Smart Communications
Smart Communications, Inc., commonly known as Smart, is a telecommunications company based in the Philippines that provides wireless voice, mobile data, broadband internet, and digital services to millions of subscribers.[1] As a wholly owned subsidiary of PLDT, Inc., it operates as the country's primary mobile network operator, holding a dominant position in the market alongside Globe Telecom in a duopoly structure.[2][3] Established on January 24, 1991, by Filipino investors including Orlando B. Vea and David T. Fernando, Smart commenced commercial operations in August 1994, initially focusing on cellular mobile telephony before expanding into prepaid services and data connectivity.[4][5] PLDT acquired full ownership in March 2000 through a share-swap transaction, integrating Smart into its broader telecommunications portfolio.[4] Smart has achieved notable milestones in service innovation, including the introduction of the world's first over-the-air electronic prepaid loading system and expansions into 5G networks, such as the rollout of 5G Standalone in regions like Iloilo City.[6] These developments have supported its growth as the leading wireless provider, with services encompassing mobile commerce, satellite communications, and partnerships for enhanced customer experiences.[1][7] However, the company has encountered controversies, including accusations from newer entrant DITO Telecommunity of abusing market dominance in interconnection agreements and a 2025 probe into allegations of a toxic workplace environment that prompted the resignation of its chief operating officer, Anastacio Martirez.[8][9][10] The Philippine telecommunications sector's duopoly has drawn broader criticism for persistent issues like inadequate network coverage and high costs relative to service quality, despite regulatory efforts to foster competition.[8]Company Overview
Founding and Ownership
Smart Communications, Inc. was incorporated on January 24, 1991, by a group of Filipino investors led by Orlando B. Vea and David T. Fernando, initially operating as Smart Information Technology, Inc. The founding aimed to position the company for entry into cellular mobile services amid anticipated deregulation of the Philippine telecommunications sector, which had been dominated by monopolistic fixed-line providers.[11] Early ownership involved a mix of local and foreign investors; by the late 1990s, significant stakes were held by First Pacific Group (a Hong Kong-based holding company) and Nippon Telegraph and Telephone (NTT) Corporation of Japan, with First Pacific controlling around 56% through its Philippine affiliates. Smart launched commercial cellular operations in 1995 using analog technology before transitioning to digital GSM networks. The company went public on the Philippine Stock Exchange in 1996.[12][13] On March 24, 2000, Philippine Long Distance Telephone Company (PLDT) completed a share-swap transaction acquiring all outstanding shares of Smart from First Pacific Group and NTT, issuing approximately 35.1 million new PLDT common shares in exchange and making Smart a wholly owned subsidiary. This integration bolstered PLDT's wireless segment, with Smart operating as its primary mobile arm.[14][12] As of 2025, Smart remains 100% owned by PLDT, Inc., which is publicly listed on the Philippine Stock Exchange and New York Stock Exchange but effectively controlled by First Pacific Company Limited—the largest shareholder with around 27% direct and indirect ownership through affiliates, ultimately tied to the Indonesian Salim Group's conglomerate interests. PLDT's chairman, Manuel V. Pangilinan, oversees strategic direction, reflecting First Pacific's influence since its initial investment in PLDT in 1998.[15][14]Core Services and Business Model
Smart Communications, a wholly owned subsidiary of PLDT Inc., primarily delivers wireless telecommunications services in the Philippines, encompassing mobile voice calls, short message service (SMS), and data connectivity via both prepaid and postpaid plans.[16] These core offerings are supplemented by mobile broadband solutions under the SMART Bro brand, which provide high-speed internet access for fixed and portable use, and digital services including mobile financial transactions, content streaming, and enterprise connectivity solutions.[17] The company's service portfolio emphasizes 4G LTE and 5G network access, with innovations like unlimited data promotions and bundled device plans to cater to diverse consumer needs.[18] The business model is subscription-driven, generating revenue through airtime charges, data consumption fees, and value-added services such as international roaming and premium content subscriptions, with a strategic focus on the base-of-the-pyramid market segment via low-cost, flexible prepaid options that dominate subscriber bases.[19] Prepaid services, which allow pay-as-you-go loading without contracts, accounted for the bulk of Smart's approximately 60 million mobile subscribers as of 2024, reflecting adaptations to affordability constraints in emerging markets.[20] Postpaid plans, targeting higher-value users with fixed monthly fees for unlimited or tiered data allowances, have shown accelerated growth, contributing a 16% year-on-year revenue increase in recent periods through premium plans like Infinity Plus at P9,500 monthly, which include shared connectivity and priority support.[21][18] Overall, this dual-structure model balances volume from mass-market prepaid with margin expansion from postpaid and broadband, supported by infrastructure investments to enhance average revenue per user (ARPU).[22]Historical Development
