PLDT bullish on prospects of local telco industry

MANILA, Philippines - Dominant carrier Phillippine Long Distance Telephone Co. (PLDT) is bullish about the prospects of the country’s telecommunication industry next year on the back of the stronger-than-expected economic growth.

PLDT president Napoleon L. Nazareno said the industry would benefit from the seven to 7.5 percent gross domestic product (GDP) growth in the first three quarters of the year.

“The market will grow next year because the economy is growing positively. Over the last three quarters, the GDP has grown roughly about seven to 7.5 percent. So I think the market will also grow,” he stressed.

According to him, the five percent expansion of the telco market in the first half of the year would likely be carried over to the second half of the year.

“The first half was a growth year for the entire industry and I think the second half will also be the same. So next year we are looking at another growth year for us,” Nazareno said.

The PLDT chief is confident that the industry growth this year would be sustained next year.

“The industry grew by about five percent in the first half and the GDP grew by about seven percent. We are looking at about the same phenomenon next year,” he said.

Data from the National Statistical Coordination Board (NSCB) showed that the country’s GDP grew 7.6 percent in the first half of the year from 6.4 percent in the same period last year. The GDP expanded by 7.5 percent in the second quarter of the year making it the fourth consecutive quarter that the GDP grew more than seven percent under the Aquino administration.

The growth in the first half was faster than the projected six percent to seven percent target set by the Development Budget Coordination Committee (DBCC). The body sees the GDP growing between 6.5 percent and 7.5 percent next year.

For the PLDT Group, Nazareno said the company is confident that it would be able to deliver promised core income this year. The company is sticking to its core net income target of P38.3 billion this year from P37.3 billion last year.

“We are sticking to our core income guidance this year of P38.3 billion. It should be in that neighborhood. I am confident that we will hit that,” he said.

PLDT’s core net income grew five percent to P19.4 billion in the first half of the year from P18.4 billion in the same period last year due to the P2 billion gain from the sale of preferred shares of Beacon Electric Asset Holdings Inc., P1.7 billion from its manpower reduction program as well as P900 million gain from the sale of shares in Philweb Corp.

This translated to a two percent increase in net income to P19.7 billion from P19.3 billion due to the P1-billion increase in core net income, the P2 billion gain from the sale of its business process outsourcing (BPO) arm SPI Global Holdings Inc. as well as the P1.8 billion gain from higher foreign exchange and derivative net losses.

On the other hand, the PLDT Group’s consolidated service revenues went up by two percent to P75.7 billion in the first half of the year from P74.2 billion in the same period last year as increases in revenues from the growing businesses outpaced declines in legacy revenues.

In terms of subscriber base, PLDT booked 73.4 million cellular phone subscribers consisting of 31.8 million for Talk n’ Text, 25.5 million for Smart Communications Inc., and 16.1 million for Sun Cellular of Digital Telecommunications of the Philippines Inc. (Digitel).