Telco giants PLDT and Globe Telecom are poised to benefit significantly from the Bangko Sentral ng Pilipinas’ (BSP) decision to lift the moratorium on new electronic money issuers.
This move is expected to unlock new revenue streams for telco firms, diversifying their offerings beyond traditional telecommunications services.
The moratorium, initially imposed in 2021 and extended until December 2024, has hindered the growth of the digital financial services sector. Its lifting provides a crucial opportunity for telecom giants to expand their digital portfolios, particularly in mobile financial services, and mitigate the impact of declining traditional revenues.
According to BMI, a Fitch Solutions company, this shift is crucial as the telecommunications sector faces increasing pressure from intense competition and evolving pricing strategies.
PLDT and Globe, facing declining revenues in the second quarter of 2024, have been actively seeking new growth drivers. They have invested in advanced technologies like artificial intelligence (AI) and the Internet of Things (IoT) to diversify their offerings.
“The moratorium’s end should provide the telcos with the rationale to expand their offerings and innovate to appeal to a wider addressable market,” BMI said.
Leveraging their existing experience in mobile payments and basic financial services, established telecom players are expected to have a significant advantage over new entrants, it added,
The licensing process for electronic money issuers requires stringent criteria, including robust business models, market research, and a strong track record in risk management.
While the BSP has granted 42 licenses to non-bank institutions and 27 to bank affiliates, the entry of new players will further intensify competition and drive innovation in the sector.
