Telecommunications Equipment
Philippines
Overview
(In $ Millions)
2004 2005 2006 (estimated)
Total Market Size 1.34 billion 1.19 billion 1.30 billion
Total Local Production 2.99 billion 2.46 billion 2.40 billion
Total Exports 2.99 billion 2.46 billion 2.40 billion
Total Imports 1.34 billion 1.20 billion 1.40 billion
Imports from the U.S. 45 60 75
(Note: 2004 and 2005 are actual figures taken from National Statistics Office. 2006 estimates are based on interviews with industry experts. Local production is limited to assembly of minor parts, which are re-exported to other countries).
The telecom industry remains one of the more robust sectors in the country. Global trends determine the path local industry will take in the next three years. The only question is the pace by which the country adapts to these global trends. Currently, wireless telecommunication systems dominate the market with a 40% penetration rate while fixed line has 4% penetration. In terms of coverage area, wireless reaches 84% of the country while Public Switch Telephone Network (PSTN) reaches 58%. Industry experts project that, despite the aggressive marketing strategies of telecom operators to boost the sagging fixed line services, the cellular mobile telephone system (CMTS) will remain the country’s digital device of choice as opposed to landline systems.
Broadband subscribers posted an astounding growth in 2006 as consumers gain better understanding of the benefits of broadband services. Aggressive marketing campaigns of the telecom carriers paved the way for increased consumer awareness, leading to more demand. Reduced broadband rates is another major growth driver. Stiff competition among providers made the service more affordable.
ADSL (Full Rate asymmetrical DSL) and VDSL (very high bit rate DSL) and Fiber to the Curve (FTTC) are currently deployed in the country. ADSL is dominant because of its affordability compared to VDSL. All carriers have FTTC, which goes only until the distribution point. Fiber to the Home (FTTH) is not available. WiFi & WiMax are likewise available, with WiFi as the preferred technology.
Cellular communications dominate the Philippine telecommunications industry with mobile subscribers hitting 35 million in 2005, while fixed line subscribers languished at 3.3 million for the same period . The National Telecommunications Commission (NTC) estimates mobile subscribers went past the 40 million mark in 2006 while the fixed line remains at more or less the same level. NTC only expects single-digit mobile penetration growth in 2007. They predict broadband to dominate growth numbers in the sector.
Best Products/Services
- Wireless Communication Equipment
- Broadband Technology
- Innovative Applications
- VoIP Technology
Opportunities
Opportunities in the industry would be in value-added services, content, and innovative applications for wireless and broadband. Telecom carriers have likewise announced their commitment to improve their 3G technology, investing millions of dollars in perfecting the 3G rollout which began in 2006. Two major infrastructure expansion projects were recently announced – fiber-optic backbone expansion in Mindanao and submarine cable systems.
The Telecoms Infrastructure Corporation of the Philippines (TelicPhil), a consortium of the largest telecom companies in the Philippines (BayanTel, Globe, Digitel, and Smart), has earmarked $1.8 million for the expansion of the country’s second-largest fiber-optic backbone to augment Mindanao’s telecom capacity. Hong Kong-based Asia Netcom, on the other hand, has announced plans to add a new trans-Pacific portion to its regional submarine cable system. Dubbed EAC Pacific, the new 23,500-kilometer infrastructure will extend system with a new trans-Pacific ring.
For the broadcast industry, The NTC, in cooperation with the “Kapisanan ng mga Brodkasters sa Pilipinas” (Association of Broadcasters of the Philippines, or KBP), and the two major television networks, GMA Network, Inc. and ABS-CBN Broadcasting, formed a technical working group to prepare the “standards” for digital transmission.
While the NTC will not proceed in the recommendation of a specific standard, the stakeholders (broadcasters) will be requested to give final recommendations and a comprehensive justification. The broadcasters are currently conducting studies and tests on available standards. NTC aims to complete 100% migration to digital by 2010.
The U.S. Advance Television Systems Committee (ATSC) is actively monitoring the Philippine situation and advocating the U.S. digital TV standard. If this is adopted by the local industry, this opens up significant opportunities for digital set-up boxes and digital broadcast equipment.
The continued exponential growth of the Business Process Outsourcing (BPO) industry will also have positive effects on the telecom industry.
Resources
For additional information on telecommunication policies and technology update, please refer to the National Telecommunications Commission (NTC) - http://www.ntc.gov.ph
Aida L. Miranda, Sr. Commercial Specialist
U.S. Commercial Service, Philippines
Email: Aida.Miranda@mail.doc.gov , Manila.Office.Box@mail.doc.gov