Philippine Long Distance Telephone taps Cisco for network upgrade

Filipino operator Smart Communications revealed on Monday that it expects its stripped-down approach to delivering a smartphone experience to customers to drive an increase in ARPU of up to 50%. The mobile provider's chief innovation officer Alex Ibasco took the opportunity during the inaugural Total Telecom World in London to update the industry on the company's progress with its Netphone service, which offers handsets running a modified version of Android with a simplified user interface that is designed to enable users to access mobile data services and applications without incurring expensive bills. "We need to make [Netphone] very affordable," said Ibasco, who explained that monthly ARPU in the Philippines currently stands at just $4, while the current Android user base comprises only 100,000 of the country's 78 million mobile phones. "Less than 4% of the population has broadband and over 70% [of mobile subscribers] have a sub-$100 device," he noted. However, Smart expects Netphone to drive a significant increase in both ARPU and Android uptake. "We're being very conservative in our projections, but we are aiming for 1 million Android users [in 2012], and expecting a [positive] 30%-50% ARPU impact," said Ibasco. Netphone – unveiled in February this year – is designed to take price-sensitive users into consideration by providing low-bandwidth widgets for various social networks, and a Wholesale Applications Community (WAC)-enabled app store aimed at keeping data consumption to a minimum. The service also includes a user-controlled toggle that can be used to block bandwidth-intensive third-party applications and Websites. "We're not ready for high-bandwidth services," Ibasco added. "Our network is not ready for the [traffic] load." The first Netphone handset, which went on sale in November, was priced at $220 unsubsidised, and Ibasco said Smart aims to launch a sub-$100 device in 2012. The modified user interface is also aimed to make smartphones easier to use. "Smartphones for a lot of people in the emerging world are very intimidating," Ibasco said. "Early models for Android were not very user friendly." The vast majority of mobile users still use feature phones, mainly because the average handset replacement cycle for a prepay user in the Philippines is five years, he explained, adding that Netphone is also aimed at increasing that replacement frequency.