MANILA, Philippines — Wireless giant Smart Communications Inc. expects its subscriber base to start widening again around the end of the year, at least a quarter after the deadline of SIM registration.
Smart first vice president and head of prepaid marketing and corporate strategy Lloyd Manaloto told reporters the firm projects its customer base to resume growing by the fourth quarter.
Afterward, he said the prepaid segment would return to expansion mode next year once the impact of SIM registration on telco operations dies down.
“I think it will be a cleaner base (for Smart), that is what is going to happen. It is a more efficient base. One quarter after, it starts to improve. Next year will be a better year for us because, in the end, SIM registration is a disruptive activity,” Manaloto said.
Smart incurred a two percent decrease in its subscriber base to 65.03 million in March 2023, from 66.3 million in December 2022. During the period, telco players have started requiring subscribers to register their SIM as mandated by law.
Despite this, Smart improved on one of the most critical metrics in evaluating the viability of its operations, the average revenue per user (ARPU).
The ARPU is obtained by dividing the gross revenue by the total number of subscribers, showing how much average income a telco provider is getting from each of its customers.
Between December 2022 and March 2023, ARPU rose by P2 to P107 for Smart, while it grew by P1 to P86 for low-cost option TNT.
“It (SIM registration) will have an initial decline primarily first on the subscriber base, but it will also in a way make operations more efficient. ARPU is going to go up,” Manaloto said.
“That is what we are seeing in Smart. More or less our revenues are flat, they are not declining, (and) over time we will see them increase if we follow the pattern in other countries,” he added.
Smart removes a customer from its subscriber base if he/she fails to reload within 120 days after the last top-up, allowing the firm to get a full picture of its active network.
Under Republic Act 11934, or the SIM Registration Act, subscribers are provided until April 26 to enlist their mobile numbers, but the deadline was moved to July 25 to give more time for those who have yet to register.