Back in the old days, PLDT owns the only large-scale communications infrastructure: the huge network of telephone lines. Not that it was huge enough: A large part of the country lacked a telephone infrastructure. It was a huge business opportunity but the costs and logistics involved is overwhelming and there were few if any entrants. PLDT enjoyed a monopoly as virtually the only telecommunication provider.
Then there was a disruptive technology: cellular phones. It eventually developed to the point where costs and logistics became more manageable. Quite a few cellular phone service providers (Globe, Smart, PilTel, IslaCom, ExtelCom, DigiTel/Sun Cellular, etc) cropped up to exploit this now lucrative market and compete with PLDT. Of course, PLDT didn’t stand still and soon acquired Smart, the fastest way to get your own cellular phone infrastructure.
Then there was another disruptive technology: The Internet, a network of networks of computers communicating with each other. And it works over both wired and later wireless networks. The previously phone-only service providers capitalized on the capability of their infrastructure to handle the Internet and branched out to also become Internet service providers (ISPs).
Beginning with email (arguably the Internet’s killer application), followed by instant messaging, Voice Over IP (VOIP), and video calling, the Internet became first a viable and then a practical medium for communications. Soon it will likely be the primary medium for general communications. Because of it, former cash cows such as long distance calls and even SMS are drying up.
The battleground has thus shifted to the [Inter]network itself. Globe and PLDT strategy is to cover all possible ways of covering the last mile to reach the widest range of subscribers: leased lines, microwaves, satellite, dial-up and DSL over phone lines, cable, WiFi hotspots, 2G/3G/3.5G/4G wireless technologies, even broadband over power lines (BPL). The last is one reason why PLDT is interested in Meralco. In addition, Meralco’s posts can and do carry wires of all sorts.
More recently PLDT is acquiring DigiTel/Sun Cellular not in small part because of the popularity of Sun’s wireless Internet products. This would give PLDT a 70% market share. But this I don’t think it would reduce competition as most would think. Instead, I expect even stiffer competition as Globe will have to step up its game in order to retain or even grow its market share. That 70% that is an inviting slice and it’s got a formidable array of finances and assets to bite off a chunk.
But PLDT is not stopping there. Before it owned the devices at the end of the wire: phones. Today, many companies provide those devices: modems, routers, access points, phones, smartphones, computers, desktops, notebooks, netbooks, tablets, and most importantly the critical software that makes these devices useful. As existing markets become saturated, PLDT and/or its sister companies are branching out into these areas.
For starters, there’s the TelPad, a spliced up phone and tablet contraption. That’s a good start but the key is software. It would have been good if it had Facebook or even Twitter, software that were the reason for a significant drop in SMS use. But even something less lofty would do PLDT well and they know that.