Philippines: The Texting Capital of the World
Friday, October 27, 2006
Captain's Log Stardate -317820.99
Finally! Someone notices that the Philippines is indeed the SMS / texting capital of the world :~). Read on:
Thursday October 26, 2006
The Philippines has become the first country in the world where mobile users spend more on data services than on voice, according to a leading research company.
Marc Einstein, senior analyst at Pyramid Research, says that the average data revenue per subscription in the Philippines now stands at $3.90 (£2.08) a month, compared with $3.50 a month for voice - meaning that data accounts for 53% of the total.
This compares with last year's Philippines figures of $3.80 for data and $3.90 for month, and figures for 2004 of $3.40 and $4.40. While there are some other examples of operators getting up to 30% of revenue from data, notably O2 and 3 in the UK, and NTT DoCoMo and KDDI in Japan, in the majority of cases the data share is between 10% and 20%.
The main reason for the Philippines figures is that texting is very cheap compared to voice calls, so subscribers use texts as their main means of communication and their spending on voice calls is very low. Einstein says a text costs only about 1 peso (1.1p) compared to about 20 pesos per minute for prepaid voice calls.
Phil Kendall, director of the global wireless practice at Strategy Analytics, notes that in most markets a text costs roughly as much as about 30 to 90 seconds of voice (as in the UK, where texts cost about 10p each). In the Philippines, the text price is one-twentieth of this.
This is partly for historical reasons. Texting was free in the Philippines between 1994 and 2000 because operators' billing systems were unable to charge prepaid users for this service. But pricing also reflects promotional policies.
Leading operators Smart Communications and Globe Telecom both offer options where for between 25 and 30 pesos a user can send an unlimited number of texts for two days. As a result, average text use on Smart's network has grown to almost 1,000 messages per user per month, compared with only 15 minutes of voice.
According to Kendall, the Philippines experience demonstrates that users will send large numbers of texts if pricing is low. And many western operators, such as O2, have successfully adopted the concept of offering large text bundles.
This suggests that the subscription-type approach is more successful at encouraging usage and revenue than the alternative of charging per individual text, ringtone or download.
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