DE LA SALLE UNIVERSITY- DASMARIÑAS

SEÑIOR HIGH SCHOOL

INDUSTRY ANALYSIS ON PHILIPPINE MOBILE SERVICES

Members:
Trisha Lei Regis
Marcela Bacalangco
Patricia Monserrat
Justine Principio
Noslen Quintanilla

ABM 21

December 03, 2018

 Table of Contents

Executive Summary ........................................................................................... 1

Chapter 1: Nature of the Industry
A. Product/Service Description .................................................................... 2
B. Market ..................................................................................................... 2
C. List of Companies ................................................................................... 2
D. Market Share........................................................................................... 4
E. SWOT Analysis of Globe Telecom .......................................................... 4
F. Demand & Supply ................................................................................... 5
G. Market Structure...................................................................................... 5
Chapter 2: Socioeconomic Factors & Problems Affecting the Business &
Industry
A. Demographic Factors .............................................................................. 7
B. Economic Factors ................................................................................... 7
C. Environmental Factors ............................................................................ 8
D. Political Factors ....................................................................................... 9
E. Social Factors ......................................................................................... 9
F. Technological Factors ............................................................................. 9
Chapter 3: Conclusion & Recommendation
Conclusion & Recommendation ................................................................. 10
Chapter 4: Appendices
Appendix A (Globe Telecom Branches)..................................................... 11
Appendix B (Smart Communication Branches) ........................................ 12
Appendix C (Sun Cellular Branches) ........................................................ 13
References ....................................................................................................... 14
 Executive Summary

The mobile services industry is one of the most established industries in the
market whose services mainly focus on calls, texts, data and wireless services,
and international messaging. Mobile services providers cater a wide range of
mobile phone users through a network of distributors and resellers all over the
country. The industry includes companies namely; Globe Telecom, Smart
Communications, Republika ng TM, Sun Cellular and Talk ‘N Text where Globe
Telecom and Smart Communications dominate the whole industry, thus making it
a duopolistic market. With communication as part of the daily life of every Filipino
as well as the interminable development of latest mobile phones, the demand for
mobile services continue to surge every year.

The industry analysis studies the different socioeconomic factors and

problems affecting the mobile services industry namely; demographic, economic,
environmental, political, social and technological. Each problem/factor was
expounded and further analyzed to determine how it is affecting not only the
companies but also the whole industry itself. To minimize these problems, several
solutions such as building of towers and improving the speed and connection of
mobile data were recommended in order to improve existing services and expand
customer base.

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 Chapter 1
Nature of the Industry

A. Product/Service Description
The telecommunications industry, particularly the mobile services,
includes companies that provide wireless services to individuals,
businesses, corporate and enterprise clients. Besides, these companies
offer call, text and data services as well as international messaging, roaming
and downloading services. They serve customers through a network of
distributors and resellers all over the country.

B. Market
The mobile services industry caters a wide range of customers
including individuals of all age groups, businesses and corporate clients as
long as they are mobile phone users.

C. List of Companies

Company Owner Location Major Suppliers

Andrew
Corporation, ECI
Telecom, Aviat
Networks, Cisco,
Jaime Zobel De Bonifacio
Singapore
Globe Telecom Ayala Global City,
Telecom, NEC,
(Ayala Corporation) Taguig
Tellabs, ZTE
Corp., Fujitsu Ltd.,
AT& T Global and
Amdocs Phil Inc.
Andrew
Corporation, ECI
Telecom, Aviat
Jaime Zobel De Bonifacio
Republika ng Networks, Cisco,
Ayala Global City,
TM Singapore
(Globe Telecom) Taguig
Telecom, NEC,
Tellabs, ZTE
Corp., Fujitsu Ltd.,

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 AT& T Global,
Amdocs Phil Inc.
Apple South Asia,
Samsung
Manuel V. Electronics Co.,
Smart Ayala Avenue,
Pangilinan (PLDT Ciena
Communications Makati City
Inc.) Corporation,
CISCO, Wuhan
FIPT
Apple South Asia,
Samsung
EDSA Corner
Manuel V. Electronics Co.,
Ortigas
Sun Cellular Pangilinan Ciena
Avenue,
(PLDT Inc.) Corporation,
Quezon City
CISCO, Wuhan
FIPT
Apple South Asia,
Samsung
Manuel V. Electronics Co.,
Smart Tower,
Talk ‘N Text Pangilinan Ciena
Makati City
(PLDT Inc.) Corporation,
CISCO, Wuhan
FIPT

