PLDT Q1 net income up 2% on data, internet businesses

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Giant telecommunications firm Philippine Long Distance Telephone Co. (PLDT) posted P9.4 billion in unaudited net income for the first quarter of 2014, up 2 percent from P9.2 billion a year earlier on the back of strong growth in its data and internet businesses.

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The company said consolidated core income amounted to P9.8 billion, up 2 percent from the P9.6 billion recorded in the same period last year, due mainly to higher service revenues and equity share in earnings of subsidiaries, and lower financing costs.

Consolidated service revenues for the first quarter improved by 3 percent from a year earlier to P41.2 billion, as the increase in revenue from the data and internet business exceeded declines from the international and national long distance streams.

Consolidated earnings before interest, taxes, depreciation and amortization (Ebitda) dipped by 2 percent year-on-year to P19.7 billion as an increase in service revenues was offset by higher cash operating expenses and a rise in subsidies.

“The structural shift in our revenue mix continues, wherein growing revenues from our data business replace those from our legacy business such as NLD (national long distance), and fixed and wireless international voice,” Manuel Pangilinan, chairman of PLDT, said on Tuesday.

“While this transition takes place, revenue growth and Ebitda margins will be tempered. In the first quarter of 2014, consolidated revenues grew 3 percent year-on-year on the back of a 22-percent rise in broadband and data revenues, muted by a 2-percent decline in legacy revenues and similar decline in LEC (local exchange carrier), cellular domestic voice and SMS (short messaging services) revenues,” he added.

Consolidated capital expenditure in the first quarter amounted to P2.2 billion, down from P3.1 billion in the same period last year. For 2014, capital expenditures are projected to be in the range of P31 billion to P32 billion, or about 18 percent to 20 percent of service revenues.

Ongoing network initiatives include expanding 3G and 4G/LTE coverage; increasing the group’s fiber footprint which now stands at nearly 85,000 kilometers; continued integration of Smart and Sun networks; and projects to enhance the group’s multimedia capabilities.

Subscriber base
PLDT Group’s subscriber base reached 76.2 million at the end of the first quarter. Wireless subsidiaries Smart Communications Inc. (Smart) and Digitel Mobile (DMPI), now Sun Cellular, together continue to lead the industry in terms of both revenues and subscribers, PLDT said.

It said wireless service revenue grew by 2 percent year-on-year to P28.9 billion in the first quarter, buoyed by the continued rise in both non-SMS data and cellular voice revenue.

Postpaid revenue, now accounting for 20 percent of total cellular revenue, registered a 17-percent increase to P5.1 billion in the first three months of 2014.

PLDT Group’s total cellular subscriber base at the end of March 2014 was 70.5 million subscribers, broken down as follows: Smart had 25.9 million subscribers under its mainstream Smart brands; value brand Talk ‘N Text ended with 29.5 million subscribers; and there were 15.1 million Sun Cellular subscribers.

The Group’s combined postpaid cellular subscriber base grew by 19 percent or about 394,000 from the first quarter of 2013 to 2.5 million at the end of March 2014, while the combined prepaid cellular subscriber base reached 68 million.

Total broadband, data and internet revenues for the first three months of 2014 rose by P1.5 billion or 24 percent year-on-year to P7.6 billion, and now account for 18 percent of total group service revenues, PLDT said.

Wireless broadband revenue, exclusive of mobile internet revenue, increased by 7 percent to P2.4 billion from P2.3 billion last year, while mobile internet revenue grew by 81 percent to P1.8 billion as the upward momentum in usage continued.

PLDT Group’s fixed broadband businesses registered revenue of P3.4 billion in the first quarter of 2014, higher by 18 percent from the same period in 2013.

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