Mobile wireless application development (MWAD) refer to short programs that are commonly used in mobile phone communications an similar activities. The main market for such programs are typically the telecommuncations firms or carriers. There are some 30 to 50 MWAD companies in the country at present specializing in programs used in mobile phone communications. The exact figure is hard to derive as some firms whose applications were disapproved by the carriers no longer exist or have re-focused their organizations. More important, the sector has no industry association to serve as a single voice of the developers in lobbying for their development and welfare.

The MWAD developers in the country are mostly small enterprises employing an estimated 200 workers in total. They are essentially dependent on the major mobile phone carriers in the country for business, which explains why 90% of them are based in Metro Manila where the carriers have their headquarters. MWAD firms develop applications often referred to as the carrier’s

Value Added Services (VAS). These range from games and novelties (ring tones and wall paper) to information and promotions. By far, applications pertaining to entertainment and marketing are the most common in the market.

The carriers provide the means by which applications are deployed and accessed by their subscribers. Income from the use of the applications is shared between the carrier and the developers under a profit-sharing agreement. If carrier traffic on the application is low, profit sharing is sometimes waived, depending on the agreement.

Demand for MWAD applications is significant due to the number of mobile phone users in the country and the primacy of short messaging service (SMS) as a means of mobile communication. There are about 26 million mobile phone subscribers in the country, and around 19 million are estimated to be using VAS of various kinds. There are no estimates on MWAD applications exported. Moreover, only a few firms have managed to penetrate the global market for VAS.

To compete in the market, MWAD developers must come up with a unique concept, develop it, and market the application to carriers or content aggregators. If their initial offering is disapproved, the MWAD builds on a new concept and goes through the same process of application development and marketing again. If the proposed application is approved, this is cued for release. The waiting time usually takes months.

At present, there are only two major carriers operating in the country, Globe and Smart. Sun Telecoms is the third carrier in the market but its operations are still small. This situation and the lack of any viable group representing MWAD developers have resulted in lopsided profit-sharing arrangements in favor of the carriers. On the average, the MWAD’s share of the profit is only 20% to 30%, with the rest going to the carriers. Gaming and media entities can negotiate for as much as 50% profit share.

In addition to their hold on the market, the carriers have recently established their own pool of VAS developers. This poses direct competition to independent MWAD firms and sometimes leads to accusations of unfair competition, especially when the disapproved concept of an external developer eventually surfaces in another form, albeit with a few insignificant changes, developed by the carrier.

Besides the hold of the carriers on the local VAS market, the MWAD sector has other concerns that should be addressed. As in the other IT sectors, the supply of skilled manpower is low due to a lack of formal training programs. Normally, the deployment of applications is usually carried out by the owner/developer, there
being no other adequately trained personnel. Most developers usually learn their skills by self-study and mentoring. Access to development kits is limited as most of these are sourced abroad.

There is also no uniformity in the methodologies used by developers as standards are not yet in place. MWAD firms are limited in their concepts due to lack of access to research materials that can expand their designs. They also lack testing facilities with which they can fine-tune their applications. There are no carefully planned marketing plans for the industry to be able to penetrate markets abroad.

The present situation in the MWAD industry is lamentable given the potential of the local market. This is one IT activity that local developers can excel in and over the long term expand to foreign markets.


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