Digitel steps up rivalry against Smart, Globe

To compete with Smart Communications Inc. and Globe Telecoms Inc., Gokongwei-led Digitel Mobile Philippines Inc. will spend $350 million this year. The money it allotted for capital expenditure (capex) will help expand and bring its coverage on a par with those of the country's two leading mobile telecommunications firms. It would include the construction of new cell sites to bolster Digitel’s network to meet its growing number of subscribers. About half of the budget was earmarked to grow the firm’s broadband business, which Digitel saw as the next battle ground for the country’s mobile telecommunications industry. “We’re spending $350 million, which is the same capex we had last year," Digitel president James L. Go said at the sidelines of the company’s stockholders meeting Monday. The company will source $150 million from internal funds, and borrow $200 million from export credit agencies. Digitel, which operates the Sun Cellular brand, had about 11 million subscribers at the end of 2009, Go said. The numbers had since advanced to 14 million at the end of April, with over 400,000 broadband Internet subscribers. “We are growing so much and technology is also growing fast. So, we have to grow our network rapidly to meet demand," Go said. Digitel's 14 million customers are supported by 6,000 Sun Cellular cell sites across the nation. Go said the company planned to bring its number of cell sites to 8,000, or roughly on a par with Smart and Globe's, to cover about 90 percent of all Philippine cities and municipalities. “By the end of next year, our sites will almost match our two other rivals. Beyond that, capex will no longer be as aggressive," Go said. Lower capital spending by 2012 should give Digitel healthier profit margins, he said. Sun Cellular is the country’s third largest mobile network. Ayala-led Globe has about 25 million subscribers, while Smart has over 43 million. —VS, GMANews.TV