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The Philippines is set to continue expanding 3G and 4G LTE coverage

With the second-largest population in South-east Asia after Indonesia, the Philippines has a large consumer base for its mobile market. Penetration in 2012 reached 106%, or 102.3m subscribers, according to a report by PwC. Filipinos are also among the world’s most prolific texters, accounting for 10% of global SMS messages. This could change in the medium term as the country shifts from mobile voice and SMS services to 3G and 4G LTE networks.

Though the market for mobile web is still in its nascent stages, PwC reported that subscriber ship is expected to grow by 9.6% a year until 2016, driven by swift uptake in mobile broadband services. With such a prospect in view, mobile operators are expanding their revenue and customer bases by building new networks and upgrading old ones. “Several studies have shown a positive correlation between connectivity and growth,” Manuel V Pangilinan, chairman of the Philippine Long Distance Telephone Company (PLDT), told OBG. “This means that internet connectivity contributes to economic growth and even social transformation.”  The roll out of the 3G network began in 2005 when the government opened bidding on five new 3G licences. Despite having five licences on offer, the NTC ultimately granted only four, as it argued that the remaining applicants lacked the capacity to effectively provide 3G services. The four successful companies included Globe Telecom, Connectivity Unlimited Resource Enterprise (CURE), Smart Communications (owned by PLDT), and Sun Cellular. Smart Communications, having acquired CURE in 2008, was itself acquired by PLDT in 2011. As a condition of the latter deal, PLDT agreed to relinquish its CURE licence.

Smart Communications was one of the first operators to introduce 4G LTE services in the Philippines. In August 2012, it launched LTE service at bands of 850 MHz and 2600 MHz, adding additional capacity at 1800 MHz the following month. These services are already available in larger cities such as Manila, Caloocan, Las Piñas, Makati, Quezon City, San Juan, and Valenzuela, according to Telegeography, a telecoms research firm.

The company is also set to expand this service further. In March 2014, it unveiled plans to extend its 4G LTE network to all major cities by the end of 2014 – areas including Bohol, Bacolod, Davao del Sur, Tagaytay and Ilocos Norte – thus reaching 50% of the population. In addition, the P32bn ($714m) of planned capital expenditures for 2014 will include expanding Smart Communications’ 3G coverage from its current coverage of 71% of the population to 100%.

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