PLDT allots P30 B for capex this year

MANILA, Philippines - Dominant carrier Philippine Long Distance Telephone Co. (PLDT) is spending around P30 billion for its capital expenditures this year to sustain the gains of its P67.1 billion network expansion and modernization program.

PLDT chairman Manuel V. Pangilinan told reporters that this year’s budget would be lower than last year as the company’s capital expenditures begin to “normalize” after the completion of the two-year network expansion and modernization program. The PLDT Group spent P38 billion for its capital expenditures last year.

He said the telecom provider would announce details of its capital expenditures program early next month during the release of the company’s financial results.

 â€œWe will announce during the results, it will start to be lower this year because we are almost finished with the network build up and upgrade. It may be lower than the previous years,” he added.

He said the budget for capital expenditures this year would be used to expand the company’s fiber optic cable backbone nationwide as well as the coverage of its 4G (4th generation) long term evolution (LTE) service.

With the lower budget for capital expenditures, Pangilinan said the company’s cash flows would improve as well.

Last September, PLDT announced the completion of its P67.1 billion network upgrade and modernization program.

The upgrade brought the PLDT Group’s total fiber assets to 54,000 kilometers consisting of over 48,000 kilometers of fiber assets with an additional 6,000 kilometers of Fiber-to-the-Home further expanding its LTE sites.

Last December, Pangilinan said PLDT sees a better year this year due to lower capital expenditures, better synergy among the PLDT Group as well as higher revenues due to the upcoming May elections.

During lunch with the media, PLDT president Napoleon Nazareno said last December that the company’s budget for capital expenditures would normalize to between 17 percent and 18 percent of total revenues starting this year.

Nazareno said the higher expenditures took its toll on the company’s bottomline after spending over P67.1 billion over the past two years for network modernization and transformation.

PLDT’s profits slipped six percent to P28.7 billion in the first nine months of last year from P30.6 billion in the same period last year on the back of stiffer competition and manpower reduction.

On the other, consolidated service revenues of PLDT jumped 12 percent to P126.2 billion from P112.27 billion while total revenues surged 13 percent to P128.56 billion from P114.05 billion.

The decline in income in the first nine months of the year could be attributed to the consolidation of the operating performance of Digital Telecommunications Philippines Inc. (Digitel). It spent P69.2 billion to acquire the stake of Taipan John Gokongwei in Digitel.

For 2012, Pangilinan said PLDT likely achieved its profit guidance of P37 billion amid the tough and intense competition in the capital-intensive telecom industry.

 â€œWe continue our steady financial performance as we wait for the industry situation to stabilize. We hope to provide a better indication of when we can expect to return to the profit growth track when we announce our yearend results next March,” Pangilinan said earlier.