Mobile data, network upgrades drive up Smart service revenues

Smart Communications Logo

Capitalizing on its much-improved mobile data network, PLDT wireless subsidiary Smart Communications, Inc. (Smart) has posted two sequential quarters of top line growth for the first time in eight quarters on the back of rising mobile data revenues.

The wireless individual business of Smart, Sun and TNT registered P14.8 billion in service revenues for the first quarter of the year, a 2% increase from a year ago. Mobile data revenues jumped 21% to P6.5 billion in the first quarter of this year compared to the same period a year ago, as the company continues its pivot toward data, which now accounts for 44% of the revenues of the wireless individual business.

“The contribution from data and digital to our total business continues to grow steadily. We expect this to accelerate further with the increase in smartphone ownership and as we transform our networks into powerful platforms for delivering digital services and solutions. This will enable us to more effectively pursue our goal of becoming the preferred digital partner of our customers,” said Ernesto R. Alberto, PLDT and Smart Executive Vice President and Chief Revenue Officer.

Upping the ante in network upgrades

Backed by improved network experience, LTE migration efforts also showed significant take-up, with the number of LTE subscribers tripling year-on-year, posting an increase of 211%. Luzon, where more than 50% of the LTE sites were rolled out in the past six months, posted a 5% revenue growth in the first quarter.

In the first three months of 2018, Smart installed over 1,300 more LTE base stations across the country, raising the total count to over 10,000. These base stations use various radio frequency bands, specifically the 700 MHz band for better coverage and indoor penetration, and the 1800 MHz and 2100 MHz bands for additional capacity.

The installation of multiple LTE base stations in existing cell sites paves the way for the activation of LTE-Advanced (LTE-A), which can deliver significantly faster mobile data services to customers, as well as carrier aggregation, which allows much higher mobile data speeds are achieved by combining the capacity of two up to five frequency bands.

“On mobile, as shown by the experience of other countries, the network roll out must be accompanied by the adoption of LTE-Advanced-capable mobile phones and devices,” said Mario G. Tamayo, PLDT-Smart Senior Vice President for Network Planning and Engineering.

New products, handsets

To make more LTE-A-capable handsets accessible to more consumers as well as to stimulate data usage, Smart launched new postpaid and prepaid service packages. The new GigaX postpaid plans, for example, offered up to 15 GB of open-access data plus additional 10 GB for video streaming, and the latest handsets such as the Samsung S9 and Huawei Mate 10 Pro, among others.

Smart also launched a path-breaking partnership with YouTube to offer one hour of free viewing every day for prepaid Smart, TNT and Sun customers, which runs until July 15.

“We want to give our customers a chance to try out video streaming on their mobile phones on the country’s fastest mobile data network. YouTube is the ideal partner for this initiative because they offer an unmatched library of compelling content on everything, from entertainment to information and education,” said Oscar A. Reyes Jr., Senior Vice President of Consumer Business Market Development for PLDT and Smart.

Smart, TNT and Sun prepaid customers also enjoyed a variety of load products bundled with video streaming, such as the GigaSurf50 (1GB of open access data plus 300 MB for YouTube access, valid for 3 days). Initially available to Smart prepaid customers, GigaSurf50 was recently also offered to TNT customers, resulting in an increase in data usage and video streaming among old and new TNT subscribers.

Improved experience, businesses

In areas like Quezon City, where Smart has already activated carrier aggregation combining up to 5 frequency bands, internal tests showed customers enjoying download speeds ranging from 30 Mbps to 200 Mbps, depending on density of traffic and handset capability. As a result, average daily data revenue and LTE device usage in Metro Manila’s most populous city grew by 23% and 33%, respectively, between September 2017 and March 2018.

In Marikina, where 5 component carrier (5CC) aggregation has likewise been launched, small business owners and retailers have also reported an increase in earnings, boosted by improved mobile internet experience in their area.

Smart has also expanded its network coverage to include high foot traffic areas such as tourist spots like Baguio, Sagada, and Batanes, among others, in line with its commitment to the National Telecommunications Commission to bring high-speed mobile data using LTE, LTE-A and 3G to over 90% of the country’s cities and municipalities.

Parent company PLDT has committed historic levels of resources to support network transformation. Capital expenditures is expected to reach P58 billion this year, including allocations for the aggressive rollout of its fiber broadband service, which also supports the stepped-up deployment of the mobile network by providing high-capacity links for cellular base stations.