020609: Recession or not, Pinoys still spending for cell load

 

Written by Lenie Lectura / Reporter

FRIDAY, 06 FEBRUARY 2009 00:41

DESPITE the challenging times, Filipinos continue to set aside funds for mobile phone load credits. “Telecommunications will be one of the last to go. In fact, some people say maybe food is not actually the last to go [in the Filipinos’ spending preferences] and that transportation would be the last option because people need to get to their jobs. But I really think that telecommunications services will be one of the last to go [in the consumption pie],” said Globe Telecom president Gerardo Ablaza.   This view is consistent with the dynamics of our society since practically every Filipino has a relative working overseas, said the Globe executive. “They need to get in touch with their families and friends and the only way to do that is to call them.” Telecommunications services, said Ablaza, account for about 7 percent of the country’s gross domestic product (GDP), or the total market value of all final goods and services produced in a year. “We haven’t done a direct correlation between inward remittances and our own revenue performance. But we do know that telecommunications services account for a certain percentage of GDP. GDP, in turn, is partly driven by the flow of remittances because these remittances pay for consumer purchases. But we haven’t established the direct correlation in remittances and telco consumption,” explained Ablaza. The telco industry, said the Globe official, is closely watching how consumers will spend their income especially during these hard times. But one thing is sure Globe and other mobile phone operators doubt they can match last year’s subscriber growth. This year, they plan to focus on improving revenues while being cautious on how the economy will perform this year and how consumer purchasing power will develop. Globe added 1 million new mobile phone subscribers last year, ending 2008 with a subscriber base of 24.7 million from 20.3 million in 2007. Globe’s mass market brand, Touch Mobile, led the growth, accounting for 70 percent of the 4.4 million net additions in 2008. Despite a 22-percent increase in the number of wireless subscribers in 2008 as against 2007, Globe’s revenues from wireless went down by 1 percent to P55.6 billion driven by lower activity levels due to the weaker consumer environment and increasing incidence of multi-SIM (subscriber identification module) use. “We can not say for now what it would be like this year, but growth in subscriber takeup will not be the same as last year when we added 4.4 million new subscribers in the network,” said Ablaza. At end-2008, SIM penetration rate had hit 75 percent. Of this, about 16 percent to 17 percent of Filipinos own more than one SIM card. “I don’t think it’s an alarming rate considering the dynamics of the prepaid market. SIM card prices are very low. It’s very easy to buy SIMs. It’s almost like buying shampoo,” added Ablaza. The mobile phone subscribers of the Philippine Long Distance Telephone Co. (PLDT) Group, meanwhile, grew over 5 million last year. PLDT, partly owned by Hong Kong’s First Pacific Co. Ltd. and Japan’s NTT Communications and NTT DoCoMo, said in a disclosure 2008 wireless subscribers hit 35.2 million.  it said in a disclosure.  Smart Communications Inc. registered 20.9 million subscribers in its network while unit Pilipino Telephone Corp. closed the year with 14.3 million subscribers.   At end-2007, Smart and Piltel combined recorded 30 million subscribers, an increase of 5.9 million from the previous year.  Smart recorded net additions of approximately 3.2 subscribers while Piltel’s Talk ‘N Text added about 2.7 million subscribers to end 2007 with 20.3 million and 9.7 million subscribers, respectively. “I doubt we could add another 5 million this year. That one I doubt. Slightly lower than the five million last year, I guess. It could be around three to four million only,” PLDT chairman Manual V. Pangilinan said. But January numbers for subscriber takeup, he said, are slightly higher than last year. “So that’s a good sign. We are slightly encouraged by that. Let’s remember that these are still the early days. The indication so far is that we are slightly ahead of last year. Remember January is usually a slow month because after the December splurge, everything usually slows down.”   // File Photo taken from load.com.ph, a website that provides various types of loads and prepaid cards. //    http://www.businessmirror.com.ph/index.php?option=com_content&view=article&id=5686:recession-or-not-pinoys-still-spending-for-cell-load&catid=24:companies&Itemid=59