Mobile service is PLDT’s 2nd biggest earner

Mobile phone revenues have overtaken revenues from international long distance (ILD) services as the second largest source of income for the Philippine Long Distance Telephone Co. (PLDT), it was learned yesterday.

Fixed lines still account for the bulk of revenues, but revenues from mobile lines are fast catching up.

PLDT president and chief executive officer Manuel V. Pangilinan said that while ILD accounted for 27.9 percent of revenues in 1999, next only to fixed lines which had a 29.3 percent share and mobile at 19 percent, the revenue mixed has changed in 2000 with fixed lines accounting for 30.4 percent of revenues, followed by mobile with 25.2 percent, and ILD with 20.3 percent.

In 1999, national long distance calls accounted for 18.5 percent of total PLDT revenues, but the share dropped to 16.8 percent last year. Revenue from data services increased from 4.1 percent to 5.2 percent.

Consolidated revenues last year amounted to P62.9 billion, a 13 percent increase compared to P55.7 billion earned in 1999. Net income, however, declined 64 percent, or from P3.09 billion to P1.1 billion.

Pangilinan recalled that in 1995, PLDT’s revenues came mostly from international calls, accounting for 59.4 percent. Mobile accounted for a sizeable share of 24.8 percent and national, 14 percent.

He said that last year was a significant year for the telecommunications sector as overall penetration exceeded 10 percent.

He explained that a key catalyst in this development was the phenomenal growth of wireless, which overtook fixed line penetration early last year. The penetration rate of fixed line grew from four percent in 1999 to 4.1 percent in 2000, but that of wireless increased 133 percent from 3.6 to 8.5 percent.

PLDT subsidiaries, Smart Communications and Pilipino Telephone Corp., finished 2000 with a 50.3 percent share of the digital GSM cellular market compared with only 15 percent in 1999.

Pangilinan also revealed that the ratio of text to voice usage for prepaid subscribers is now 10 to one. In fact, text revenues amount to P17 million a day or 40 percent of total GSM prepaid revenues.

Text messages for PLDT wireless (Smart and Piltel) grew from 46 million messages a day for the month of January to 735 million messages for December 2000, or a 15-fold increase.

Meanwhile, Pangilinan projected a steady growth for PLDT’s fixed line business, characterized by changing revenue mix, strong cash generation and profitability. The fixed line group includes PLDT, Piltel, Clark Telecom, and Subic Telecom.

For the wireless business which includes Smart, Piltel, Mabuhay Phils. Satellite Corp., Telesat Inc. and Aces Philippine Cellular Corp., Pangilinan expects capital requirements to remain heavy. "But with a rapid revenue growth and improving margins, we expect the business to be cash generative in the medium term," he said.

In the case of subsidiary ePLDT which includes PLDT’s Internet Data Center (Vitro), Call Center (Contact World), Cable TV (Home Cable), applications, video Internet, and content (GMA Network and NBC), as well as the Internet company Infocom, the PLDT chief executive projects that the Internet-related businesses will be cash generative in the medium to long term.

The acquisition of GMA is still subject to due diligence and possibly, congressional approval, while Home Cable will be transferred to ePLDT when the new cable bill is passed into law.

These companies, with the exception of GMA 7 which has been in the business for 50 years, are mainly start-ups with potentially rapid revenue growth, he said.