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Telco sector poised for further growth

Explosive demand for internet services will be sustained through the next five years, as smartphones become cheaper and a bigger slice of the population turns to high-speed internet subscriptions, according to the latest Ericsson Mobility Report.

Ericsson noted that the twin trends would drive the growth of the Philippines’ telecommunications industry through 2021.

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It noted that mobile subscription penetration was poised to hit 130 percent in 2021, from 115 percent last year.

Those on LTE subscriptions were at 5 percent last year, and the figure is expected to jump to 70 percent by 2021.

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This was also driven by smartphones, which have become cheaper.

Ericsson said smartphone subscriptions in the country would more than double from close to 40 million in 2015 to around 90 million in 2021.

Mobile broadband subscription penetration for the country stood at almost 50 percent in 2015, but will reach more than 120 percent by 2021.

“Aside from increasing affordability of smartphones and improvements in broadband coverage that our operators are working on, we think the youth segment of the market is one of the key drivers of mobile broadband growth, as they are more likely to be viewing online videos, using social networking and instant messaging apps on a daily basis,” Sean Gowran, President and Country Manager of Ericsson Philippines and Pacific Islands, said in a statement.

When comparing March 2016 and March 2015, average data traffic per user for mobile broadband in Philippines grew close to 30 percent, compared to around 60 percent for Wi-Fi, Ericsson said.

“This is tremendous growth and we recommend that service providers consider how to include Wi-Fi as part of their overall strategy,” Gowran noted.

Compared to mobile broadband subscription penetration, the country’s fixed broadband subscription penetration, on the other hand, was just above 10 percent in 2015.

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“By 2021, however, we see this penetration rate going up to almost 20 percent,” Gowran said.

On a global scale, Ericsson said there was a dramatic shift in teen viewing habits: use of cellular data for smartphone video grew 127 percent in just 15 months (2014-2015).

Over a period of four years, or from 2011 to 2015, there was a nearly 50 percent drop in the time teens spend watching TV/video on a TV screen. In contrast, there was an 85 percent increase in time spent watching TV/video on a smartphone.

This, and the fact that the upcoming generation of mobile users are the heaviest consumers of data for smartphone video streaming (Wi-Fi and cellular combined), makes them the most important group for operators to monitor, Ericsson said.

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TAGS: Ericsson Mobility Report, mobile broadband, mobile phone, smartphone, telco
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