PLDT Adds Macau To International MVNO Portfolio


The Philippine Long Distance Telephone Company (PLDT) has confirmed the launch of MVNO services in Macau during Q212. This is the latest addition to its growing list of MVNO operations in international markets targeted at expatriate Filipino workers looking for a cost-effective means of communicating with family and friends back home. BMI has a positive outlook for the operator's strategy, which will see it leverage its brand name to tap into Filipino communities abroad, while minimising its market entry risks and capital expenditure.

Local media quoted PLDT's President, Napoleon Nazareno, as saying the operator launched MVNO services in Macau with a leading network in June 2012. BMI believes the operator in question is Companhia de Telecomunicacoes de Macau (CTM), Macau's biggest mobile operator and incumbent fixed-line service provider. Regulatory data show Macau has three other mobile operators, including Hong Kong's Hutchison, and one licensed MVNO Kong Seng Paging, which has links to Macau Cable TV.

Saturated Market
Macau Mobile Market By Technology ('000)

Macau is the fourth market in PLDT's international MVNO portfolio. In November 2011 the company signed an agreement with Celcom Axiata to establish an MVNO in Malaysia. The MVNO, which is 49%, owned by Celcom and 51% owned by PLDT, will offer services under the Smart Pinoy brand. Prior to the Malaysian venture, PLDT had signed similar deals with mobile operators CSL New World Mobility in Hong Kong and Mobile One (M1) in Singapore. The MVNOs in both markets also operate under the Smart Pinoy brand and have a combined subscriber base of around 100,000, according to media reports quoting PLDT's international sales and marketing arm Philippine Global Group.

BMI has a cautious outlook for the take-up of PLDT's service in Macau, considering the high mobile penetration and relatively small population of Filipinos in that country. There were 1.419mn mobile subscribers in Macau at the end of March 2012, according to regulatory data. This was a penetration rate of more than 250%. Meanwhile, the Philippine government said in 2010 there were around 10,000 Filipinos living in Macau.

It is therefore not surprising that PLDT plans to roll out MVNO services in other countries with large Filipino communities. The company has set an ambitious target of serving at least half of the estimated 8.6mn Filipinos living abroad. To this end, Nazareno revealed the company is looking at negotiating MVNO deals in more markets, with Taiwan, Italy, the UK and Saudi Arabia top of its list. The company hopes to seal two more deals by the end of 2014. One of those may be Japan, where the company's plan to launch an MVNO over NTT DoCoMo's network has been delayed since 2009 because of regulatory issues.

BMI believes the UK and Saudi Arabia present considerable growth opportunities for PLDT among its potential markets outside Asia. The UK telecoms sector already supports MVNO services, while the country is host to a large Filipino community, reflected by the amount of remittances to the Philippines. Saudi Arabia boasts even higher remittances than the UK. However, MVNO services are yet to take off in the kingdom. Although the Saudi telecoms regulator intends to issue up to three MVNO licences before the end of 2012, BMI notes that PLDT will face intense competition from other MVNOs looking to expand in the Middle East and North Africa, including FRiENDi Mobile, Renna Mobile, the UAE's du and Virgin Mobile.

Overseas Filipinos' Remittances By Countries (Selected) (US$ '000), 2007-2011
2011 Rank Country 2007 2008 2009 2010 2011
Source: Bangko Sentral ng Pilipinas
1 USA 7,564,887 7,825,607 7,323,661 7,862,207 8,481,164
2 Canada 595,079 1,308,692 1,900,963 2,022,611 2,071,489
3 Saudi Arabia 1,141,319 1,387,120 1,470,571 1,544,343 1,613,237
4 UK 684,007 776,354 859,612 888,959 956,639
5 Japan 401,612 575,181 773,561 882,996 913,548
6 UAE 529,963 621,232 644,822 775,237 877,981
7 Singapore 386,409 523,951 649,943 734,131 789,243
8 Italy 635,944 678,539 521,297 550,515 550,654
9 Hong Kong 383,160 406,134 339,552 362,524 367,864
10 Qatar 132,853 122,912 184,574 246,807 282,685
11 Australia 92,205 129,453 181,437 200,987 248,190
12 Taiwan 183,357 194,071 91,779 121,728 156,676
13 South Korea 95,434 81,642 97,035 112,215 156,619
14 Malaysia 59,302 80,377 86,030 95,633 124,369
15 Belgium 16,932 12,663 23,737 53,425 50,518
16 New Zealand 9,404 4,013 18,433 20,337 29,955
17 China (Mainland) 8,170 4,669 12,937 21,596 22,487
18 Indonesia 2,907 3,450 11,282 12,837 15,824
19 Thailand 995 1,125 2,682 4,494 6,214
20 South Africa 2,413 1,972 3,083 2,358 6,136
21 Angola 738 1,314 2,441 2,969 2,926
22 Mauritius 50 131 230 466 2,878
23 Vietnam 752 1,536 2,704 3,326 2,828
24 Nigeria 133 307 2,395 2,561 2,771
25 India 218 415 1,117 2,568 2,436
26 Cambodia 506 554 571 794 909
27 Macau 8,588 241 449 772 709
28 Laos 92 78 412 392 319

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