Online videoplatforms in the Philippines have increasingly turned to telco partnershipsin order to expand their reach, particularly as slow internet speeds and piracycontinue to pose a challenge for OTT platforms looking to conquer the Filipino market.

The latest OTTplayer to launch in the country is Malaysia-based AstroMalaysia Holdings Bhd. It recently teamed up with telco giant in order to roll outAstro's OTT platform Tribein the Philippines, which offers live and on-demand content, ranging from Koreanseries to live sports broadcasts.

Meanwhile, rivaltelco PLDT Inc. has invested$15 million in another Malaysia-based OTT player, iflix, converting that investmentearlier this year into a 7.5% stake in the OTT platform.

According toVivek Roy, an Asia-Pacific research analyst at Ovum, the telcos' reasoning behindthese OTT strategies is to offer access to VOD platforms as part of a larger broadbandbundle,

PLDT bundlesiflix for free with all its DSL and fiber multiplay plans, while Globe allows accessvia Alphabet Inc.'s Chromecast device whichis offered free with its platinum broadband plans, Roy said.

As the Filipinomobile and fixed broadband markets matures, a healthy appetite for video contentrises, particularly exclusive content.

"[Exclusivecontent] increases customer stickiness. To this end, we expect telcos and OTT players'partnerships to grow," Roy noted.

At present,the Filipino OTT landscape is dominated by Skyplc-backediflix and HOOQ, a joint venture between Singtel,Sony Corp.'s Sony PicturesTelevision and Time Warner Inc.'sWarner Bros.

Then there isSolar Entertainment's Blink, being the only Philippine-based OTT aggregator so far.Blink has partnered with PLDT's mobile operators Smart Communications and Sun Cellular,as well as SM Prime Holdings, which owns and operates over 50 malls in the country.

Added to thatis Netflix Inc., whichlaunched earlier thisyear in 130 new countries, including the Philippines.

However, sofar the global OTT giant has failed to make a huge impression. In fact, Netflix'sPhilippine rivals seem outright undaunted.

The companymay have a global footprint, yet Jeffrey Remigio, HOOQ Philippines content and programminghead, pointed out that Netflix's content proposition is limited as it launched inthe Philippines with only 10% to 15% of its U.S. video catalog.

Industry observerand Manila-based GMA News technology editor Timothy James Dimacali also noted Netflix'scontent offering is not mind-blowing.

"I havelooked at Netflix, [and] it is more top-of-mind due to pop culture, but the contentis currently limited," he said in an interview.

Netflix hasaddressed the content concerns, as the company's chief communications officer, JonathanFriedland, has acknowledged that it could take some time before the company hasfully familiarized itself with the Filipino OTT market, hinting at potential partnershipswith local independent filmmakers in order to localize the content offering.

Netflix maybe under pressure to act swiftly, as its rivals in the Philippines are stackingup on local content.

HOOQ has partneredwith TV networks ABS-CBN and GMA Network Inc., as well as film studios Regal Entertainmentand Viva Communications. Iflix has secured a content deal with ABS-CBN, which allowsit to offer popular TV shows such as "Lobo," "Ina Kapatid Anak,"and "Walang Hanggan," as well as films "One More Chance," "AVery Special Love," "The Mistress" and "On The Job."

The telco partnershipsare a welcome alternative for many OTT players, as monetization of their platformscontinues to pose a challenge in the Philippines, despite an uptake in mobile videocontent consumption.

SNL Kagan researchassociate Abigail Cruz explains that Filipinos' mindset towards paid content mayundermine a quick rollout of OTT services.

"Onlineconsumption of content may not be as appealing to Filipinos as in other countries,particularly in more mature OTT markets, [since most consumers] are not used topaying for content," Cruz said.

She furtheridentified slow internet speeds and rampant piracy as major challenges for OTT providers.

"Fixinginternet speeds will help encourage more people to stream online and hopefully lessenillegal downloading," Cruz added.

However, accordingto a 2015 study by internet metrics provider Ookla, the Philippines ranked 21stout of 22 Asian countries in terms of internet download speed, averaging only 3.64Mbps. The global average broadband download speed is 23.3 Mbps.

Therefore, manyFilipino viewers still see VOD platforms merely as a complementary viewing toolrather than an outright replacement to traditional TV. In Nielsen [Holdings PLC]'s most recent Global VOD Survey, traditionalTV still remains king among Filipinos, with 59% of the sampled population stillsubscribed to cable TV, while only 16% pay to stream content online.

"We need stable and fast internet servicebefore VOD can stand on its own," Dimacali said, adding that partnerships with telcos may be moreeffective if telcos improved their services.