The Philippine residential fiber broadband market is estimated to be worth at least $7.15 billion five years from now, up from $5.32 billion as of end-2019, a study of market research firm Media Partners Asia (MPA) showed.
MPA made the assumption based on a monthly subscription of P1,500 per month, approximately 5 percent of monthly household income for the lower-middle income class.
MPA’s study, which was made part of Converge Information and Communications Technology Solutions Inc.’s (Converge ICT) prospectus, showed 18.5 million households were capable of subscribing to fiber broadband as of end-2019.
“However, 2 million households are subscribed to a non-fiber broadband service and a further 15 million do not currently subscribe to any fixed broadband services primarily due to the lack of access to high-quality fixed broadband networks, resulting in significant pent-up demand,” it said.
By 2025, the number of households that can afford fiber broadband will grow to 22.6 million, 13x the current market size of 1.7 million fiber broadband subscribers, MPA noted.
“MPA estimates that the current market size is $1 billion in 2019. Based on the 2019 blended average revenue per unit of P1,196, the potential total addressable market is $5.32 billion in fixed broadband revenue as of December 2019,” it said.
“MPA estimates that 22.6 million households in the Philippines will be able to afford fixed broadband by 2025, representing a potential total addressable market of $7.15 billion in fixed broadband revenue by 2025,” it added.
MPA has pegged the Philippine residential fixed broadband subscribers at 3.5 million, for a fixed broadband penetration of 14 percent, compared to a 9 percent penetration in 2015, lower than most other Asean markets such as Vietnam (58 percent), Thailand (44 percent) and Malaysia (38 percent).
While the residential fixed broadband services in the Philippines began in the early 2000s, rollout was initially slow due to the capital-intensive nature of the business, MPA said.
From 2.4 million subscribers in 2016, this grew to 3.5 million subscribers in 2019, for a compounded growth of 13 percent, MPA noted. This subscription was further accelerated by the explosion of the new coronavirus disease to hit 3.8 million subscribers by end-June.
According to MPA, residential fiber broadband subscribers comprised about 5 percent of the fixed residential broadband market in 2015, before growing to 48 percent in 2019.
Fixed broadband penetration in the Philippines is expected to increase rapidly as supply constraints while significant pent-up demand is addressed, it added.
“MPA expects that the combination of outsized and rapidly growing demand for connectivity and rapid fiber rollout will result in fixed broadband penetration reaching 32 percent by 2025,” MPA said.