Inception and Early Expansion (1991–2000)
Smart Communications, Inc., originally incorporated as Smart Information Technology, Inc., was established on January 24, 1991, by a consortium of Filipino investors led by Orlando B. Vea and David T. Fernando.[4][23] The founding anticipated the impending liberalization of the Philippine telecommunications sector under Republic Act No. 6849, enacted in 1990, which opened cellular mobile services to private entities beyond the state-controlled monopoly.[4][23] The company secured a congressional franchise to operate cellular mobile telephone services, positioning it as a pioneer in the nascent market where total mobile subscribers numbered around 10,000 nationwide in 1990.[24][4] Following test operations in May 1993, Smart launched commercial cellular services in December 1993, initially leveraging analog technology to provide voice and basic messaging in urban centers like Metro Manila.[4][23] To fuel infrastructure buildup and network rollout, Smart attracted strategic investors, including Hong Kong-based First Pacific Company Limited, which provided capital for cell site deployments and capacity expansion amid growing demand.[4] By the mid-1990s, the company had established itself as the first major entrant in the liberalized cellular market, competing with emerging rivals like Globe Telecom, which followed with digital GSM services in 1994.[4] Subscriber numbers expanded rapidly through the late 1990s, with Smart capturing approximately 46% market share by 1997 amid total cellular subscribers reaching 1.34 million, rising to dominance as the sector grew to 1.73 million users by 1999.[25] This growth reflected aggressive network investments and prepaid service innovations tailored to price-sensitive consumers in a developing economy.[24] In September 1999, Philippine Long Distance Telephone Company (PLDT) announced its acquisition of Smart through a share-swap deal valued at issuing 35.1 million new PLDT shares for full ownership, finalized on March 24, 2000, integrating Smart as a key wireless arm and enabling synergies in fixed-mobile convergence alongside a strategic alliance with Japan's NTT Communications.[26][12] The move bolstered PLDT's position in mobile ahead of intensified competition into the 2000s.[26]Growth Amid Competition (2001–2010)
During the early 2000s, Smart Communications, as a subsidiary of PLDT following its full acquisition in March 2000, capitalized on the shift from fixed-line to mobile services by aggressively expanding its prepaid subscriber base, which appealed to price-sensitive consumers in the Philippines.[27][28] This strategy drove significant growth, with Smart maintaining a leading market share of approximately 56% in the GSM segment alongside its affiliate Piltel as of mid-2001.[29] By June 2004, Smart's GSM subscriber count reached 12.5 million, with 98% on prepaid plans, reflecting its focus on low-income markets through affordable, no-contract options that contrasted with competitors' emphasis on postpaid services.[19] Intensifying competition emerged from Globe Telecom, Smart's primary rival, which invested in transmission infrastructure to challenge Smart's dominance, as evidenced by Globe's $21.7 million contract in May 2001 for network upgrades.[30] The market landscape shifted further in November 2003 with the launch of Sun Cellular by Digitel, introducing disruptive "unli" (unlimited) intra-network calling and texting plans at fixed low fees, which eroded margins across incumbents by attracting budget-conscious users and prompting aggressive pricing responses from Smart and Globe.[31] Despite this pressure, Smart preserved its subscriber lead through network expansions and targeted promotions, adding around 915,000 net subscribers in 2004 while holding about 58% market share in key segments.[32] Technological advancements bolstered Smart's position, including the rollout of 3G services on February 14, 2006, in major cities, enabling video calling, streaming, and higher-speed data ahead of widespread adoption.[33] Wireless revenues grew 8% year-over-year to PHP 36.7 billion in the first half of 2005, underscoring sustained demand amid competition.[34] By 2010, Smart's combined subscriber base expanded to 45.6 million after netting 4.3 million additions that year, solidifying its role as the market leader despite Sun Cellular's gains in the prepaid space.[28] This period highlighted Smart's resilience, driven by PLDT's infrastructure investments and a prepaid model that aligned with the Philippines' economic demographics, even as rivals like Sun forced industry-wide adaptations in pricing and service bundles.[19]Digital Transformation and 5G Era (2011–2025)
