Data plans to drive iPhone 5 sales in PH: Globe, Smart
MANILA, Philippines (UPDATED) - Data services are what the two largest Philippine telecommunication companies said would boost their financial future as they launched their separate iPhone 5 plans at two events on Thursday, December 14.
Pangilinan-led Smart Communications and Ayala-led Globe Telecoms went head-to-head in launching their new iPhone 5 products and plans late Thursday for the midnight countdown to the December 15 start of their offers. (View Live Blog of the iPhone 5 countdown here.)
According to officials at the event, while iPhone’s plans on offer were very different depending on consumer need, the future would be on smartphones that would not highlight the traditional cash cows like short messaging service (SMS, or text) and voice calls.
“I think the iPhone 5 users are heavy data users and data is the future,” said Noel Lorenzana, head of the wireless consumer division at Smart.
“This year we’re going to grow 50% smartphone penetration. The secret is for people to get to experience data. I think we need to move from time-based offers to volume-based offers," he said. Telcos' previous unlimited offers for text and call services ate up profit margins in the past.
"It’s a matter of people being educated in terms of how to properly use data. For example, if I want streaming this is the amount of bandwidth I pay. If I just want Twitter feeds or Facebook updates, then this is the only bandwidth I need,” he added.
This is seen in changing consumer profiles according to Gil B Genio, international and business markets at Globe Telecom.
“People now realize the power of mobile internet. They love the capabilities and applications we have with mobile internet. Customers are wanting to do more things with their phone so they’re looking for surfing packages," he said.
Surfing and social media
This need for data was echoed by a number of consumers who had attended the Smart event in order to buy their iPhone 5.
“I just needed the unlimited internet. That was the important factor. I use it for surfing, watching videos, email,” said Francis Chua, 37, who works in advertising.
“Usually I want the package that has a good data plan. I want to use the net for surfing its really good when Smart uses the unlimited plan for the iPhone,” said Glibess Guiling a 23 year old eye doctor.
Smart held its launch in the glitzy Resorts World in Pasay City. It also hosted other smaller satellite launches across Manila, Cebu, Cagayan de Oro and Davao.
Globe which was the first provider to offer the iPhone with its services holding an exclusive contract between 2008 and 2010 held its event in the recently relaunched New Glorietta in Makati City. Both culminated with a countdown to a raffle and a midnight concert. American artist LMFAO hit the stage for Smart, while homegrown Filipino band, Bamboo, entertained visitors at Globes’ launch.
The new iPhone 5 is being toted as the thinnest and dlightest iPhone ever with a 4-inch Retina display, an advanced mobile operating stream and over 200 new features such as shared photo stream, facebook integration, all new Maps app and Passbook organization.
According to Lorenzana, most of the sales were already done before the launch.
“I think 80% would be pre-booked. We really wanted to push pre-booking. In the first place it allows us to forecast better and it allows us to push the experience of buying the iPhone,” he said.
Peter Bithos, head and senior advisor at consumer business, Globe Telecom said they're expecting a 50/50 mix of people who have pre booked and will buy in a venue or store.
The main difference between to two providers’ offerings is in their packages.
Smart’s pricing varies greatly depending on the plan you want giver users more options to decide what they want out of the package and how they want to spend their money.
“At the end of the day it boils down to what is your usage pattern. The plan gives you a range of choices; it caters to your usage behavior. The iPhone 5 is a great mobile data product. The data plans we are offering are very open so you can meet the kind of usage they need,” said Smart spokesperson Ramon Isberto.
The iPhone 5 postpaid package comes with 300 text messages, 300 voice call minutes, and unlimited data for Smart, while Globe’s package comes with a maximum of 875 free text messages, 125 voice call minutes, and unlimited data allocation as well.
“We’ve been traditionally very strong in the pre-paid market and again recently making stronger initiations in the post-paid market,” said Isberto.
Smart was a late-comer in the iPhone game. It first offered the 4s variant of iconic smartphone of the late Steve Jobs in 2011, after iPhone maker Apple decided to let go of exclusive contracts with phone operators globally. Globe used to exclusively offer iPhones in the Philippines.
Globe focuses on postpaid
Globe’s packages offer extra add ons such as 4-month insurance and a warranty with the purchase. There is also a 50% discount when purchasing accessories.
A new offer by Globe is the ‘reset’ program which allows subscribers to renew or extend their existing account to get the device at a discount.
Globe is also looking to attract customers in its postpaid market.
“This [post-paid] market as a whole can support anywhere between 10 to 20 million in post-paid accounts. Today it’s probably 3 million in total,” said Gil B Genio, international and business markets at Globe Telecom.
“As of September 30 we had 32 million SIMs. In the first 9 months of the year that 5% of those SIMs were postpaid and generated 32% of the mobile revenue. That’s a staggering difference between postpaid and prepaid. That’s what were trying to do is increase our distribution,” he added.
iPhone unit costs
Following the prepaid pricing scheme, Globe's iPhone 5 units are priced at Php35,400, Php40,800, and Php46,300 for 16GB, 32GB, and 64GB of internal storage, respectively.
At a slightly cheaper cost, Smart's prepaid iPhone 5 units are priced at Php33,600, Php38,780, and Php43,950 for the 16GB, 32GB, and 64GB units, respectively.
Globe provides a 16GB iPhone 5 unit for free if you decide to take advantage of Plan 2499 which comes with 10 minutes of free calls and 200 texts to all Globe and TM numbers, and you also get 5 minutes of calls and 25 texts to other networks.
Smart also offers either a 16GB or 32GB iPhone 5 unit for free with their Plan 2499 which includes unlimited and uncapped Internet connectivity.
“Globe is very attentative to customers. I have a representative that’s been assigned to me for years. If it ain’t broke don’t fix it. I’ve never had a problem that drives me away from the service,” said Leo G Dominguez, president of Resource Advisors who has been a Globe customer for 18 years.