Piltel seeks permit for nationwide data network

Philippine Long Distance Telephone Co.’s wireless subsidiary Pilipino Telephone Inc. (Piltel) has sought from the National Telecommunications Commission (NTC) a certificate of public convenience and necessity (CPCN) as well as provisional authority to construct, install, operate, and maintain a nationwide data communications network and to provide data.

Over a five-year period, Piltel projects to spend around P7.6 billion for the data communications  network that aims to deliver higher quality voice and multimedia content.

Despite the expected huge capital outlay, Piltel officials emphasized that the company should be able to sustain a dividend payout notwithstanding having to spend for any capital expenditure for any rollout.

Based on its five-year financial feasibility study submitted to the NTC, Piltel expects to spend around P3.4 billion on the first year, P1.3 billion for the second year, P870 million for the third year, P1.01 billion for the fourth year, and P1 billion for the fifth year of the program.

A huge part of the capital expenditure budget is expected to be allocated for the purchase of customer premises equipment amounting to P2.9 billion. Another P1.44 billion is projected to be spent for a base transceiver station and P1.6 billion for a mobile service switching center. Meanwhile, Piltel is allocating P1.6 billion for installation and transmission costs.

Piltel expects to increase its subscriber base yearly by 800,000. The company is the country’s  third largest cellular operator. Talk ‘N Text recorded approximately 1.5 million net subscriber additions in the second quarter of 2008 to end the period with 12.5 million subscribers.

Net activations for the first half of 2008 reached 2.78 million compared with 985,000 for the same period in 2007.

Earlier, the company reported a 46 percent increase in its first half 2008 reported net income to P5.2 billion from P3.56 billion in the same period last year.

Piltel has also declared an interim cash dividend of 43 centavos per share to common shareholders of record as of Aug. 15, 2008, the company’s first ever cash dividend. Payment date is set for Sept. 12 this year.

The interim dividend represents approximately 100 percent of first half 2008 core earnings.

Core net income before exceptionals during the January to June 2008 period was at P5.14 billion, up 15 percent from the P4.49 billion earned in the same period last year.

Earnings before interest, taxes, depreciation and amortization (EBITDA) was higher by 22 percent at P7.5 billion from P6.16 billion in 2007

Piltel chairman Manuel Pangilinan said the interim dividends should translate into a healthy return after the declaration of the final dividend early next year.

“It should be noted that this dividend payout will not just benefit Piltel’s minority shareholders but PLDT’s as well, as the dividends flow through Smart Communications and on to PLDT,” Pangilinan added.