PLDT to further improve mobile services amid stiff competition in telco industry

PLDT Chairman and CEO Manuel V. Pangilinan (Pictured) said the company is focused on minimizing its churn rates or the percentage of subscribers who discontinued their subscriptions to their services last year. (Photo: Website-unknown/ Wikipedia)

MANILA –PLDT Inc. has vowed to further improve its mobile services amid tough competition due to the rise in the number of subscriptions of its rival mobile communications firm, Globe Telecom.

PLDT Chairman and CEO Manuel V. Pangilinan said the company is focused on minimizing its churn rates or the percentage of subscribers who discontinued their subscriptions to their services last year.

He said that PLDT conducted a clean-up, which accounted for the decline in the number of its subscribers in 2016.

“We have found out that quite a number of our subscribers were inactive. So we needed to conduct a clean-up in the course of 2016. We need to reflect on the true number of subscribers for the wireless group,” Pangilinan said in an interview with reporters Thursday.

Moreover, he said, they need to assess the number of subscribers who are active on their broadband, fixed line and wireless network, among others. “We need to determine how active our subscribers are on our network. If they are not active, they are not quality subscribers,” he added.

PLDT records show that its average churn rate for the first nine months of 2016 was 7 percent for prepaid mobile subscribers, compared to 6.9 percent for the same period in 2015. For its postpaid subscribers, the churn rate was at 5.7 percent, compared to last year’s 3.6 percent.

Pangilinan acknowledged that the industry has evolved to the extent that its subscribers are not at a preeminent stage compared to previous years.

He said that it is important to focus on the growth of the local telco industry and the convergence of fixed, mobile and broadband services being offered to the consumers. “Revenues and profits are not as important as before on my view. What is important is to look at the total telco revenue now. Everything is converging,” said Pangilinan.

Globe Telecom has overtaken PLDT’s mobile unit Smart Communications as the largest mobile operator in the country, gaining more than 10 million subscriptions for the fourth quarter of 2016.

Globe finished 2016 with 66.6 million subscribers, compared with Smart’s 62.1 million, giving it a 52 percent market share, according to GSMA Intelligence.

The mobile operator has steadily edged on its rival firm when Globe registered 12.2 million net additions and Smart lost nearly 5 million mobile customers. Globe had been slowly gaining on the market leader since 2012 when it had a 32 percent market share while Smart’s market share since Q4 2015 fell from 61 percent to 48 percent by end-2016.

Both companies have faced slowing growth, with PLDT’s service revenue for the first nine months of 2016 declining 3 percent to PHP119 billion (USD2.4 billion), and with cellular services falling 8 percent to PHP66.6 billion. Globe’s revenue for the July-September period was flat at PHP29.5 billion, with increases in home broadband and corporate data offsetting a 2 percent decline in mobile service revenue to PHP2.25 billion and a 10 percent drop in fixed-line voice to PHP898 million.

The two operators, temporarily setting aside their rivalry in an attempt to slow the entry of a third player, in May purchased the telecom assets of San Miguel Corp. and both have rushed to roll out base stations on the 700MHz band to expand coverage and boost capacity.