Mobile phone spending seen easing

Nathan Burley, Ovum analyst for the Asia Pacific, said the reduction in remittance values would damage the entire economy, the telecom industry included.

The Bangko Sentral ng Pilipinas had projected flat growth for remittances this year. The World Bank, however, sees OFW remittances dropping by 4 percent.

Government data showed that consumer spending remains the main engine of the country’s economic growth, with OFW remittances fueling that expansion.

The telecom industry contributes about 7 percent to the country’s gross domestic product, which is the final cost of all goods and services produced.

“Although telecommunications is more protected than many other verticals, we continue to see impacts from the economic downturn grow,” Burley said.

The government expects the economy to grow between 3.7 percent and 4.4 percent this year.

Burley noted that the average revenue per user (ARPU) has been falling in the Philippines for a number of years.

“We expect this trend to continue,” he said.

Last year, Globe Telecom Inc.’s prepaid ARPU was down to P208 from P244 in 2007, while Touch Mobile’s ARPU slid lower to P103 from P148.

Globe’s postpaid ARPU went down by 9 percent to P1,440 last year from P1,588 in 2007.

Ferdinand de la Cruz, head of Globe’s consumer wireless business group had said the company expects a single digit growth in revenue this year due to weak OFW remittances.

“What we are watching is the usage level,” he said.

For Smart Communications Inc.’s prepaid service, the average ARPU stood at P229.75 last year, down from P253.75 in 2007. Smart’s postpaid ARPU also eased to P1,483.25 from P1,485 in 2007.

The mass market brand of Smart, Talk ‘N Text had an ARPU of P158 last year, also down from P183.75 in 2007. –Darwin Amojelar, Manila Times