Wednesday, August 06, 2008 PLDT confident phone business will still grow
TELECOMMUNICATIONS giant Philippine Long Distance Telephone Company (PLDT) remains bullish on the Philippines' economy even as the country's inflation rate for July was placed at 12.2 percent.
"We still think there's potential growth for our business despite the difficult environment, and this is the reason why we've increased our capex (capital expenditures) for this year," said Manuel Pangilinan, chairman of PLDT, during their first half financial and operating results news briefing Tuesday.
From the original P25.4 billion allocation this year, Pangilinan said they have increased these to P28.5 billion or an additional P3.1 billion to fund their network expansion and acquisition.
"We've confidence and that the business is good and prospects for this country remains good," Pangilinan said.
Napoleon Nazareno, president and chief executive officer of PLDT and Smart Communications, said of the P28.5 billion, about P18 billion or roughly 64 percent of the amount will be used to fund their wireless business expansion, between 30 to 32 percent for their fixed line business, and the remaining six percent will be for their ICT (information communication technology) projects.
"The increase (in capex) is attributable primarily to the wireless business where higher than expected wireless and broadband subscribers growth and accelerated investments in wireless broadband capacity will require a higher level of capital expenditure during the year," he explained.
Nazareno said for the first six months of 2008, the PLDT group's consolidated net income jumped 13 percent to P19.3 billion from the P17.1 billion recorded in 2007 during the same period.
He noted that the company's consolidated wireless service revenues rose to P45.8 billion for the first half of 2008, up by seven percent than the P43 billion realized in the same period last year.
Cellular subsidiaries, Smart Communications, Inc. (Smart) and Piltel have consistently maintained their respective solid performances.
Total cellular subscriber based for the first half of 2008 for both Smart and Talk 'N Text hit 33.2 million with Smart recorded net additions of approximately 412,000 subscribers and Talk 'N Text added about 2.78 million subscribers to end the period with 20.7 million and 12.5 million subscribers, respectively.
Nazareno attributed the increase in their subscribers to the various sachet products and bucket promos they have implemented to help cushion the impact of the rising cost of food, fuel and basic services.
According to him, at least 80 percent of their subscribers are now availing of their various promo packages.
"At least two thirds of Piltel (subsidiary of PLDT who operates the Talk 'N Text brand name) subscribers are now based on promo packages. 80 to 90 percent of cellular subscribers are now availing of the promo packages and this is due to the drop in the disposable income of the users," Panglinan said.
Asked whether they will continue the promo packages in response to earlier call of President Gloria Macapagal-Arroyo to provide affordable rates to mobile users, Nazareno said: "Yes. In months ahead, we will continue to offer sachet or bucket promos and the reason is to help the subscribers and second is in assistance of the government's view of making our services more affordable to cushion the impact of the inflation."
Pangilinan, on the other hand, said they foresee the third quarter to be "traditionally low" because of the school openings and the typhoon season.
However, Pangilinan is confident that in the fourth quarter, the business will bounce back since it is the Christmas season where people spend more.
"For the third quarter we're assuming it to be quiet difficult but in the fourth quarter, we hope to recover some that we've spent," he said.
Aside from the growth posted in the their cellular business, Nazareno reported that their broadband service in particular Smart Bro also increased by 35 percent for the first half of 2008 to reach 408,000 users as of end June while their DSL already recorded net additions of 70,000. Total broadband subscribers now reached 758,000 up by 31 percent than 2007 with 579,000.
For their 3G, Nazareno said it is also picking up with a total of 47,000 subscribers and about 1.4 million 3G handsets now out in the market.
The company's fixed line revenue also increased by four percent to P24.6 billion from the P23.7 billion it registered in 2007 during the first six months.
Retail DSL generated about P2.5 billion in revenues from January to June 2008 higher by 44 percent from the P1.8 billion in 2007. At the moment, DSL subscribers already reached 335,000. (MSN/Sunnex)
