But IDC said mobile services driven by mobile broadband and value-added services are likely to drive growth in the next five years.
"The growth momentum in the next five years will largely come from mobile services, driven by mobile broadband, mobile Value Added Services (VAS), and customized mobile applications. Mobile operators are heavily focus on mobile broadband strategy as they have rolled out full overage of 3G services and starting to roll out 4G network across the archipelago," said Ashadi Cahyadi, senior research manager for IDC Asia Pacific.
IDC said revenues from the telecommunications sector amounted to $5.012 billion in 2013 - two percent higher than the previous year.
Driving the demand in telecom services in the Asia-Pacific market that includes the Philippines is the development or expansion of multinational corporations in the region.
"With fast-growing bandwidth demand and increasing price pressure, usage is expected to increase fast while ARPUs of most services across fixed line and mobile will be on a slow decline. Over-The-Top (OTT) applications are cannibalizing the revenue of some core traditional telecom services such as messaging and voice calls," IDC said.
Cahyadi added that while IDC expects positive revenue growth, the main challenge is how the mobile broadband strategy "can support customer retention and loyalty program in a market of predominantly prepaid mobile users."
IDC noted overall forecasts remain optimistic, although conservative, at a CAGR of 4 percent.
Next 5 years
Sherrie Huang, research manager for IDC Asia/Pacific, said fixed line telecom services may be defined in the next five years by bandwidth upgrade, service improvement, migration from standalone basic communications.
They may also involve connectivity offerings toward managed solutions and bundled packages for fixed line telecom services, she added.
"IDC recomemends that the telecom service provider (SP) community reviews their offerings portfolio and examine the ROI of the services especially those basic, legacy, or standalone services. SPs need to strengthen their managed and professional services capabilities, and come up with innovative solutions and integrated/bundled packages/offerings to remain competitive, rather than continue selling the same portfolio with standalone communications and connectivity services," Huang said.
She added SPs have "to closely monitor market trends and technology evolution to ensure they remain on the right track."
