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Philippines on Brink of Broadband Boom

Light Reading
LR Mobile News Analysis
Light Reading
2/24/2009

Deployments of WiMax and other fixed wireless platforms will boost broadband revenues in the Philippines to $1 billion by 2013, according to a report recently published by Pyramid Research .

The report, "Communications Markets in the Philippines," suggests that the country’s emerging broadband market is set to boom as fixed wireless solutions, which currently account for only 1 percent of all connections, capture 5 percent of the market by 2013.

Fixed WiMax will capture the majority share of the market, according to the report. The Pyramid team cites launches expected in the coming year from Globe Telecom , Happy Communications, and perhaps Easy Call, as evidence that WiMax is now ready to emerge as a competitor to DSL.

The growth of broadband services is significant, as the market has previously been characterized by explosive growth in mobile service usage, particularly SMS text messaging. However, Pyramid eyes a trend towards declining voice revenues and strong price competition in SMS, noting that both major telecommunications providers -- Globe and Philippine Long Distance Telephone Co. (PLDT) -- reported only "flat to slightly increasing" revenues in the first nine months of 2008.

These two companies, which represent 86 percent of the total communications market in the Philippines, are expected to commit close to $1 billion in capital expenditure in 2009, primarily on 3G mobile and wireless broadband infrastructures, according to the report.

The Pyramid team identifies significant opportunities in the broadband market and expects it to flourish from 2010, with penetration virtually trebling during the next five years.

On the back of increased broadband connectivity, Pyramid predicts that VOIP will become the fastest growing service during the next five years, with a compound annual growth rate of 32.8 percent.

— Catherine Haslam, special to Light Reading

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