Smart Communications initiated its digital transformation with the commercial launch of the Philippines' first 4G LTE service on August 25, 2012, targeting high-speed mobile broadband in key urban areas such as Makati, SM Mall of Asia, and the University of the Philippines.[35] This rollout shifted focus from voice-centric to data-driven services, enabling theoretical speeds up to 42 Mbps via dongles and plans like LTE Plan 3500 with 10 GB monthly caps.[36] Subsequent expansions incorporated additional LTE bands (1800 MHz and 850 MHz), enhancing coverage and capacity amid rising demand for mobile internet.[11] The company invested heavily in infrastructure to support this evolution, with PLDT and Smart allocating nearly PHP 175 billion from 2011 to 2015 for network buildup, including cell sites and backhaul upgrades.[37] By the late 2010s, these efforts facilitated broader LTE deployment, such as in Palawan province, while integrating fiber optic expansions—reaching over 1.1 million kilometers by March 2023—to underpin wireless broadband.[38][39] Capital expenditures continued into the 2020s, with PLDT guiding PHP 88-92 billion in 2021 for 5G readiness and adjusting to around PHP 50 billion annually by 2025-2026 for sustained upgrades, prioritizing spectrum efficiency and vendor negotiations.[40][41] Entering the 5G era, Smart commercially launched non-standalone 5G services on July 30, 2020, in Manila's business districts, followed by the world's first commercial 5G Standalone (SA) sites in Makati City in October 2021, enabling advanced features like network slicing.[42][43][44] Coverage expanded rapidly, with plans for nationwide SA rollout over two years starting in Iloilo City in September 2025, alongside 5G Max Cities initiatives.[45][46] By Q1 2025, Smart held 44% of the wireless broadband market share, driven by 5G Home WiFi and subscriber growth, while scaling back 3G to reallocate spectrum.[47][48] Complementing network advances, Smart introduced digital platforms like the GigaLife app in September 2020 for prepaid users, expanding to postpaid in October 2020 to enable real-time monitoring of usage, bill payments, and add-on registrations; it surpassed 10 million users by October 2021 and rebranded to the Smart app in 2023.[49][50][51] In June 2025, the company unified its digital storefront for over 50 million subscribers, streamlining device purchases, plan renewals, and number porting.[52] Cloud modernization with Amdocs completed a key phase that month, enhancing data platforms and supporting broader digital ecosystem integration, including fixed wireless access tests achieving near-gigabit speeds.[53][54]Network and Technology
Spectrum Allocation and Radio Frequencies
Smart Communications, operating under spectrum licenses granted by the National Telecommunications Commission (NTC), utilizes a range of radio frequency bands for its 2G, 3G, 4G LTE, and 5G networks across the Philippines.[55] These allocations support voice, data, and broadband services, with low-band frequencies like 700 MHz and 850 MHz enabling wide coverage, mid-band options such as 1800 MHz and 3500 MHz providing capacity for urban areas, and high-band TDD spectrum enhancing throughput.[56][57] The company's 2G GSM services operate on the 900 MHz (E-GSM) band for uplink 880–915 MHz and downlink 925–960 MHz, alongside the 1800 MHz (DCS) band for uplink 1710–1785 MHz and downlink 1805–1880 MHz, supporting legacy voice and basic data via GPRS and EDGE.[55] For 3G UMTS/HSPA+, Smart employs Band 1 at 2100 MHz and Band 8 at 900 MHz, with the latter addition noted in regulatory updates around 2024.[55]| Technology | Band | Frequency Details | Key Usage |
|---|---|---|---|
| 4G LTE | B1 | 2100 MHz | Urban capacity, launched 2012[11] |
| 4G LTE | B3 | 1800 MHz+ | Expanded LTE coverage[55] |
| 4G LTE | B5 | 850 MHz | Rural and indoor penetration[58] |
| 4G LTE | B28 | 700 MHz APT (703–803 MHz, 5–20 MHz bandwidth) | Digital dividend for nationwide LTE, NTC-approved 2016[57][55] |
| 4G LTE | B40 | TD 2300 MHz | High-capacity TDD deployment[55] |
| 4G LTE | B41 | TD 2500 MHz | Additional TDD spectrum for data-intensive services[55] |
| 5G NR | n28 | 700 MHz | Low-band 5G for extended coverage[55][59] |
| 5G NR | n41 | 2500 MHz (2496–2690 MHz) | Mid-band capacity boost[55] |
| 5G NR | n78 | 3500 MHz (3300–3800 MHz, 10–100 MHz bandwidth) | Primary mid-band for 5G rollout, supporting high-speed urban deployments[55] |