Smart to subsidize 4G transition of 3G users

MANILA, Philippines — Mobile giant Smart Communications Inc. plans to subsidize the upgrade of 3G subscribers to 4G handsets, as it plans to accelerate the shutdown of legacy assets this year.

In an interview with reporters, Smart network head Eric Santiago said the firm is offering several options for customers who will be affected by the scheduled closure of 3G services next year.

For one, Smart plans to subsidize a portion of the cost for upgrading to 4G phones, especially in areas where subscribers were so used to connecting to a 3G network.

“The goal for us is to migrate some of our users who have 3G to utilize 4G/LTE. We would like to ensure that they can still stay connected,” Santiago said.

As of 2022, Smart maintains a customer base of 66.3 million nationwide. Of this figure, Santiago said eight percent or 5.3 million remain connected to 3G services, even as Smart has upgraded its network to 4G/LTE and 5G in most areas.

By 2024, however, Smart may sustain a few of its 3G bases for communities where the majority of subscribers access the internet through the legacy network.

Smart covers more than 97 percent of cities and municipalities across the archipelago through its asset base of 38,758 4G/LTE stations and 17,064 3G bases as of 2022.

Last year Smart’s parent PLDT Inc. examined the viability of keeping the 3G network in its fold and came upon the decision to close the legacy service by 2024 on dwindling 3G traffic.

“It was determined that the number of 3G devices in the market continued to decline, resulting in low 3G traffic. Furthermore, the demands of the subscribers are shifting to LTE and 5G, which offer faster high-speed data services,” PLDT said in its financial statement for 2022.

In turn, Smart suffered a 30-percent increase in depreciation and amortization expenses to P52.66 billion last year  from P40.46 billion in 2021. The wireless giant expects its depreciation costs to remain elevated as it shortens the lifespan of legacy assets like 3G bases.

On the other hand, Santiago said PLDT would slow the expansion of its fiber cables this year as it aims to maximize first the existing network made up of 866,000 kilometers in domestic fiber and 231,000 in international fiber.

PLDT will reallocate and redeploy some of the fiber cables to ensure they are utilized and should return to expansion mode by next year to meet the additional demand for connectivity.