EconomyEditor's PickPHL fixed-line telco market projected at $4.7B in 5 years

November 3, 2021

THE MARKET for fixed-line telecommunications services in the Philippines is projected at $4.7 billion by 2026, equivalent to a compound annual growth rate (CAGR) of 5%, from a starting point of $3.6 billion this year, according to estimates by the UK’s GlobalData.

The increase will be driven by the “strong growth” in the fixed broadband segment, GlobalData said in a statement on its website.

Fixed broadband services revenue is expected to post CAGR of 6.3% during the 2021-2026 period.

GlobalData sees “healthy growth” in broadband subscriptions as well as rising broadband average revenue per user (ARPU).

Meanwhile, the fixed-line voice service market is expected to post CAGR of 1.6% over the 2021-2026 stretch. GlobalData noted a “drop in circuit switched subscriptions and a significant decline in fixed voice ARPU levels.”

“DSL (digital subscriber line) lines will remain the dominant fixed broadband technology with 36.7% share of the total fixed broadband subscriptions in 2021, but will gradually lose its market share over the forecast period,” according to Hrushikesh Mahananda, a telecoms analyst with GlobalData.

“Fiber broadband lines, on the other hand, will increase at a robust CAGR of 17.2% over the forecast period, supported by government and operator investments in fiber network infrastructure and FTTH (fiber to the home) service expansions,” he added.

PLDT, Inc. is expected to lead the fixed-line voice services segment in terms of subscriptions through 2026.

“The operator will also top the fixed broadband services market, by subscriptions, supported by its strong position in DSL and FTTH service lines,” Mr. Mahananda said.

PLDT has said that it increased its fiber infrastructure by 22% to 524,000 kilometers in the first six months of the year.

On the other hand, Globe Telecom, Inc. is expected to “retain its leadership” in the mobile telecommunications market, GlobalData Telecom Analyst Harika Damidi said.

The mobile services market is expected to increase at a CAGR of 5.6% to $5.4 billion in 2026.

This is primarily “due to the rising adoption of mobile data services,” GlobalData said in a separate statement.

“Mobile data revenue will grow at the fastest CAGR of 6.6% between 2021 and 2026, due to growing 4G subscriptions and the planned rollout of 5G services,” it said.

“Mobile voice revenues will increase at a relatively slow CAGR of 3.2% over the same period as voice ARPU decreases further,” GlobalData added.

It expects the average monthly mobile data usage to rise from 3.7 GB (gigabyte) this year to around 4.8 GB in 2026.

The increase is expected to be driven by the rising consumption of high-bandwidth online video services and social media content via smartphones.

“4G subscriptions will surpass 3G in 2021, driven by the ongoing 4G/LTE network expansions and increase in the availability of 4G-enabled smartphones. 5G services, on the other hand, will account for a 22.5% share of the total mobile subscriptions by 2026 end,” GlobalData’s telecom analyst added.

In a statement Wednesday, Globe Head of Consumer Mobile Business Darius Jose Delgado said: “These latest findings are aligned with our efforts to bring first-world connectivity to more Filipinos to further enrich their digital lifestyle.”

“We foresee this rapid digitization to continue beyond these pandemic times, thus our ongoing efforts to increase our 4G LTE footprint and expand our 5G network,” he added.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Arjay L. Balinbin

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