The mobile service industry includes several companies namely: Globe

Telecom, Republika ng TM, Smart Communications, Sun Cellular and Talk ‘N
Text. Globe Telecom was founded by the Ayala Corporation in 1935. It is a
partnership of Ayala Corporation and Singapore Telecom (SingTel) since 1993.
Republika ng TM, previously as Touch Mobile, is a cellular service brand owned
by Globe Telecom. Smart Communications, on the other hand, is a subsidiary
of PLDT Inc. owned by Manuel V. Pangilinan. Sun Cellular was a former
subsidiary of Digitel Mobile Philippine Inc. (DMPI). It was acquired by the PLDT
Inc. from Lance Y. Gokongwei of JG Summit Holdings in October 2011. Talk
‘N Text is a cellular service brand of Smart Communications handled and
owned by Manuel V. Pangilinan of PLDT Inc.

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D. Market Share

MARKET SHARE
Globe Smart Talk 'N Text Sun Cellular TM

TM
11%
Sun Cellular Globe
11% 33%
Talk 'N Text
17%
Smart
28%

Globe Telecom leads the mobile services market with 32.90%

revenue equivalent to 14.5 billion pesos. Smart Communications, on the
other hand, leads next to Globe Telecom with revenue amounting to 12.4
billion pesos (28.20%). Talk ‘N Text comprises 16.80% of the overall market
corresponding to 7.4 billion pesos. Sun Cellular gained a total revenue of
4.8 billion pesos (11.11%) while TM accumulated a revenue of 4.7 billion
pesos (10.80%).

E. SWOT Analysis of Globe Telecom

STRENGTHS WEAKNESSES
 Established brand name  Poor network
 Market Share  Poor customer service
 Product and Service Quality  Brand Portfolio
 Management  Late adaptation of technology
 New Technology  High loan rates

OPPORTUNITIES THREATS
 New acquisitions  Intense competition
 Joint ventures  Weather
 Globalization  Government regulations
 Increasing demand  Merging of 3 networks
 Network expansion  Inflation

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F. Demand & Supply

Philippine Mobile Subscribers (in millions)

140

120
117.84 120.1 115.82
100 111.33
102.82

80

60

40

20

0
2013 2014 2015 2016 2017

The dramatic increase in the Philippine mobile subscriptions has been

remarkable over the years. The boom in the mobile services industry can be
attributed to the engagement of many Filipinos with mobile phones. Besides,
since majority is spending more time on internet, social media and games, the
use of mobile data is gaining popularity nowadays. In fact, 71% of internet
consumption is via mobile. However, the mobile subscriptions in 2017 dropped
to 115.82 million from the 120.1 million subscriptions in 2016. This is due to the
development of latest broadband in the country that year.

G. Market Structure

Since Globe Telecom and PLDT/Smart Communications are the only

two dominant mobile networks in the country, they are under the duopoly
market. Duopoly pertains to the situation where a market is dominated by two
sellers. There may be more than two sellers but the supply of the product is
controlled by the two of them. In the Philippines, there are other mobile service
providers such as Republika ng TM, Sun Cellular and Talk ‘N Text but they are
controlled and managed by their parent company (Globe Telecom or Smart

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Communications). Furthermore, the characteristics of a duopoly market include
strong price control and high entry barriers.

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 Chapter 2
Socioeconomic Factors & Problems
Affecting the Business & Industry

A.) Demographic Factors

1.) Education
The management and employees with right education and
sufficient knowledge will have more ideas on how to make the business
more successful. With the intense competition in the business world,
companies should implement strategies or make an innovation to cater
a wide range of customers and gain more profit.

2.) Income
Income may have a positive or negative effect on businesses
depending on many factors. Consumers spend money based on an
increase or decrease in their income. An increased in income results to
greater demand of goods and services, thus, making consumers to
spend more money. On the contrary, lower income results to lesser
spending which creates an effect to businesses.

B.) Economic Factors

1.) Inflation
The surging inflation may affect the demand for the services
offered by the whole industry. Because as the price of goods and
services rises, the value of peso and the purchasing power of
consumers deteriorate. Besides, if the price of raw materials rises, the
building of towers and resources in both rural and urban areas will be
expensive. As a result, these expenses will affect the prices of the
services offered by the companies under this industry.

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 2.) Economic Growth
According to Ernest Cu, the Chief-Executive Officer (CEO) of
Globe Telecom, the mobile services industry has been an important
contributor to the development of the country’ economy in diverse ways.
First, the whole industry has built telecom infrastructures and invested
new technologies in line with the government’s investment priorities.
Second, the industry’s key players have been one of the biggest tax
payers in the country. In fact, Globe has paid 60 billion pesos for taxes
and regulatory fees over the past ten years.

