THE country’s two major telecom players, Philippine Long Distance Telephone Co. and Globe Telecom Inc., are ready to compete with regional telecom players through further expansion of the e-commerce and mobile payments services in Asean.
PLDT Group through its wireless subsidiary Smart Communication Inc. has Smart Money while Globe through G-Xchange Inc offers G-cash.
The homegrown service of the two companies has transformed the mobile phone into an electronic or virtual wallet that allows subscribers to send money, purchase goods and services, pay bills, and buy airtime load.
PLDT Group has partnered with Berlin-based Rocket Internet AG to expand its presence in Asean countries and in other regions such Latin America, South Asia and Africa where Rocket Internet has established a significant presence.
“It isn’t yet clear how the implementation of Asean regional economic project will impact on our industry — both at home and abroad. What is clear is that we shall increase our presence in e-commerce and mobile payments — both here and overseas — through our partnership with Rocket Internet,” said Ramon Isberto, Smart head of public affairs.
PLDT recently announced it is investing P1.54 billion for a 33 percent stake in a joint venture company formed with Rocket called Philippine Internet Group which will focus on creating and developing online businesses in the Philippines .
“We have just created two new joint ventures with Rocket — one for mobile payments here and overseas and another for e-commerce in the Philippines. Some of that expansion will take place in Asean. But expansion will also take place in other countries in other regions such Latin America, South Asia and Africa where Rocket Internet has established a significant presence” Isberto added .
Prior to PLDT investment in Rocket, the company has been expanding its international footprint via the so-called mobile virtual network operator (MVNO) set up through partnership with operators in the countries where large numbers of Filipinos reside — such as Hong Kong, Singapore, Taiwan, Guam, and more recently the United States and the United Kingdom.
“The driving logic of our international presence has not been the setting up of regional economic groupings, but rather the concentration of large numbers of overseas Filipinos” Isberto said.
Globe Telecom for its part has also been keen about staking its place in the international market. Last November the company announced it is expanding in the region, with Myanmar as its first venture outside the Philippines.
Ernest Cu, president and chief executive officer of Globe Telecom, said at the recent Asia Pacific Economic Cooperation (APEC) CEO Summit in Beijing, China that possible areas the company could get involved in are financial services and mobile advertising, citing their potential.
“We’ve always taken the position that if consumer habits are changing, then we have to change along with it and deliver what’s relevant to them. The real prize would be getting all of these individuals to access the Internet through their mobile phones and alternatives offered by different mobile apps become more commonplace and become the main mode of communication,” Cu said.
Cu also indicated the possibility of offering its mobile-based banking service in other Southeast Asian markets once the Asean Economic Community is in place. This will be spearheaded by Globe subsidiary G-Xchange, Inc. which operates its mobile money service GCash, as well as BanKO, a joint venture with parent company Ayala Corp and sister-firm Bank of the Philippine Islands, which offers a mobile-based, microfinance-focused savings platform.
The local telecom players are expected to benefit from the Asean integration given that their foreign partners have strong presence in the international market, according to Edgardo Cabarios, director for common carrier at the National Telecommunication Commission.
PLDT is partly owned by leading Japan mobile operator NTT Docomo and First Pacific Group a Hong Kong based investment and management and holding company with operation in Asia. Globe is partly owned by Singapore Telecommunication Ltd.
In terms of competition, foreign telecom firms still need local partners to allow them to operate in the Philippines since they can only own up to 40 percent in a telecommunication venture.
“Because of the constitutional constraints… 60-40 (ownership), foreign players cannot enter (invest) in the Philippines (as) 100 percent (fully-owned entities),” Cabarios said .
Gil Genio, executive vice president and chief operating officer for International and Business Markets of Globe, said the company will play a major role in offering core services, such as voice and data, as well as information and communications technology services to major industries and companies operating within the AEC.
“Being a service provider to them, it is important that we support telecommunications infrastructure for the said companies, not just those in the Philippines but for the rest of the Asean countries.
Genio sees as an opportunity for Globe to serve its clients on a much larger scale once AEC is put in place.
“It is likely therefore that if a large business entity is into manufacturing, it must have a footprint across the region: a manufacturing plant in one country, logistics in another, and customers all throughout.
Therefore we must be able to `connect’ them altogether through a robust telecommunications infrastructure. We consider that a major opportunity for us,” Genio said.
Genio stressed that telecommunication access is one of the key components in the trade agreements signed by Asean members.
Genio said Globe is ready to serve individual customers other than the mobile banking through its roaming services, an important source of revenue for the company.
“Our individual customers, especially those who will find themselves frequently travelling across Asean borders, will be happy to know that we currently are strengthening our outbound roaming offerings. We believe it will also encourage more outbound travel for Filipinos,” Genio added.
He said Philippine visitors will note the developments and upgraded facilities by Globe such as in hotels, airports and other travel-based facilities.
“Across Asean, we foresee a similar trend of tourist influx,” Genio said.
For Filipinos who travel abroad, Globe is rolling out initiatives to heighten their overall experience, such as bill shock prevention for example, through a default “unli” service so that when one travels without registering, he or she will only be charged with a flat rate. That will be a substantial opportunity for Globe as a service provider for incoming and outbound tourists.
“We are putting in place concepts like that, much the same as other Asean telcos are preparing,” Genio said.
Globe is also offering local SIMs (subscriber identity modules) at the Ninoy Aquino International Airport and other airports across the Philippines.
Globe is also beefing up its LTE (long-term evolution) footprint that will improve dramatically the experience of accessing the internet especially now that customers have chosen to access the World Wide Web through their mobile phones and tablets.
“The ability to push internet speeds through LTE is important. Across the country, we have blanketed the Philippines with 3G coverage everywhere. There should be no situation in the future where there is a site without 3G signal. We have an ongoing program now to put significantly many more sites on LTE. That will improve significantly the internet experience for everyone,” Genio said.
Globe has the largest number of partners for LTE roaming agreements with 18 operators, including South Korea, Singapore and Hong Kong.
“That will allow us to capture travelers from these Asean communities, and for business customers, vitalize free trade agreements in the participating countries,” Genio said.