ECPI corporate information officer Hazel Custodio told the Philippine Stock Exchange that the company’s board of directors has approved management’s recommendation to write down the remaining net book value of the paging transmission assets "to properly reflect the future non-recoverability of these assets."
"The company has recognized the fact that the huge investments made in 16 paging networks with a capacity of more than 300,000 subscribers cannot be fully recovered with the substantial decline in subscriber base," she said.
ECPI enjoyed brisk business starting in the early 1990s as it elevated paging into a popular mode of relaying communications by introducing faster access, customer-friendly service, compact pager units, and affordable rates.
However, the emergence of the short messaging system (SMS) or text messaging introduced as a value-added service by the mobile phone companies in the late 1990s resulted in a major migration of paging subscribers to cellphones, bringing down not only ECPI’s business with it but the entire paging industry as well.
"While the paging business continues to generate positive cash flow, this is not sufficient to cover the substantial depreciation charges," Custodio said.
The ECPI official added that the country’s board has also approved the sale of certain idle assets to generate funds to support the cash flow requirements for its planned transformation into the information technology field as an Internet data center and contact center outsourcing provider.
She added that with this new thrust, the company will accelerate the depreciation of the investment in the Internet infrastructure from three years to 15 months to reflect the speed of change in technology which renders current technology acquisition obsolete in a shorter span of time.
"This will allow the company to migrate into the new technology without the burden of carrying forward the cost of the old technology purchased," Custodio said. – Conrado Diaz Jr.