Growing mobile data usage boosting telecom revenues

MANILA, Philippines - The increasing use of mobile devices to access the Internet offers new opportunities for telecommunication firms Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom Inc.  to grow more. 

Suraj Moraje, managing partner at global management consulting firm McKinsey & Co. said in an email the move of PLDT and Globe to focus on data services and content is in line with what most telco firms are doing globally. 

Such move is driven both by opportunity and by necessity as consumers are spending more time on communication through a form of data service such as email and social apps including Facebook, Viber, and Line. 

 “Equally true, over the past years, revenue growth from more traditional voice and text services have slowed (and even declined in some places) as penetration stops growing and usage elasticity falls. Therefore, operators need to seek new areas to grow,” Moraje said. 

PLDT, the country’s largest telecommunications provider, has allocated $100 million on top of its record P43 billion capital expenditures this year, to invest in digital assets meant to address the changing needs of consumers. 

The company which has already started new digital initiatives by offering free access to social apps such as Instagram and Facebook and entering into content partnerships with iflix and Fox International Channels to provide shows, is putting more focus on enhancing its subscribers’ digital experience as revenues from international and national long distance calls are seen to continue to decline.  

PLDT chairman Manuel Pangilinan said earlier the new focus would “involve build out of our 3G and 4G/LTE networks, enhancing network resiliency to ensure operational reliability, stability and quality of service, revamp of our service development platforms to handle more data-centric offers, and re- organization of our branding across the board with a view to positioning each brand better and optimizing the value of each brand.”

As of the first semester this year, PLDT’s total data and broadband revenues grew 13 percent to P23.02 billion from P20.40 billion a year ago. 

Globe is likewise looking to provide more digital offerings to subscribers as it recognizes the impact of the consumers’ digital lifestyle to its earnings. 

Dan Horan, senior adviser for consumer business at Globe said consumers can expect new propositions in the digital space in the coming months following the company’s GoSurf offers to allow subscribers to get free gaming, access to Facebook as well as music streaming service Spotify and tie-ups with Disney and Hooq.

Globe’s mobile data revenues reached P9.5 billion as of end-June this year, 53 percent higher than the P6.2 billion reported a year ago, while its broadband revenue stood at P7.6 billion.

As consumers spend more time online, Moraje said it is estimated there will be 11 billion data-enabled devices with each subscriber consuming an average of eight gigabytes per month by 2020.