MANILA, Philippines – Filipinos are expected to spend less on mobile telephone prepaid call and text credits and other forms of “highly discretionary spending” in the months ahead, as consumers struggle to cope with the looming rice shortage and soaring food prices.Rep. Joseph Santiago, former chief of the National Telecommunications Commission, said telecommunication service providers will encounter a significant decline in prepaid load sales as households scramble to adjust their budgets to allow more spending for food.
“In fact, retailers are already getting squeezed. Many sari-sari stores that used to sell up to P3,000-worth of load every day now manage to sell only P1,000 daily,” said Santiago, chairman of the House committee on information and communications technology.
“In hard times, highly arbitrary and optional consumer spending are usually the first to go,” he said.
Retail sales of prepaid call and text credits, made popular by the award-winning “pasaload” scheme, have been a powerful revenue driver for telecommunication service providers that, in turn, have been key generators of economic activity nationwide.
To cope with the potential slowdown, Santiago said he sees the country’s two leading mobile telephone service providers – Smart Communications Inc. and Globe Telecom Inc. – stepping up their promotional activities in the months ahead.
The mobile telephone boom has established the Philippines as the world’s text messaging capital.
The country had a total of 50.3 million mobile telephone users at the end of 2007, or around 57 percent of the national population of 88.7 million.
The average Filipino mobile telephone user sends 10 to 15 text messages every day. This implies that a total of 755 million text messages are sent daily.
Santiago said he still sees Smart and Globe picking up new subscribers in the months ahead.
“Their subscribers will continue to grow, but ‘the law of large numbers’ will keep them from increasing their subscribers at last year’s rate of 25 to 30 percent,” he said.
Smart and Globe expect to add a combined four to five million in new users this year. – GMANews.TV