PLDT to invest P67B in broadband facilities

Listed Philippine Long Distance Telephone Co. (PLDT) plans to spend P67 billion in the next two years to ramp up expansion of its broadband network, anticipating wider Internet usage in the country. At a briefing Tuesday in Makati, the country’s largest company said it also expects profits todrop this year and next as competition from rival telecom firms heats up and drags margins down. “We project to return to our growth path in profitability starting 2013 onwards," PLDT chairman Manuel Pangilinan said in a statement. The company announced its net income climbed a modest 1 percent in 2010 to P40.2 billion. Stripped of investment and foreign exchange gains and losses, the company’s core profits climbed 2 percent to P42 billion. Earnings before income tax, depreciation and amortization or EBITDA declined 3 percent to P83.7 billion, or a margin of 59 percent. The company ended 2010 with a subscriber base of 45.6 million, up by 4.3 million from the same item in 2009. Its profit growth was fueled by a 16-percent increase in combined fixed and wireless broadband and Internet revenues. The company also posted a 9-percent growth in cellular voice revenues. This helped offset a 12-percent drop in cellular text revenues — the company'’s bread and butter. Share in subsidiaries' earnings helped Also contributing to its profits were its share in the earnings of subsidiaries Manila Electric Co. (Meralco) and outsourcing firm SPi Global Holdings Inc. Consolidated revenues reached P142.2 billion, a 2-percent drop year-on-year. “At about this time last year, we had indicated that 2010 to 2012 would be a critical period in the PLDT group’s transformation," Pangilinan said. “The operating environment was becoming increasingly competitive and market share sensitive," he added. “Consequently, we expect our core net income to be in the region of P40.5 billion [in] each of the years 2011 and 2012 due to incremental depreciation and interest expense," Pangilinan said. Despite the lower profits, the company said it would spend at least P30 billion a year for the next two years to expand its business. At least P30 billion in each of the two years, higher than last year’s capital expenditure (capex) of P28.8 billion. The company’s capex focused on supporting its nationwide broadband services, PLDT president and CEO Napoleon Nazareno said. “The acceleration [in spending] will take into account both commercial and technical objectives such as a seamless nationwide 2G service and an expanded [broadband] rollout to support mobile Internet and broadband growth," a company statement read. Meanwhile, the company announced a dividend payout or P78 per share, on top of its interim cash payout of P156 per share last year. This was the fourth consecutive year the company declared cash dividends equivalent to 100 percent of its core profits. — TJD/VS, GMA News