The Philippine Long Distance Telephone Co. (PLDT) is giving top priority to unit Smart Communication Inc. in the group’s capital expenditure allocations for this year.
The telecom group said in a disclosure on Friday to the Philippine Stocks Exchange on Friday that it currently estimates its consolidated capital expenditures in 2014 at approximately P32 billion, of which about P17 billion is estimated to be spent by Smart.
PLDT itself anticipates needing about P12 billion, while Digitel Mobile Philippines Inc. (DMPI), acquired by PLDT from tycoon John Gokongwei, will get about P1 billion for this year’s capex. The balance will go to PLDT’s other subsidiaries.
Smart’s capital spending for this year is expected to focus on expanding its coverage, leveraging the capabilities of its newly-modernized network, expanding its transmission network, increasing international bandwidth capacity and expanding its 3G and wireless broadband networks so as to enhance its data transmission capabilities.
It is also considering enhancing its network and platforms infrastructure and systems to support solutions deployment, campaign analytics and service delivery to enable customized and targeted services.
“Through Smart and DMPI, we operate a digital GSM network. To meet the growing demand for cellular services, Smart and DMPI have implemented an extensive deployment program for its GSM network covering substantially all of Metropolitan Manila and most of the other population centers in the Philippines,” the company said.
Consolidating base stations
As of last December, Smart and DMPI, known as Sun Cellular, had 64 mobile switching centers, 81 text messaging service centers and 20,770 cellular/mobile broadband base stations in operation after consolidating Smart’s 14,074 base stations to its nationwide cellular network.
Smart has been co-locating its cell sites, where its base stations are installed. In addition, 30 of Smart’s mobile switching centers were housed in PLDT’s fixed line complexes as of the end of December last year. These operational synergies have allowed Smart to reduce switch installation time from three months to five weeks.
Due to its access to PLDT’s network facilities, Smart has achieved significant capital expenditure savings, which capital expenditures are understood to be significantly less, on a per net addition basis, than its current competitors. This translates into an improved ability to price competitively and target the mass market subscriber base in the Philippines, while retaining profitability.
Smart has been continuously extending its 3G footprint. The 3G network revolutionizes mobile technology by providing more capacity, faster data rates and richer data and video applications from a 2G network. Smart has also been deploying its HSPA+ network in urban areas where there is a demand for mobile broadband applications and where HSPA+ mobile units are more likely to be available.
Smart launched its fourth generation (4G) or Long Term Evolution (LTE) network in August 2012.
To date, Smart has established its LTE network coverage with 1,172 LTE base stations in strategic locations in the Philippines.
It plans to deploy in select high-traffic areas in the country’s capital and strategic locations to benefit more members of the Philippine population.