THE Philippine Long Distance Telephone Co. (PLDT) on Tuesday cut its 2014 profit guidance following a double-digit drop in third quarter earnings.
PLDT Chairman Manuel Pangilinan said the firm lowered its full-year profit guidance to P37 billion from the original guidance of P39.5 billion because “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.