Free internet promo bites into PLDT profits

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The Philippine Long Distance Telephone Co. is feeling the bite of free internet promo on profits but but Napoleon Nazareno, president, remains upbeat that the positive trending in the fourth quarter may still enable it to meet profit goals.

Foregone profits from free internet service forced PLDT to reduce its profit guidance from P39.5 billion t P37 billion for this year.

“The trending is okay in the fourth quarter, most likely better than third quarter, it is usually the best quarter for us due to the festive season but with free internet, it might be tempered a bit” , Nazareno said.

PLDT Chairman Manuel Pangilinan said: “we expect competition to remain keen in the fourth quarter, and possibly beyond 2014 as well.”


“Our third quarter results reflect intensifying competition in the cellular space of our business, to which we have taken measures to respond to competition and stabilize our share of the market,” Pangilinan said.

PLDT said its third quarter net income declined 14 percent to P7.93 billion from P9.25 billion a year ago. This dragged the telco’s nine-month profit net to P28 billion, down 3 percent from P29 billion last year.

PLDT’s wireless service revenues declined to P85.8 billion for the nine-month period, from last year’s P86.4 billion, reflecting pressure on SMS and inbound international revenues.

Smart, Sun and Talk ‘N Text undertook to match or neutralize price aggression on the prepaid front, effectively lowering price points for the same level of activity. This overall “discounting” of the market, coupled with the continued decline in inbound international business, weakened service revenues, PLDT said.

Total broadband and Internet revenues for the first nine months grew 20 percent to P23.4 billion. Broadband and Internet now account for 19 percent of total revenues.

Wireless broadband revenues, exclusive of mobile Internet revenues, increased by 7 percent toP7.5 billion, compared with the P7 billion recorded last year.

Moreover, mobile Internet usage continues to grow strongly, with mobile Internet revenues increasing by 69 percent to P5.7 billion from P3.4 billion in 2013.

“Maintaining the updated guidance profit, the bottom line guidance. No capex [capital expenditures]yet. we’re still working on our budget”, Nazareno said.

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