Smart to stop offering ‘dumb’ phones

MANILA, Philippines—Leading carrier Smart Communications will phase out all feature phones from its postpaid plans amid the increasing demand and declining prices of smartphones.

In a briefing, Smart postpaid manager Guia Laurel said demand for smartphones had reached record levels and that there no longer was any order for feature phones, also known as “dumb” phones.

Laurel said the growing demand for smartphones suited Smart’s efforts to strengthen its postpaid business and raise average revenue per user (Arpu) levels.

“Starting March, the minimum phones we’ll be offering for postpaid are Nokia Asha phones, which are marketed as entry-level smartphones,” Laurel told reporters. “And smartphones are getting cheaper,” she said.

She said offering smartphones on all postpaid lines would increase the chance of users availing themselves of Internet-based services, which would raise the company’s revenue.

Smart said that today, the average Arpu for a postpaid line is P1,100. This is significantly higher than the P140 Arpu per month for prepaid users. At around 800,000, postpaid users currently make up just three percent of Smart’s total subscriber base.

Smart public affairs head Ramon Isberto said that apart from the higher spending levels, postpaid users were also more loyal to their telco networks. “The relationship with the subscriber is also more direct because we know who the subscribers are,” he said.

“The prevalence to use data services is also much higher,” Isberto said.

Smart’s postpaid user base grew by 24 percent year on year in the first quarter of 2013. Revenue also rose 12 percent in the same period.

He said the company would work to increase its postpaid users to about five percent of its total subscriber base.