TELECOMMUNICATIONS giant Philippine Long Distance Telephone Company (PLDT) on Monday said its core net income dropped 6 percent in 2015 from a year earlier, pressured by costs related to its restructuring from a legacy to a fully digital network.
The telco said it closed 2015 with a consolidated core net income of P35.2 billion, down 6 percent or P2.2 billion lower than the P37.4 billion recorded in 2014.
“The consolidated core net income is down because of a mix of factors.” PLDT’s chairman Manuel V. Pangilinan said during PLDT’s full-year financial briefing at the Meralco Compound in Pasig, during which the telco reported its audited financial and operating results for 2015.
PLDT, which is switching from its existing legacy network to a fully digital network, said it has seen more cost than revenue. It also admitted losing market share in the prepaid business to rival Globe Telecom.
“We really have to reset the dials of the company from legacy to digital. There has to be a cleanup,” Pangilinan said. With the cleanup getting done, Pangilinan said that PLDT is in for a challenging next three years.
He said PLDT has to take its foot off the financial pedal for a while in order to turn around to face the digital challenges. It has to take that digital initiative and that will not be without some pain, Pangilinan said.
The telco is setting a core net income guidance of P28 billion for 2016.
“The next two to three years will be challenging for PLDT but the goal is still with a baseline of P28 billion, to raise the profitability level after 2016,” Pangilinan said.
PLDT also reported that it had lost a large chunk of its prepaid market share to its direct competitor this year.
“We have lost about 5 million subscribers to Globe,” Pangilinan said, adding that the company will need to work hard to regain the market share it lost.