Philippine Telecom Market continued to expand in 2005 and will become even more competitive in the coming years, says IDC

May 23, 2006

Philippines, 23 May 2006 – The Philippines telecom market made a remarkable performance in 2005 with mobile services market as the most dominant segment taking 66% share of the market pie. Such a market share, however, slightly declined from last year's 67%.

Based on IDC's latest research, Philippines Telecommunications Services 2006-2010 Forecast, although the mobile services market continued to expand in 2005, its growth pace is slower in terms of revenue as compared to its performance in 2004. Nonetheless, the slowdown in 2005 was blamed to several activities initiated by the operators in the areas of subscriber recognition and pricing rather than to a contraction in market demand.

Meanwhile, the fixed-line services market continued its recovery in 2005, registering a tremendous improvement considering that the market suffered a blow in 2003. The report also shows that year 2005 provided a milestone for data services, as these finally surpassed voice services in terms of total market revenue contribution. The growth was driven by the increased strategic focus of operators, the growing market of connectivity and the growing sophistication of end-user telecom requirements combined with various promotions for voice rates in both fixed and the mobile segments.

Moving forward, the marketplace will continue to be even more competitive. IDC advises market players to continue strengthen partnerships for content and VAS positioning and be more flexible in responding to the changing business dynamics of their customers.

"As price points continue to decline, SPs can no longer be dependent on incomes generated from subscriptions alone but also have to focus on offering value-for-money services. As such, SPs will have to ensure that they strive to offer high-quality services, including value-added services (VASs) at affordable prices," says Karen V. Rondon, senior analyst, Telecommunications Services Research, IDC Philippines.

IDC's latest research Philippines Telecommunications Services 2006-2010 Forecast examines the Philippines overall telecom services market, and discusses the major trends observed in the market in 2005, including market challenges and drivers for fixed-line and mobile services. It also provides an overview of the regulatory environment, touching on market liberalization, governing bodies, as well as recent major developments and issues.

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Chong Chee Kian
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