Duopoly in PH mobile space may not last long

The current two-horse battle between PLDT and Globe Telecom may be beneficial for the two telcos, but that situation may not persist for long as new players are waiting on the wings to take a bite out of the lucrative mobile pie.

This is according to market research firm Wireless Intelligence, which said in a new report that the acquisition of Digitel has eliminated the harmful pricing war between the mobile operators.

Matt Ablott, senior editorial analyst at Wireless Intelligence, said with the problem on pricing war now out of the way, the two operators can concentrate on maximizing subscriber value and migrating users to next-generation networks and services.

The PLDT-Digitel deal created an entity that now controls two-thirds of the Filipino mobile market, effectively turning it into a duopoly with SingTel-affiliate Globe Telecom as the only other major player.

Ablott said this comes at a key time with the market entering a mature phase and reaching 100-percent penetration in Q1.

“While the regulator has risked reducing competition by approving the deal, it has ensured that the two main players are in a position to manage any slowdown in subscriber growth in a market that remains price-sensitive and predominantly prepaid,” Ablott said.

But Ablott said it is possible that the duopoly situation may not last long as new players look for a route into the market.

He noted that Chinese vendor Huawei has teamed with a local investor to revive Next Mobile, while San Miguel – the locally-owned food and beverage giant – already owns several telecoms assets in the country and is thought to be interested in Cure’s 3G licence.

PLDT noted in Q1 that it has built out 3G to 90 percent of the population but three-quarters of its connections still relate to 2G devices, suggesting that plenty of work needs to be done before the leap to LTE.