With mobile phone penetration rates reaching saturation point in the Philippines, there is room for expansion through the promotion of new services and internet usage, according to a recent report issued by the World Bank.
In its “2012 Information and Communications for Development: Maximising Mobile” report, released on July 18, the World Bank said that there were 101 mobile phone subscriptions for every 100 Filipinos, with prepaid subscriptions accounting for 96% of the total. The subscriber rate has jumped sharply since 2005, when there were just 41 phone owners per 100 people. The Philippines has an excellent coverage area for a developing nation, with 99% of the country having network access.
According to Rachel Kyte, the vice-president for sustainable development at the World Bank, mobile phones have revolutionised daily life in many communities such as the Philippines and hold the promise of even more advantages in the future.
“Mobile communications offer major opportunities to advance human and economic development – from providing basic access to health information to making cash payments, spurring job creation and stimulating citizen involvement in democratic processes,” Kyte said in a statement accompanying the report’s release. “The challenge now is to enable people, businesses and governments in developing countries to develop their own locally relevant mobile applications so they can take full advantage of these opportunities.”
It appears that, at least in some instances, those opportunities are being seized. The Philippines was singled out by the World Bank for its innovative use of mobile phone technology in the delivery of state services. Among the agencies rated worthy of mention was the Department of Education, which has collaborated with the Affiliated Network for Social Accountability in East Asia and the Pacific to establish a website that allows citizens to view significant statistics on local schools.
The report describes the site – checkmyschool.org – as a government-to-citizen online and mobile-based interactive tool that includes information such as budget allocations, teacher and textbook information and test scores for about one-fifth of the 44,000 schools in the country, while also allowing feedback and communication between parents and teachers.
The payoff from such services is high value, according to the World Bank; through the improvement of education service delivery through transparent and accountable behaviour, the website has also increased community participation and improved teacher behaviour.
“These efforts are typically innovative, as they often change the delivery or management of a conventional service or process,” the report said.
While penetrations rates have reached saturation point, there could be some room for additional subscriptions, but only if operators offered different services. Currently, options available to customers are fairly standard across the board, with companies generally providing variations on a theme when it comes to applications and packages. The potential for movement between operators exists, mainly based on cost-cutting to subscribers, though tariffs from services providers are also largely similar.
One area where there is significant growth within mobile phone usage is in financial transactions. According to estimates from the Bangko Sentral ng Pilipinas (BSP), the central bank, some 8m or more Filipinos use their mobile devices to make bill payments and conduct other banking-related activities.
The single-largest use for banking is overseas workers transferring money to their families back in the Philippines. With remittances by Filipinos working abroad being one of the most important sources of foreign currency transfer into the national economy, accounting for almost $2bn a month, this is a niche that could expand further, with operators also having the opportunity to extend such services.
The World Bank report did identify one field where the Philippines lagged behind its neighbours: internet access through mobile devices. Just 23.1% of Filipino mobile phone owners have broadband subscriptions, while only 9.8% of the population use mobile internet. This is one area that service providers can target to increase revenue in the coming years.
While expansion in subscriber numbers will be sluggish in the future, it will be up to operators to offer a diversified range of quality services if they want to maintain earnings growth. Having achieved blanket national coverage and brimming subscription levels, the goal will now be to improve quality rather than aim for quantity.
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