Social, smartphones shaping Philippine mobile landscape

MANILA--Since its emergence in the late 1990s, no other application has succeeded in toppling SMS or text messaging as the killer app in the Philippines where it is now used every day and serves as a cash cow for mobile operators.

Over the years, local telcos have introduced various value added services (VAS) in their mobile offerings, but these have centered on SMS as there was little that could push consumers to pay for the service. Video calls, which came with the advent of 3G technology, failed to lure consumers away from SMS.

However, the emergence of social media and smartphones, serving as a bridge between the Web and the mobile platform, could dramatically change that.

The country's two major mobile carriers, Smart Communications and Globe Telecom, have taken notice of these trends as both companies recently launched a slew of services anchored on social media and Web-enabled devices such as smartphones.

PLDT-owned Smart, for instance, rolled out a number of VAS targeted for markets and communities that are on the forefront of these developments, including a service that allows subscribers to send text and photos to update their profiles on platforms such as Facebook and Twitter. It also offers messaging services such as Go Mail push-mail service and Nokia Messaging, which are aimed at the growing base of users using push-mail services.

In the case of Globe Telecom, through its subsidiary Entertainment Gateway Group (EGG), the carrier unveiled a "surf-all-day" service to give "social and budget-conscious youth" unlimited browsing within WAP (Wireless Application Protocol) sites of Facebook, Twitter, Plurk, Wikipedia and Ping for 20 pesos (43 US cents).

Ramon Isberto, head of public affairs of Smart, says in an e-mail interview that the prospects of finding a new killer app are big in VAS segments that interact and mash with the Web.

"These areas have been available on the mobile and on the Web for the better part of the decade, albeit separately, and bridging both worlds is really where the positive prospects are," Isberto explained.

A spokesperson from Globe's EGG unit, told ZDNet Asia in an email, that the "ease of content discovery and access" is still the crucial factor in the success of a VAS offering, whether on mobile or in the Web.

"The challenge in a country like the Philippines is the variety of devices in the market and knowing the consumer profile using the handset," he said. "Mobile users must be provided with an easy way to search and access the VAS product they need and when they need it."

The Globe subsidiary acknowledged, however, that mobile operators and content providers need to keep their subscribers engaged through their Web or mobile client applications for access to a wide range of VAS.

"The obvious next step would be to have these portals available in sites like Facebook, where most people seem to spend a significant amount of their time online," the company spokesperson said.

No longer about traditional VAS
While the outlook for Web-enabled mobile VAS is promising, Isberto noted that the VAS market has slowed down in recent years.

In fact, he said the Web, particularly social media, had a somewhat adverse effect since consumers preferred spending their time on Facebook rather than subscribing to mobile services.

"The growth of the Internet locally, both on the PC and on mobile, have also impacted traditional VAS as we know it," he explained. "User behavior has changed as the early adopters and heavy users of traditional VAS have moved on to other means of getting these services, specifically from the Internet."

Globe's EGG spokesperson agreed in part, noting that the subscriber's need to connect and be social among peers and family outweighs the need to have the latest ringtone, wallpaper or game.

Other factors have also impacted the growth of VAS in the Philippines, Isberto observed, citing in particularly the regulations of the NTC (National Telecommunications Commission) that prohibit telcos and VAS providers from marketing their services via text messaging.

The Smart executive said social media is a double-edged knife that can have both positive and negative effects on the VAS market.

The one-to-many concept of promoting content and services, he noted, has evolved to a many-to-many model as a result of social media and viral content. "This presents a whole new opportunity to drive the VAS market," he added.

On the negative end, Isberto said social media is taking away the attention of the user and traffic usage away from traditional mobile content to the Internet.

"I see the initial effects of social media to the VAS market to be negative, but as we start using social media to promote VAS and start seeing social media as a form of VAS as well, then the effects will be very much positive and we could see a resurgence of the VAS market, albeit, in different form and with various technologies," he said.

Globe also subscribes to the belief that the need to connect, though powerful Web-enabled smartphones, will drive users to visit popular mobile sites on their mobile phones--the same social need that can lead to opportunities for a new type of mobile VAS.

"The VAS market can find opportunities in social media by looking at insights driving the social boom," the company spokesperson said. "Coupled with user information and powerful analytics, VAS should be able to effectively target consumers," it concludes.

Melvin G. Calimag is a freelance IT writer based in the Philippines.