3.) Employment
In line with this, the newly-built infrastructures and technologies
enabled growth to other industries including the Business Process
Outsourcing (BPO) and call centers, which in turn, provided numerous
employment opportunities to many Filipinos. Moreover, the industry has
provided jobs and livelihood to thousands of content providers,
distributors, retailers and small and medium-scale business.

C.) Environmental Factors

1.) Location
In any country, one of the reasons for the persistent gap between
the rural and urban areas is the telecommunications infrastructure gap.
Rural areas have lesser telco infrastructures compared to those of urban
areas so as a result, people living in rural areas often experience weaker
signals or sometimes, no signal at all.

2.) Weather
Mobile phones transmit and receive electromagnetic waves
which can be directly affected by weather phenomenon by such as
humidity, heavy cloud cover, thunder, lightning, wind and rain. In the

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 Philippines, bad weather causes heavy cellular traffic and weaker
signals.

D.) Political Factors

When a new leader take into the position, that leader might make
some changes regarding the government regulations on the mobile
services which may later affect the whole industry.

E.) Social Factors

Communication is at the center of the human experience. It has
become an important aspect of the daily lives of every Filipinos. In line
with this, customers need mobile services (eg. calls, texts, mobile data)
in order to communicate with their friends and loved ones, update their
social media accounts, purchase products online, find jobs and many
more.

F.) Technological Factors

Due to the development of latest mobile phones, most Filipinos,
especially the youth, spend more time on internet surfing, social media
and games. In fact, 71% of internet consumption in the country is via
mobile. Moreover, due to the engagement on these activities, the
demand for mobile services, particularly the mobile data, gets higher.

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 Chapter 3
Conclusion & Recommendation

Communication is an essential factor in living on the 21st century due to the

rapid advancement of technology. Transmission of information and instructions as
well as different transactions happen either in a form of text messages, online
messages or calls. Thus, the mobile services industry is an essential business for
it provides quality services of communication through text messages, calls and
mobile data that are used for both personal and business purposes.

Considering all the socioeconomic factors and problems affecting the

duopolistic telecommunication industry in the Philippines, the major players: Globe
Telecom and PLDT/Smart Communications intricately have an impact to the
productivity of the community. These problems are needed to be addressed in
order to fulfill the established goals of the company. In order to have resolutions
for these problems, one must be observant to the needs of the community while
being aligned with the inevitable progress of technology. One must be also
cautious with the constant change of trends to provide the best services to the
community. In addition to this, building of towers especially in rural areas might be
considered to improve and strengthen the signal in those areas. Since majority
spend more time on internet, social media and games, improving the mobile data
speed and connection might also be considered in order to provide quality services
to people and expand customer base.

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 Chapter 4
Appendices

APPENDIX A (Globe Telecom Branches)

METRO MANILA LUZON VISAYAS MINDANAO

Alabang Town Center o Marquee Mall o SM Iloilo o SM Cagayan
o Ali Mall o NE Pacific Mall o SM Bacolod o SM Davao
o Araneta Square o Pacific Mall Legaspi o SM Cebu
o Ayala Malls The 30tho SM Bacoor o Ayala Cebu
o Eastwood Mall o SM Baguio
o Festival Mall o SM Baliwag
o Fisher Mall o SM Batangas
o Gateway o SM Calamba
Glorietta 3 o SM City Cabanatuan
Greenbelt 4 o SM City
Market! Market! Telabastagan
Power Plant Mall o SM Clark
o Robinsons Galleria o SM Dasmariñas
o Robinsons Manila o SM Lipa
o Shangri-La o SM Lucena
o SM Bicutan o SM Marilao
o SM Fairview o SM Masinag
SM Makati o SM Molino
o SM Mall of Asia - o SM Naga
North Mall Parking o SM Rosales
Bldg. o SM Rosario
o SM Manila o SM San Pablo
o SM Marikina o SM Sta. Rosa
o SM Megamall o SM Tarlac
o SM Muntinlupa o SM Taytay
o SM North Edsa o Sta. Lucia
o SM Novaliches o The District Imus
o SM San Lazaro
o SM Southmall
o SM Sta. Mesa
o SM Sucat
SM Valenzuela
o The Podium
o Trinoma
o UP Techno Store
Uptown Place Mall
o V-Mall

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 APPENDIX B (Smart Communication Branches)

