DUE to the enormous and growing demand for data, Philippine telecommunications companies have been spending roughly a quarter of their revenues on capital expenditures over the past few years.
Ericsson Philippines and Pacific Islands President and Country Manager Sean Gowran said from 2012 to 2015, local telecom-service providers have been investing in network infrastructure at a level significantly higher than the global average in terms of capital versus revenues.
The global average, he said, is at 16 percent of revenues over capital.
He said significant investments in Philippine networks are a result of the enormous growth in data traffic in the country, driven, in large part, by video demand and the increased use of smartphones.
“Migration to newer technologies, such as LTE, is the key to providing an efficient network and better customer experience to subscribers,” said Gowran, adding, “service providers must also capitalize on various business industries’ digitalization-revenue opportunities.”
Neighboring Asean countries, such as Thailand and Myanmar, put back 20 percent of their revenues into capital over the three-year period, while Vietnam’s ratio was at 17 percent.
Countries such as Singapore and Malaysia were even lower, with a capital level of less than 15 percent. Only Indonesia spent more than the Philippines, at 27 percent.
Both PLDT Inc. and Globe Telecom Inc. increased their capital-to-revenue ratio even further in 2016, as they spent 30 percent of their total revenues on network improvements and expansion.