The Philippine Telecommunications Market

In March 2021, the third major telco firm in the Philippines, Dito Telecommunity, commercially rolled out its services. With this landmark development, the Philippines’ global ranking for mobile internet speed moved up to 86th from 111th, according to market research firm Ookla. In May 2021, Philippine mobile internet speed was documented at 31.98 Mbps (global average of 54.53 Mbps) and fixed broadband speed at 58.73 Mbps (global average of 105.15 Mpbs). By 2025, the number of mobile subscribers in the Philippines will reach 159 million, and broadband subscribers will number 10.8 million. Legacy players Globe and PLDT-Smart will lead the 5G rollout with already a combined 3,669 5G sites in country-wide locations.  
 
Digital transformation is being led by local telecom firms and emerging broadband companies, and these efforts are contributing to strong telecommunications industry growth. The three major telco players have an estimated combined capital expenditures of $15 billion being spent on the rollout of their services over the next three years. The emerging broadband providers embark on 5G, mobile services infrastructure, and satellite connectivity projects. 

The pandemic has increased the demand for connectivity that supports Filipinos working and studying from home accessing online content and platforms. According to market research firm BMI, higher data revenues are also expected because mobile video streaming and e-commerce growth. 
 
There has also been improvement in Philippine telecom regulations. In May 2020, the Department of Information and Communications Technology (DICT) published its first guidelines for independent cell tower construction (Common Tower Policy). The Philippines currently has only 22,405 combined cell towers operated by the three major telecom companies. The introduction of the common tower policy is expected to improve the rollout of mobile networks. In addition to the Government’s efforts, DICT and the Bases and Conversion Development Authority (BCDA) tendered the first phase of its National Broadband Plan valued at $20 million, which is the rollout of a bypass cable and fiber-optic network.  The other phases of the national broadband plan include the national free Wi-Fi program, satellite overlay, and the common tower policy.  The current administration only has a limited period to fulfill its ICT plans before the next Presidential elections in May 2022.

The market will evolve as reforms are pursued. With full foreign ownership possibilities in the telecom sector, foreign investors would have greater control and more significant incentives to participate in the market. The 159 million mobile subscribers would readily switch carriers to get better coverage and more economical pricing options.
 
All telecom players are expected to upgrade their network capabilities, install fiber-optic and sub-sea systems and cables, purchase modern networking equipment/storage/servers, and utilize cloud and cybersecurity services. The 5G rollout requires digital transformation solutions, including 5G-ready consumer devices. 
 
U.S. firms interested in pursuing telecom sector opportunities can work with the U.S. Commercial Service Philippines to connect with potential buyers and learn more about specific opportunities.
 
For more information, please contact Mr. John Giray, Commercial Specialist at the U.S. Commercial Service Philippines at John.Giray@trade.gov.