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By Darwin G. Amojelar, Reporter
THE country’s largest telecom company on
Tuesday announced that earnings last year eased, and warned that
profitability this year would suffer from a strong peso and the US
economic slowdown.
In a briefing, Napoleon Nazareno, president and
chief executive officer of Philippine Long Distance Telephone Co.
(PLDT), said the company’s net income inched up 2 percent to P36
billion last year from P35.1 billion in 2006. In 2005, the telco’s
earnings had grown 3 percent.
Its core profit, which excludes foreign exchange
gains or losses and other non-recurring income, reached P35.2
billion, 11 percent higher than the P31.6 billion in 2006.
PLDT, partly owned by Hong Kong’s First
Pacific Co. Ltd. and Japan’s NTT group, said consolidated service
revenues reached P135.5 billion, up by 8 percent year-on-year. This
was despite a 10-percent appreciation of the peso, which negatively
impacted 38 percent of the company’s dollar-linked revenues.
PLDT Chairman Manuel V. Pangilinan projected a
conservative core net income growth of 5 percent this year to P38
billion.
Pangilinan attributed the slower profit growth
to local political concerns and the US economic slowdown that could
pose a drag to Philippine expansion.
“We are quite concerned about the continuous
dollar [depreciation because] our revenue is dollar-linked and
domestically because of political concerns,” he said.
Wireless service revenues rose to P86.5 billion,
or 10 percent higher than the P78.4 billion realized in 2006,
largely due to subsidiaries, Smart Communications Inc. and Pilipino
Telephone Corp. (Piltel).
PLDT, which cornered about 57 percent of the
mobile phone service market, recorded 30 million subscribers last
year. Smart recorded net additions of about 3.2 million, while
Piltel’s Talk ‘N Text added about 2.7 million to end 2007 with
20.3 million and 9.7 million subscribers, respectively.
At end-February, the PLDT group’s cellular
subscriber base surpassed the 31-million mark as Smart and Piltel
added about one million new subscribers in the first two months of
the year.
“Smart’s continued strong subscriber growth
belies the belief that the Philippines’ high penetration rate is
indicative of slowing market demand. This strong growth is
manifested in our capital expenditure levels as we expanded both
capacity and coverage to accommodate our increasing subscriber base.
We are also gratified with the success of our segmented approach
that allows us to offer customized promotions to segments of our
subscriber base and address their specific needs, without diluting
our overall revenue base,” Nazareno said.
Pangilinan said the PLDT group will transform
itself to sustain its growth and extend its leadership in 2008 and
beyond.
“We will transform ourselves from an
integrated telco to a customer-centric, multimedia company
delivering communication, information, technology and entertainment
to its market,” he said.
The PLDT chairman said the main driver of growth
will be its broadband application on fixed (DSL) and wireless
platforms as the cellular phone business approaches maturity.
At end-2007, PLDT’s DSL, SmartBro and WeRoam
subscribers more than doubled to 579,000, adding about 315,000
subscribers for the year.
Pangilinan said the telco expects broadband
subscribers will grow by more than one million by the end of the
year.
ePLDT, the group’s information and
communications technology arm, reported service revenues of P10.1
billion last year, a 59-percent increase from P6.3 billion in 2006,
driven by the continued growth in the call center business under
ePLDT Ventus and the consolidation of SPi Global Solutions Corp.,
after its acquisition in July 2006.
Ray C. Espinosa, ePLDT president, said the
planned listing of SPi in the local bourse will push through this
year.
“It’s not off. It really depends on the
market condition,” he said.
Piltel income dips due to higher taxes,
depreciation
Meanwhile, Piltel reported a decline in its net
income by nearly a fifth last year owing to higher income taxes and
depreciation on the sale of its landline assets.
The country’s third largest mobile phone
service provider said in a statement that earnings dropped 17
percent to P8.3 billion from P10.08 billion in 2006.
Piltel attributed the lower earnings to the
higher provision for income tax and the additional depreciation of
P796 million relating to its fixed-line assets.
The company’s core net income however was up
28 percent to P8.8 billion last year.
Piltel’s revenues grew 21 percent to P15.31
billion, compared with P12.69 billion in 2006, as a result of the
continued growth in revenue contribution from the Talk ‘N Text
subscriber base.
The company’s data revenues increased by 25
percent to P8.68 billion last year from P6.97 billion in 2006. Voice
revenues were up as well by 28 percent to P5 billion from P3.9
billion in 2006, as a result of higher international long-distance
revenues.
“2007 proved to be an excellent year for
Piltel as it recorded significant gains across all operating
metrics. Our subscriber base surpassed the 10-million mark at the
end of January this year, an encouraging sign of continued growth
despite the high penetration rates,” Nazareno, who is also Piltel
president and chief executive officer, said.
“We continue to pursue measures to strengthen
our core business and increase retained earnings such that we can
declare dividend payments to common shareholders later this year.
Piltel has ceased to be a ‘turnaround’ story. We are now about
sustaining strength and growth,” he added.
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