METRO MANILA LUZON VISAYAS MINDANAO

Ali Mall SM Taytay Robinsons SM Davao
Araneta Gateway Sta. Lucia Dumaguete SM Cagayan
SM Novaliches SM Masinag SM Bacolod
Robinsons Galleria SM Dasmariñas Robinsons Bacolod
SM Fairview SM Bacoor SM Cebu
SM North Edsa SM Molino SM Ilo-Ilo
SM Sta. Mesa SM Rosario
Robinsons Magnolia Silang, Cavite
SM Marikina SM Lipa
Shangrila SM Batangas
SM Megamall SM Calamba
The Podium SM Sta. Rosa
SM Valenzuela SM San Pablo
Victory Mall Pacific Mall
Festival Mall SM Naga
SM Muntinlupa SM Lucena
Robinsons Ermita SM Clark
SM Manila SM Pampanga
SM San Lazaro SM San Fernando
Tutuban Mall Downtown
Binondo SM City
Power Plant Mall Telabastagan
Smart Tower SM Olongapo
Cash and Carry Mall SM Marilao
Ramon Cojuangco Waltermart Plaridel
Bldg. SM Baliwag
SM South Mall Waltermart Gapan
SM Las Piñas NE Pacific Mall
Starmall Las Piñas SM City Cabanatuan
SM Mall of Asia SM Tarlac
Greenhills SM Baguio
SM Rosales
Puerto Princesa
Sorsogon
San Jose
Daet
Calapan

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 APPENDIX C (Sun Cellular Branches)

METRO MANILA LUZON VISAYAS MINDANAO

Headoffice SMART SMART - Palawan Direct Sales Visayas, Direct Sales
RSS NCR allocation SMART - Laoag Cebu Mindanao
Smart Tower Sta. Cruz, Laguna Direct Sales Visayas, Direct Sales
RSS NCR allocation Vigan Bacolod Mindanao (CDO)
Icon San Fernando, La Retail Sales Cebu Retail Sales Samar
Retail Sales South Union Retail Sales Iloilo Davao Headoffice
NCR Alloc San Jose, Nueva Retail Sales Bacolod Davao
Quezon City Ecija Mabolo Cebu Retail Sales Davao
Makati Balanga Iloilo City Davao Headoffice
Wellcom Robinsons Boac Bacolod City GENSAN
Galleria Retail Sales Sta. Davao City Davao Headoffice
Wellcom Robinsons Rosa ITAC1 - Iloilo CDO
Malabon Retail Sales ROB ITAC2 - Passi Davao Headoffice
SBW booth Lipa KOKs1 - Boracay Bukidnon
Robinson’s RSS South Luzon KOKs1 - Capiz PLDT Tuguegarao -
Novaliches (in front of Retail Sales SM KOKs1 - Antique Tempo Space of
Handyman) Dasma Paseo
SBW booth RSS Calamba SMART - Valencia
FARMER'S PLAZA RSS Batangas Bukidnon
(Near Entrance of RSS Central Luzon Catbalogan
CD-R King) RSS Pampanga 8Telcom Butuan
SBW booth RSS Baliuag Bulacan NCCC Davao
Robinson’s Forum RSS Plaridel Bulacan Tagum
(Near SOGO RSS Plaridel Digos
appliance) Cabanatuan Toril
SBW booth RSS Plaridel Tarlac Nabunturan Davao
Robinson’s Ermita RSS North Luzon Gaisano South
(Food court area, in SBW booth Rob Dipolog
front of escallator) Dasma Panabo
SBW booth LRT SBW booth Rob Imus Cotabato
North Caloocan Mall SBW booth Rob Sta. Kidapawan
(back entrance near Rosa Koronadal
Jeep terminal of San Pedro Laguna
Meycauayan to Binan San Antonio
Monumento) Trece Martirez Cavite
SBW booth Harrison San Jose Mindoro
Plaza Mall Manila San Fernando La
SBW booth Ever Union
Gotesco Recto San Mateo
SBW booth Ever Laoag
Gotesco Jenra Angeles
Commonwealth Mall Jenra Pampanga
SBW booth Ever Meycauayan
Gotesco Ortigas Tarlac
Shaw Center Mall Cabanatuan
Mandaluyong Candelaria Quezon
Eton Centris Lopez Quezon
Fishermall Starmall Alabang

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Bloomberg. (2018, November 30). Wireless telecommunications service.
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https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcap
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Capedolupo, D. (2018, September 25). 8 reasons why cellphone signals suddely
go bad. Retrieved from https://www.wilsonamplifiers.com/blog/8-reasons-
why-cell-phone-signals-suddenly-go-bad/
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s

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