Telecoms shifting focus from SMS to broadband

The country's two leading telecommunication companies are shifting focus on broadband services as revenues from text messaging are likely to drop in the next five years. Orlando Vea, Smart Communication Inc.'s chief wireless advisor, said his company had more than three times the number of Evolved High Speed Packet Access technology to meet the needs of its broadband subscribers. “We are launching several base stations every day so don’t be surprised if you notice a sudden increase in your connection speeds,” he said. At present, Smart has more than 500 wireless base stations with HSPA+. The upgrades support the deployment of faster broadband services and products such as the Smart Bro Rocket Plug-it, the fastest prepaid USB dongle in the market today. At end-June, Smart Bro's subscribers reached about 1.5 million. Ernest Cu, Globe Telecom president and chief executive, said his company remained bullish with its broadband business. "We continue to gain momentum with our Tattoo product lines as the fastest-growing broadband brand in the country,” Cu said. He said Globe would continue to invest in broadband network to make sure that its customers got the best mobile and home internet experience. Globe's broadband subscriber stood at 1.3 million, 39 percent higher year-on-year. The company's broadband service revenues up 42 percent to close the first half of 2011 at P3.6 billion, compared to P2.6 billion in the same period last year. In a report, Ovum said revenues from text messaging of the Philippine telecom operators and in Asia Pacific were projected to slow in the next five years because of the alternative messaging solutions from internet service providers, handset vendors and social networks. In the Philippines, Ovum projected a total of mobile messaging revenues of $1.84 billion this year from $1.76 billion in 2009. Next year, the local telcos' messaging revenue is expected to reach $1.90 billion and $1.92 billion in 2013. By 2016, telcos' revenue from text messaging will drop to $1.91 billion. “While over the next four years the mobile messaging market will continue to grow, it is fast approaching an inflection point. Consumers will increasingly choose to send messages via the growing list of internet-based messaging services that have entered the market, rather than the traditional text message,” Neha Dharia, Ovum analyst said. Dharia said the trend intensified due to the growing presence of smartphones, low-cost data plans, and the prevalence of third-party messaging service providers on the mobile phone. "To continue to drive revenues from messaging, mobile operators will need to be innovative in their approach to both the services they offer and their business models,” OVum said. The National Telecommunications Commission had projected that the broadband subscribers would grow by double digits in the next three to five years.