Can Starlink disrupt the Philippines broadband market? With its population of 113 million spread across 7,640 islands, the Philippines might be the geographically perfect market for satellite.

The Elon Musk low-earth orbit (LEO) satellite firm has captured attention locally after an Ookla survey showed its performance is on a par with the established broadband providers. It offers faster download speeds – 111Mbit/s – than the telcos, although it has lower upload and latency numbers.

Figure 1:Starlink offers faster broadband than local telcos, an Ookla survey shows.
(Source: Panther Media GmbH/Alamy Stock Photo)

Perhaps even more significant is the passion that Starlink subscribers seem to have for the service.

Ookla also polled Starlink customers worldwide and found the brand earns a strong positive net promoter score (NPS) compared to negative scores for fixed broadband providers. That's the case even in urban areas where Starlink's average download speed is around a third of the fixed broadband players.

"Clearly, Starlink provides a much-loved option for more rural, non-metro users who often don't have many good – if any – internet options," Ookla said. "Starlink users are more than willing to recommend the service and love the internet they are getting."

Starlink's problem is going to be price. Customers must pay 29,320 Philippine pesos (US$526) upfront for the equipment and a PHP2,700 ($48.79) monthly fee – a premium over PLDT's PHP1,699 ($30.70) basic home fiber plan.

Fiber growing at pace

There may not be many households willing to pay that much. But it is doubtless attractive to business and government offices, especially those outside the big metro areas.

That's certainly the strategy foreshadowed by UK sat player OneWeb, which has just announced an MoU with NOW Telecom, the Philippines' smallest telco, to provide service in the market. The partners identified "government, aviation, maritime, military, energy, healthcare and banking" as target verticals.

Meanwhile, fiber take-up is growing at a rapid clip in what has traditionally been a heavily mobile-centric country.

Market leader PLDT last week reported 14% growth in Q1 home fiber revenue, with fiber-only now accounting for 85% of its home broadband business. It added 81,000 new subs for the quarter, up threefold from the previous quarter, with total home fiber subs now topping 3 million.

"We believe that there is still room to grow the home broadband business as the market remains underpenetrated, albeit unserved demand sits at the lower segments of the market which are more sensitive to inflation," said Jeremiah dela Cruz, head of PLDT Home.

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Rival Globe Telecom is rebuilding its home broadband business with fiber after what it admits was a disastrous foray into 4G fixed-wireless. Its Q1 broadband revenue shrank by 7% and customer numbers declined by a third to 2.3 million, although it said its fiber sub revenue grew 30%.

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— Robert Clark, contributing editor, special to Light Reading