BayanTel seen sustaining income growth on data, Internet services

Lopez-owned Bayan Telecommunications (BayanTel) expects to sustain its profits growth this year complete turnaround in 2006 after years of lingering in the red.

BayanTel chief executive consultant Tunde Fafunwa likewise revealed that the company has allocated around P1.5 billion for its capital expenditures this year, bulk of which will be used for expansion of revenue-generating services.

Around P85 million will be spent this year for the expansion of its national digital transmission network (NDTN), which Fafunwa said will improve BayanTel’s capacities to fulfill the demand of its clients and ensure protection of its network to support its various products and services such as SPAN, or the wireless local loop, and DSL (digital subscriber line).

He noted that in previous years, bulk was used for the improvement of the existing network and the expansion of services such as DSL and IP (Internet Protocol).

"But going forward, having improved our basic network, our capex will be utilized to expand revenue-generating capacities," he said.

Fafunwa emphasized that 2007 will be a transition year for BayanTel, during which it will be making investments to generate significant revenue for the future. "A lot of the benefits will not be realized until the latter portion of this year, he said.

BayanTel expects to end 2006 with a gain, compared to a loss during 2005. He said the growth in net income will likely be triple digit in 2006 compared to 2005, since the latter was a loss, while revenue growth will be single digit.

The company is devoting bulk of its capex this year and the coming years for its SPAN or wireless local loop project, which it is piloting in Marikina, Manila, Pasay, Caloocan, Mandaluyong, Legaspi, Naga, Tacloban, Butuan and Davao. He revealed that Quezon City, Pasig and Makati are already in the pipeline.

Fafunwa likewise revealed that the number of DSL subscribers as of end-2006 reached 30,000 or double that of the previous year. He expects the subscriber numbers to likewise double this year.

He also noted that the business process outsourcing (BPO) sector now accounts for a significant portion of corporate business growth for the company. Before, finance and banking accounted for the largest segment.

BayanTel during the first three quarters of 2006 posted net revenues of P4.22 billion, a seven percent increase from the P3.95 billion generated during the same period the previous year.