Capwire’s international long distance business grows 52% in 2000

Riding the crest of a boom in the telecommunications sector, resurgent Capwire Telecommunications reported a 52-percent increase in its international long distance (ILD) business in fiscal year 2000.

The ILD business accounts for roughly 77 percent of Capwire Telecommunications’ total revenues.

Capwire Telecommunications executive vice president and chief operating officer Maureen V. Santiago said the robust performance of the ILD business compensated for the drop in accounting rates as a result of the stiff competition which saw ILD call rates falling by as much as $0.50 per minute. The drop in accounting rates resulted in much lower collection rates for ILD calls.

At the same time, Santiago said telecom gateway firms like Capwire were hit by the decline in settlement rates of inbound international calls.

"The substantial drop in settlement rates was experienced by all telecom firms. But as we foresaw this event, we developed and instituted changes in our business and marketing strategies that resulted in a substantial increase in ILD minutes. Right now, we’re tweaking our strategies even further," Santiago said.

Capwire has earlier forged a debt restructuring agreement with a consortium of creditor banks led by Land Bank of the Philippines. The agreement is expected to pave the way for the telecom firm’s expansion.

The restructuring agreement is acknowledged as the first ever by a Philippine telecom firm, many of which are saddled by huge debts as a result of the Asian financial crisis.

Analysts said Capwire’s debt restructuring agreement may open doors for expansion, most probably through joint ventures with leading foreign telecom firms.