Philippine telecoms spending to reach $2.5B in 2003

By Rosary Grace Sarmiento

Computerworld Philippines

Spending for telecommunication products and services in the Philippines is expected to reach US$2.5 billion by the end of 2003, a 12 per cent rise from the US$2.3 billion registered in 2002, according to IT research and consulting firm IDC Philippines.

Almost half of the total telecom spending for the year will come from the mobile market, disclosed Selinna Chin, IDC managing director for Malaysia, Indonesia and the Philippines, during a recent press event to formally launch IDC’s wholly-owned subsidiary in the country and the 14th in the Asia-Pacific region.

The fastest growing telecom segment in the country, the mobile market is forecast to grow by 39 per cent this year, accounting for US$1.67 billion of the total telecom spending for 2003. A substantial portion of this figure will be derived from prepaid services, which currently represent 95 per cent of the total mobile market.

“The local mobile market is not about to go flat in the next couple of years. In fact, the mobile subscriber base in the Philippines continues to grow by an average of four million a year,” Chin noted.

Mobile phone users in the country are estimated to reach 19.5 million by December 2003, a four-million increase from 2002’s 15 million. By 2004, this mobile subscriber base is expected to reach 23 million. Apart from the regular voice services and short messaging services (SMS), multimedia messaging (MMS) is seen driving consumer spending for mobile services. In fact, among the countries in the Asia-Pacific region, the Philippines is noted to have attained the most comprehensive management of MMS content. The country’s mobile carriers handle a volume of more than 2,000 MMS messages per month, while Singapore handles only about 250 multimedia messages monthly.

Aside from the mobile market, non-voice services such as Internet access network services are boosting local telecom spending. Growing by 25 per cent this year, non-voice services are expected to account for US$255 million of the total telecom spending in 2003.

Chin attributed this impressive growth to the increasing take-up of frame relay and digital subscriber line (DSL). In the coming years, IDC predicts that IP-VPN (Internet Protocol–Virtual Private Network) will also be significantly driving the non-voice fixed line segment.

For this year, managed data services and leased lines are both leading in the network services space, with growth rates nearing a hefty 70 per cent. Also noteworthy is the rise in broadband services take-up, which has grown 50 per cent this year. IP-based managed services are also on the upswing, showing a strong 40 per cent rise over the previous year.

As for the public switched telephone network (PSTN) market, Chin said that although the growth of the fixed line business has remained relatively flat, the segment is still seen contributing US$611 million to total telecom spending this year.

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