PLDT eyes reg'l presence with purchase of foreign TV firms

MANILA, Philippines - The Philippine Long Distance Telephone Co. (PLDT) Group wants to take its media and multi-media service business regional, as it eyes the acquisition of foreign television companies.

The STAR learned that PLDT parent, Hong Kong-based First Pacific Co., is eyeing a TV network in Vietnam.

Also as part of plans to have a regional presence in the broadcasting field, PLDT chairman and First Pacific chief executive Manuel V. Pangilinan revealed that he is in talks with Anthoni Salim, chairman ang controlling shareholder of First Pacific, to acquire Salim’s Indonesia-based TV station.

“We are still in talks,” he said.

Pangilinan said in an interview that going regional will give the group a broader platform for its content.

“You also have to consider that last year, advertising revenues in the Philippines totalled only P35 billion, which many entities had to divide among themselves. The market is too small,” he pointed out

Going regional, he emphasized, will allow the PLDT Group to justify its investments in media, especially television.

There are reports that Pangilinan has offered between P40 to P45 billion to acquire 100 percent of rival broad casting firm GMA Network.

Pangilinan said yesterday that there are no ongoing talks between their group and the controlling shareholder of GMA, namely the Jimenez, Duavit and Gozon families, although he would neither deny nor confirm that his group has indeed made an offer.

Pangilinan’s group, through PLDT Beneficial Trust Fund subsidiary Mediaquest, owns broadcasting company TV5.

GMA’s 2011 profit fell nearly 40 percent year-on-year largely due to cuts in ad spending by big clients and the absence of political advertisements. The network said revenue also fell 8.5 percent to P13.083 billion.

“Notwithstanding the absence of P2.054 billion worth of revenue from political advertisements generated in 2010, and the global impact of the financial crisis in Europe and slow economic recovery in the US last year, the company delivered a fairly competitive business performance,” it said.

Profits dropped 39 percent to P1.715 billion from P2.8 billion in 2010.

Despite the drop in earnings, GMA said it had recorded the biggest market share in advertising revenue among the country’s top media firms.

GMA said its flagship Channel 7 network raised its ad loading minutes by 2.1 percent even with an increase in advertising rates that took effect in February.

Rival ABS-CBN Corp., meanwhile, appeared to be the hardest hit by the ad spend cutback among local broadcasting companies with a 7.1-percent drop in ad loading minutes during the comparable period, GMA Network said, citing its own monitoring.

GMA Channel 7, the company’s top performing unit, posted an eight percent revenue growth from regular advertising compared to 2010.

GMA Radio delivered a 15-percent revenue growth from regular advertising. GMA Regional TV reported a 21 percent hike year-on-year in recurring ad placements.

“This year will be far better than the previous year. There is a clear indication that traditional trade revenues for 2012 will go up,” GMA president and COO Gilberto Duavit said.

He revealed that the first quarter 2012 numbers are not yet final, “but we note that there has been a significant increase in March this year than a year earlier. We estimate a single digit growth.”

Duavit noted that GMA News TV is gaining “traction” with advertisers, but estimated that the channel incurred between P450 million to P500 million in net loss last year.

“The good part of viability is still contingent at this point. One of the benefits of having a news channel is that it is encouraging and gaining traction on advertising arrangement, which is an improvement from last year. The News TV also derived a new program that landed the network’s third international TV offering,” he said.

Advertising from political aspirants in the 2013 midterm polls are expected to pick up. “Political advocacies will be out this year. Originally, we have anticipated political advocacies to start towards the fourth quarter, but... Well, indications are it can be earlier. The sales in the news channel have improved. Well, we are not necessarily saying that we will have a break even but we are far closer this year than last year,” he said.

For his part, GMA executive vice president and CFO Felipe Yalong said they are confident of reaching P2.8 in billion net income target for this year, unless other scenarios like the US and Europe slowdown will impact the Philippines.

“[Our advertisers are usually] multinational companies that follow global-wide mandate,” he pointed out.

Meanwhile, GMA International ended 2011 with a six percent growth in revenues in US dollar terms, but the growth rate slowed down to four percent in peso terms due to the appreciation of the peso against the US currency. Total revenues from subscription, licensing and advertising revenues made through overseas operations reached P965 million.

GMA International runs the network’s flagship international channel GMA Pinoy TV (GPTV) and the Filipino lifestyle channel GMA Life TV (GLTV) with estimated global viewer counts of two million and one million, respectively.

Both channels can be accessed through a number of channel carriers in Filipino viewer-rich territories abroad such as the US, Canada, Middle East, Africa, Japan, Guam, Saipan, Hong Kong, Singapore, Papua New Guinea, Australia, New Zealand, Malaysia, Diego Garcia, Europe and the Carribean.

In the domestic market, GMA said it continues its aggressive expansion efforts with the rise of capital-intensive originating stations in Ilocos and Bicol, which will be operational by the third quarter of this year.