Digital developments

IN VARIOUS digital fronts, most evidently in the mobile segment, the Philippines has made remarkable headway. GSMA Intelligence, the research arm of GSM Association which represents the interest of nearly 800 mobile operators all over the world, noted in its 2014 paper “Country Overview: Philippines Growth through Innovation” that despite being a lower-middle-income country, the Philippines “is well ahead of expectations.”

In 2014, there were 50.9 million unique Filipino mobile subscribers, up by 4% from the 49.2 million subscribers recorded in 2013. The unique subscriber penetration rate was 50% and it was higher than the lower-middle-income countries’ average of 40%. Total mobile connections rose by 7% from 109.2 million to 116.6 million. Forty percent of these mobile connections used 3G while 2% used 4G.

More Filipinos are also connected to the Internet. According to the World Bank, in 2013, there were 37 Internet users — people with access to the worldwide network — per 100 Filipinos. In 2007, there were only six. That is not to say that more Filipinos have fixed broadband subscription. As of 2014, the fixed broadband penetration rate in the country stood at a paltry 2.6%, according to a United Nations report.

“… Given the relatively low fixed Internet penetration due to limited infrastructure and high costs,” GSMA Intelligence said, “mobile is the primary device for accessing the Internet with mobile Internet adoption reaching 62% of total subscribers in Q3 2014.” The rate, it said, was the third highest in Southeast Asia, behind Thailand and Malaysia.

The mobile operators in the country have been largely responsible for the growth in mobile Internet usage. GSMA Intelligence said that they “are actively trying to get more of their customers engaged in the mobile Internet and data services.” “For example, Smart recently announced a promotion providing free mobile Internet access to its entire subscriber base via data-enabled feature phones and smartphones, and Globe launched a new suite of Lifestyle Bundles, allowing postpaid subscribers to customize their data usage based on their lifestyles and interests,” it said.

Issa Cabreira, senior vice-president for consumer mobile marketing at Globe Telecom, Inc., said in an e-mail to that since their customers pursue various interests and use the Internet in different ways, “… our priority is to give them options so they can choose which data service or offer is relevant to them.”

“To ensure our customers enjoy a complete digital experience, we continuously invest in our network to give them a fast and seamless browsing experience,” she added.

Smartphone is a key driver behind the continuous growth of mobile Internet usage. “The Philippines is one of the fastest-growing smartphone markets in Southeast Asia, with annual smartphone connections growth of 75% over the last four years — again above the average for Southeast Asia and the benchmarked countries (which include Egypt, Ghana, Nigeria, Guatemala, Nicaragua, Indonesia, Sri Lanka and Vietnam),” GSMA Intelligence said.

“The rise of smartphone use in the Philippines is an indication of the increasing sophistication of Filipino mobile phone owners spurred by both improved economic conditions and more affordable devices as the technology matures,” Ms. Cabreira said.

Based on GSMA Intelligence’s estimates, smartphone sales will overtake feature phone sales this year while smartphone connections will surpass feature phone connections next year. The emergence of local smartphone brands, such as Cherry Mobile and MyPhone that retail smartphones at feature phone prices, has propelled, and may well continue to drive smartphone adoption forward.

Soaring mobile Internet usage, fueled by smartphones, might seem to have come at the expense of SMS. Citing reports from the top mobile operators in the country, GSMA Intelligence noted of a decline in SMS volume. “But this is not a reduction in user engagement,” it said. “It is a transition from one form of communication to another, and this has led to the Philippines becoming known as the ‘social networking capital of the world’.”

UM, a global media agency, found in its recent survey of more than one billion Internet users worldwide that Filipinos spend 53 hours (more than the global average of 42 hours) socializing online, mostly to keep in touch with friends and to have fun.

“With some 11 million Filipinos living overseas, social networking has become a way to connect and communicate with friends and family. Pinoys now lead the world in the amount of time spent socializing online,” UM said.