The Philippines, an archipelagic nation, has long grappled with the complexities of delivering reliable broadband services to its diverse and remote areas.
Due to its sprawling geography, deploying fiber infrastructure has been a logistical and financial challenge, limiting the nation’s broadband availability and inflating costs. While fiber broadband has gained popularity for its speed and reliability, recent advancements in 5G-based Fixed Wireless Access (FWA) are offering a compelling alternative, transforming the broadband market.
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Fiber’s Initial Dominance and the Rise of FWA
Fixed Wireless Access played a prominent role in the Philippines’ broadband landscape, reaching an estimated 4.3 million users at its peak. However, early-generation FWA solutions often failed to deliver on speed and consistency, paving the way for fiber broadband to capture market share. Major players like PLDT and Globe capitalized on this, becoming the dominant providers of fiber-based services.
Fiber’s dominance, however, is being challenged. With the advent of 5G technology, FWA has significantly improved its performance, delivering faster speeds and greater reliability. Providers like Smart and DITO are leveraging the flexibility and lower deployment costs of 5G-based FWA to penetrate underserved areas. This shift has disrupted the broadband market, with consumers increasingly exploring FWA as an affordable and practical alternative to fiber.
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Intensifying Competition Among Providers
The broadband market is becoming increasingly competitive as established players like PLDT and Globe face pressure from Smart and DITO. These challengers are winning over broadband switchers by offering more affordable and easily deployable 5G FWA solutions. The shift is evident in market dynamics: since the third quarter of 2022, PLDT and Globe’s combined “win” share has dropped by 19%, while Smart and DITO have seen a 45% rise in their “win” share during the same period.
The growth of 5G FWA is particularly advantageous for consumers in remote areas where fiber deployment is slow and expensive. With minimal infrastructure requirements, FWA providers can swiftly expand their coverage, addressing a critical gap in the nation’s broadband availability.
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The Emergence of Prepaid Fiber
In response to mounting competition, fiber providers have introduced prepaid fiber offerings to attract cost-conscious consumers and lower the barriers to entry. Converge, one of the first to launch prepaid fiber in 2023, saw significant success through its Surf2Sawa (S2S) prepaid fiber internet product, increasing its Wins-per-Loss (WPL) by 36% within a year. Globe followed suit, tying its GFiber Prepaid to aggressive promotional campaigns and innovative value propositions. Subscribers are drawn to Globe’s offering of unlimited access to popular platforms like TikTok, video streaming services, and gaming sites, despite an overall data cap.
PLDT has also entered the prepaid fiber market, launching its service in mid-2024. While this move marked a strategic shift, PLDT has yet to achieve the same momentum as its competitors. Its WPL remains below the breakeven point of 1.0, highlighting the challenges traditional providers face in adapting to the evolving market.
These prepaid fiber offerings have not only intensified competition but also reshaped consumer expectations. By providing more affordable options, fiber providers are actively courting budget-conscious consumers who might have otherwise opted for FWA or satellite services.
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Shifting Trends in Broadband Switching
One of the most notable trends in the Philippine broadband market is the declining migration from Smart’s FWA services to PLDT’s fiber broadband. In 2023, PLDT captured 30-39% of Smart’s losses, but this figure has since dropped to 15-23%. This decline underscores the improved quality of 5G FWA, which is retaining more customers and reducing churn.
Meanwhile, prepaid fiber offerings have started to disrupt the market dynamics traditionally dominated by wired broadband providers. Converge and Globe, with their aggressive strategies, are steadily eroding the dominance of legacy players like PLDT.
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Government Initiatives and Future Outlook
The Philippine government’s National Broadband Plan emphasizes the importance of connectivity in driving economic growth and digital inclusion. By investing in infrastructure, implementing policy reforms, and encouraging market competition, the initiative aims to ensure broadband access for all Filipinos.
As the broadband market continues to evolve, both fiber and 5G FWA are poised to play critical roles. The competition between these technologies is likely to drive further innovation, better service quality, and lower costs, ultimately benefiting consumers.
With fiber providers introducing prepaid options and 5G FWA providers expanding their reach, the Philippine broadband market is undergoing a significant transformation. This dual approach is essential for addressing the unique challenges posed by the country’s geography and meeting the growing demand for reliable, affordable internet access.
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