Try the new FT.com

November 8, 2005 4:36 pm

Philippines’ telecom market slows

  • Share
  • Print
  • Clip
  • Gift Article
  • Comments

Philippine mobile phone operators are finding it harder to sign up new users after withdrawing a marketing gimmick that gave customers free air time for switching from rival cellular companies, adding to pressures coming from tougher competition and rising consumer prices.

Philippine Long Distance Telephone (PLDT), the country’s biggest phone company, yesterday said its total subscribers remained at the end of June level of 20.8m, accounting for about 58 per cent of the market.

PLDT, which is a quarter owned by Hong Kong’s First Pacific, said third-quarter earnings slid 15.8 per cent to 8.2bn pesos (US$150m) from a year ago because of slowing subscriber and revenue growth. For the nine-month period net income in the first nine months of the year rose 12.7 per cent to 25bn pesos, keeping the company on track to meet its full-year profit target of 27bn pesos. 

Wireless subscribers at Globe Telecom, the Philippines’ second-biggest phone company, dropped 8.9 per cent in the third quarter compared with the previous period, according to Singapore Telecom, which owns 48 per cent of the mobile phone company.

Globe, which is scheduled to announce third-quarter results this week, had 13.6m cellular phone users as of the end of June, equivalent to about 38 per cent of the total, and 11.7m in the third quarter of last year.

Both PLDT and Globe stopped giving free phone credits to subscribers who switch from rival phone companies last May after establishing that the marketing promotion, called “SIM-swap”, did not significantly boost revenue as most of the beneficiaries went back to their previous provider after using up the free credits.

PLDT warned that its subscriber base would continue to fall until the end of the year because of the termination of the SIM-swap promotion. Slower economic growth and rising consumer prices brought about by record-level petrol prices are also seen to damp demand for wireless phone services.

“Top line growth becomes even more challenging in light of the added pressure on disposable income on the part of consumers and on profits on the part of corporations, caused by rising prices of oil and other basic commodities,” said Napoleon Nazareno, PLDT president.

Copyright The Financial Times Limited 2017. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.

  • Share
  • Print
  • Clip
  • Gift Article
  • Comments

NEWS BY EMAIL

Sign up for email briefings to stay up to date on topics you are interested in

SHARE THIS QUOTE