A Brief Analysis of the Philippine Wireless Broadband Industry

Topics: Philippine Long Distance Telephone Company, Philippines, Mobile phone Pages: 5 (1140 words) Published: October 19, 2010
A Brief Analysis of the Philippine Wireless Broadband Industry

Table of Contents

1An Introduction to the Philippine Wireless Broadband Industry4 1.1Brief History4
1.2The Current Ecosystem4
3Market Segmentation4
6Impact of Global Competition5

An Introduction to the Philippine Wireless Broadband Industry

Brief History

The telecommunication deregulation thru the enactment of the Public Telecommunications Policy Act of 1995 as spearheaded by then President Fidel V. Ramos, gave players such as SMART, Globe and PILTEL (Pilipino Telephone Corporation) the opportunity to slug it out with Philippine Long Distance Telephone Company, which monopolized the telecommunications industry. With the advent of cellular technology coming in two competing standards—GSM (European) and CDMA (American) standard, further wrested the monopoly from PLDT which was then purely a fixed wire line provider. SMART and Globe adopted GSM technology to provide mobile voice services while PILTEL chose CDMA. By the year 1997, it was clear that GSM was going to be the de facto standard of mobile telecommunications thus SMART and Globe became the dominant players, PILTEL had become stagnant and unable to grow with the same degree as with SMART and Globe, thus being acquired by SMART eventually.

With the uptake on Internet usage in the country, telecom providers limited only to providing voice services diversified their offering to broadband thus they became Internet Service Providers (ISP’s) at the same time. It was envisioned that the succeeding technology of 2G GSM which was 3G technology could meet the broadband needs, however due to technological limitations (speed limit of 3G) and the lack of a killer application, like the SMS/text, the mass adoption of 3G, is really slow prompting providers to have a “wait-and-see attitude”, that is, they continue experimenting with different technologies coupled with different selling plans.

The Current Ecosystem

The current wireless broadband industry in the Philippines is an oligarchy of three companies, namely, Philippine Long Distance Company/SMART, Globe, and Sun cellular. A number of entrants and new players offer broadband services but they are only niche players. In one way or the other, they are either acquired by the oligarchs or simply shut down due to tough competition. Meridian Telecoms, Red Mobile (formerly Connectivity Unlimited Resource Enterprise, Inc, and Airborne Access are examples of companies acquired by bigger companies which in this case is SMART/PLDT. New entrants such as wi-tribe (also known by Liberty WiMAX) which was a shared investment by San Miguel Corporation and Qatar Telecoms, still has to gain foothold. Other companies whose main products are not really broadband but who has the infrastructure and the resource to do so are starting to bundle this service to their product offerings such as SkyCable which comes with internet access and Bayantel broadband bundled with landline services are able to capture a small share of the customers.

The Role of Technology in Creating Products

As of now, the price of broadband service offerings is partly dictated by the technology which backs them up. Cheap but efficient and effective technologies have an impact on the final pricing of the services offered. Unlike in cellular technology which uses GSM, the broadband industry has yet to come up with a dominant technology or a de facto standard. Usually, the adoption of a de facto standard decreases the price of technology, for it increases the number of vendors creating and supporting products following the standard. More vendors stimulate competition and one way to command leadership in the competition is to lower the prices of the products. As an example, GSM technology has been supported by vendors such as Nokia, Motorola, Ericsson, Alcatel and...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Industry Analysis of Telecom Industry Essay
  • Philippine Telecommunications Industry Essay
  • The Philippine Tourism Industry Analysis Essay
  • Essay on The Philippine Mtual Fund Industry Swot Analysis
  • Industry Analysis Essay
  • Essay about Industry analysis
  • Essay about industry analysis
  • Industry Analysis Essay

Become a StudyMode Member

Sign Up - It's Free