and the launch of a third mobile operator will bring competition and innovation in the sector.

Why it Matters: Telecommunications infrastructure investments have more than tripled with the arrival of DITO Telecommunity amd Converge ICT to the scene.

The publisher forecasts that mobile subscriptions will continue to grow in the 2023-30 period and fixed broadband subscribers will also continue to grow strongly and increase its household penetration over the same period.

Expanded coverage, greater affordability, service improvements, increased data usage and smartphone penetration are the main drivers of growth in the telecoms sector. The country continues to expand its fibre-optic network and 4G coverage, backed by strong investment in capital expenditure. Investment in the telecoms sector grew to its highest in 2021 with new mobile market entrant DITO Telecommunity launching that year.

Go Deeper: The publisher expects the overall telecoms market to grow strongly through to 2030 despite the SIM registration process in 2023 which lead to a loss of mobile subscribers in 2023.

Capex Investments

The Capex to GDP ratio remained relatively stable between 2014 and 2018 but soared in 2019. The publisher estimates that the ratio will settle back by 2024 peaking in 2021. Both PLDT and Globe are investing heavily in 4G and 5G with PLDT playing catch-up by investing in its network expansion while Globe refocuses on its fixed broadband business after stagnating in 2021. The publisher forecasts an above-average Capex to sales ratio until 2023 while DITO Telecommunity ramps up its mobile network investments.

Mobile Subscribers and Revenue

The publisher forecasts a decline of mobile subscribers in 2023 and strong in the fixed broadband segment. We expect that the number of mobile and broadband subscribers will continue to rise steadily to 2030 from 2024 onwards.

Mobile network operators are facing competitive pressure with the market shifting to unlimited voice and text and data allowance becoming now the sole offering differentiator.

The publisher benchmarked mobile data pricing across 8 countries in the Asia Pacific region and found that the Philippines is lagging behind in terms of data download but we expect the country to catch up as 4G coverage is accelerating and smartphone penetration is increasing especially in regional areas.

According to our benchmark study of mobile data pricing, India has the lowest rate per GB at just a few cents per GB, while Australia and China had the biggest cost reduction per GB mostly due to increased data allowance in plans while Singapore remains expensive. The Philippines' pricing is on par with Thailand's when benchmarked against neighbouring countries.

Broadband Subscribers - FTTH Push and Fixed Wireless

The Philippines fixed broadband was very much a laggard compared to other ASEAN countries which have invested more heavily in Fibre-to-home infrastructure. PLDT’s FTTH penetration is much lower than in other countries such as Indonesia, Malaysia or Thailand. After initially focusing on fixed wireless access, Globe shifted its strategy back to FTTH, but remains behind PLDT and Converge ICT. Other efforts from Radius Telecom (part of Meralco) remain small in scope and so far targeting only wealthy gated communities areas of Metro Manila, other large cities or new developments. The biggest growth after PLDT was Converge ICT which is performing very well.

Thematics - Telecoms Infrastructure/5G/M&A/e-Commerce

The Philippines is a sleeper market for mobile infrastructure, this is largely due to the cosy monopoly enjoyed between Globe Telecom and Smart (PLDT) over the last two decades and also due to the massive red tape required for building a mobile tower. The announcement of the third telco player ignited the market for tower sharing together with the DICT pushing a policy to build over 50,000 new towers shared across the industry, attracting a new category of infrastructure investors that were not participating in the market until now. New tower-build accompanied by fiberisation of the latter will boost the country’s telecoms infrastructure and will most welcome in the market after two decades of under-investments in the Philippines market.

Mobile operators and specialised towercos are rushing to sign deals but we doubt Globe and Smart will share any existing assets in a hurry unless they are forced to by the regulator.

Most towercos are greenfield operations and are each planning to build about 1,000 to 5,000 towers over the next three years. A large number of new entrants with over 20 towercos signed an MoU with DICT to participate in the build of 50,00 new towers.

The Philippines has one of the lowest ratios of mobile towers per capita and the highest numbers subscribers per base transceiver stations (BTS) in the Association of South-East Asian Nations (ASEAN) region.

Investment funds are assigning high valuation multiples to telecommunications infrastructure assets such as mobile towers, data centres, submarine cable and fibre infrastructure. This report outlines some real market examples of how investors view and value these investments with industry examples and EV/EBITDA comparatives and benchmarks.

Most telecommunications operators are in heavy investments phase both in fixed and mobile segments, spending heavily upgrading their 4G network infrastructure. The publisher expects a wave of towercos consolidation in the Philippines but not before 2024-2025, as margins get squeezed further before a new Capex cycle kicking off with 6G by 2030.

The arrival of 4G moved the Internet off our desktops into our palms and pockets, 5G could transform the network from something we carry around to something taking us around either virtually (augmented reality or virtual reality) or in reality (autonomous vehicles), the 5G outcome and benefits beyond fast connectivity remain largely unknown in terms of business models, investments required and timeline.

The increase in smartphone penetration made possible by the availability of low-cost devices has triggered growth in e-commerce, tapping into the potential of the Philippines’s emerging middle class with relatively high disposable income.

Why You Should Buy The Philippines Telecoms Analysis Industry Report:

• Benefit from the latest market opportunities
• Understand the threats to your operations and investments and protect your company against future risks
• Gain insight on emerging trends that could support, strengthen or disrupt your activities in the market
• Get a full view of the competitive landscape to assess your market position.
• Forecasts as a key input for successful budgeting and strategic business planning in the telecoms market
• Target business opportunities and risks in the telecoms sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments
• Assess the activities, strategy and market position of your competitors, partners and clients via our Operators Profiles.