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Smart expects 2024 to be better as this year’s activations decline

SMART Telecommunications, Inc. is expecting a better 2024 after seeing a decline in gross activations this year amid the required registration of subscriber identity module (SIM) cards.

“I think next year will be a better year for Smart because, in the end, the SIM registration is a very disruptive activity that we have to focus our marketing not on [value propositions] but rather focusing on getting the subscribers to register because it is a challenge,” said Lloyd Dennis R. Manaloto, first vice-president and head of prepaid, content, and business development at Smart, in a chance interview last week.

“The gross activations are half of what they were before but it should normalize because the revenue-generating base, that is still stable,” he said.

In the first quarter, the company saw a 7.5% decline in its total mobile subscriber base to 65.03 million from 70.28 million.

In a previous regulatory filing, its parent firm PLDT Inc. cited a policy change in the first quarter to recognize a prepaid mobile subscription only when the subscriber activates and uses the SIM card in view of Republic Act No. 11934 or the SIM Registration Act.

Meanwhile, subscribers are now considered inactive if they do not reload within 120 days after the expiration of the last reload.

“When you look at SIM registration, you’ve seen it being implemented in other countries like Indonesia and Pakistan. Typically, what happens is there is an initial shock decline, but over time it starts to increase as well,” Mr. Manaloto said.

“Later on, it will adjust, and in the next few years, it should increase. That’s how we see SIM registration happening in the Philippines similar to what we have seen in other countries,” he added.

Although there is an initial decline in the subscriber base, Mr. Manaloto said that SIM registration will result in a cleaner and more efficient base.

“It will have initial decline primarily first on a subscriber base but it will also, in a way, make the subscribers more efficient, and average revenue per unit (ARPU) is gonna go up,” he said.

“So more or less, our revenues are actually flat. They are not declining so that is what we are seeing now. And then over time, we will start to see an increase,” he added.

For prepaid, the company saw a 6.9% increase in its gross monthly ARPU in Smart to P124 in the first quarter from P116 last year, while it recorded a 2% increase in Talk N’ Text to P96 from P94.

For postpaid, the gross monthly ARPU for Smart declined 12.6% to P720 in the first three months of the year, while it jumped 22% for Sun to P547 from P447. — Justine Irish D. Tabile

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