Philippines : The SMS capital of the world

My colleagues based in the Philippines, always mentioned the SMS craze prevalent amongst mobile phone users. I started investigating the key drivers of this phenomena and came with the following analysis. There are two mobile operators namely Globe and Smart, splitting nearly equally the 11 million subscribers. The number of SMS per user is approximately greater than 20 per day. What was very interesting is that 38.6% of ARPU (Average Revenue Per User) for Smart and 33% of ARPU for Globe consisted of data (all SMS) vs voice. These numbers are way higher that NTT Docomo which provides many more sophisticated data services.

Indeed, the shift to mobile and wireless communications is largely a reaction to the low Internet penetration rate in the country as compared to that of cell phones. From six million by the end of 2000, the number of cell phone subscribers has grown to close to 11 million sending an average of 100 to 120 million text messages a day. In contrast, Internet users barely reach three million. This is very similar to why NTT-Docomo took off in Japan, where internet access was exhorbitanatly expensive, pay as you use and consume model of NTT Docomo satisfied the data hunger. The Philippine Archipelageo consists of 17,000 islands and providing mobile connectivity was easier than laying cable for dialup or broadband.

Its all about connecting people. Telephony connected with voice capability. Mobile Phones provided voice and data. We have seen in two cases, whenever internet access through dial up has been expensive and cumbersome, mobile data capability has been the messiah.