Filipinos spending less on mobile services amid soaring inflation

A VENDOR shows different SIM cards for sale at a stall in Quiapo, Manila, Oct. 8. — PHILIPPINE STAR /KRIZ JOHN ROSALES

By Arjay L. Balinbin, Senior Reporter

MANY FILIPINO CONSUMERS are “reloading” less credits on their prepaid mobile phone accounts and opting for more affordable offerings as they tighten their belts amid soaring prices of basic commodities, the country’s major mobile service providers said. 

Inflation accelerated to 7.7% in October, the fastest pace in nearly 14 years, as the prices of food and utilities continue to rise.

“The impact of inflation… has been apparent as customers trade down connectivity needs with more basic household requirements, making bare necessities their priority,” Globe Consumer Mobile Business Head Darius Jose Delgado told BusinessWorld in a recent e-mail interview.

Globe has seen a continued shift to mobile data services from voice and text services, amid the accelerated digital adoption of many Filipinos.

“This has led to the growth of Globe’s mobile data traffic by 24% year on year, from 2,081 petabytes in the first half of 2021 to 2,177 petabytes in the same period this year,” Mr. Delgado said.

Mobile data accounted for 77% of Globe’s total mobile service revenues of P78.9 billion as of the first half, compared with 73% a year ago. Mobile data revenues rose 3% to P54 billion in the January to June period.

Smart Communications, Inc., the wireless arm of the PLDT group, also expects “strong headwinds” such as the impact of inflation on consumer wallets and active competition.

Consumers are either reducing the frequency of their top-ups or switching to more affordable offers, Francis E. Flores, senior vice-president and head of consumer business group-individual at Smart, said in a recent interview.

“Some consumers used to reload every day, but now they just reload two to three times a week because they have cut back on mobile internet services,” Mr. Flores said in Filipino.

PLDT last week told the stock exchange its mobile service revenue, which includes Smart Communications and TNT, dropped 5% year on year to P61.7 billion as of end-September.

Mr. Flores said the company expects a boost ahead of the holidays.

“We are going to launch offers to capitalize on the fact that people are really in the spending mode this Christmas, and that’s why we are more optimistic for the fourth quarter,” he said during a briefing.

Mr. Flores expects that 2023 will remain a challenging year for Smart. “It will still be challenging like this year, and probably even more. But as long as we keep our eyes and heart on customer needs, [we] will be able to thrive during the hardships next year.”

Globe and Smart recently launched low-cost offers to mitigate the impact of soaring prices on consumer budgets.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.