TELCO giant Philippine Long Distance Telephone Co. (PLDT) is going to spend at least P39 billion this year as demand for fixed and mobile broadbrand continues to rise.
“In anticipation of the expected rise in data traffic as a result of greater smartphone ownership and our initiatives to stimulate usage, PLDT has raised its capex in order to boost network capacity, coverage and quality of service,” said PLDT president and chief executive officer Napoleon Nazareno, during the company’s annual stockholder’s meeting Tuesday.
PLDT earmarked P34.8 billion for capex last year, which is P6 billion higher than in 2013.
Data requirements
PLDT chairman Manuel Pangilinan noted the capital spending this year is the “highest ever” as they plan to address the “rising appetite for data services by large, medium, and small enterprises, enhanced data usage arising from more smartphones being adopted, and the growing appetite of users for video and other bandwidth-heavy services.”
The capex last year covered, among others, the expansion of 3G and 4G networks, the extension of the telco’s fiber footprint to 98,000 kilometers and the modernization of its fixed line network.
According to Pangilinan, the company aims to complete the 3G network rollout by November and erect some 2,000 to 3,000 cellsites for the 4G network roll-out by the year-end. He sees the 5G rollout, meanwhile, to happen by 2020.
Pangilinan noted PLDT is beefing up its efforts and is taking significant steps to ensure they are ready for the digital future.
He said the telco can no longer behave the way it did in the past, as behaviors of consumers have changed and the way to do business has become more advanced.
Future-ready
“Take for example the viewing habits of the millennials; it has changed and is far different from years ago. The digital requirement is increasing and you need to connect them within five seconds,” Pangilinan said.
“We will continue to proactively explore how we can make PLDT future-ready including leveraging content and multimedia, and expanding our presence in adjacencies to PLDT’s access business, particularly in the areas of e-commerce, mobile payments, financial services and big data,” said Nazareno.
In the area of e-commerce, Nazareno disclosed that in partnership with Rocket Internet, PLDT will bring Smart E-Money to emerging markets beyond the Philippines.
“We expect to launch this in four Asian countries within the year,” Nazareno said.
PLDT’s investment in Berlin-based Rocket Internet has increased in value, from 333 million euros in August 2014 to 434 million euros, based on Rocket’s closing share price last June 3.
PLDT also made a $15 million investment in iflix, which plans to be the Southeast Asia’s leading Internet TV service offering subscription video-on-demand that can be viewed on multiple screens.
Pangilinan said they will start offering this service starting this month.
Challenges
PLDT ended 2014 with a core net income of P37.4 billion in 2014, lower than P38.7 billion in 2013. Its service revenues amounted to P165.1 billion last year, down from P164.1 billion in 2013.
“We faced challenges on two fronts: price competition in the cellular business on one hand, and the impact of new digital communications services offered by over-the-top of OTT players on some of our traditional services on the other,” said Nazareno.
PLDT logged a combined subscriber base of 76.4 million at the of March 2015.