ABS-CBN unit expects P900-M start-up losses from mobile biz

MANILA, Philippines - ABS-CBN Convergence Inc., a unit of multimedia giant ABS-CBN Corp., sees P900-million start up losses from its wireless telecommunications business.

ABS-CBN chief financial officer Aldrin Cerrado said in an interview with reporters that the losses of ABS-CBNmobile would come from marketing, merchandising, and other subscriber acquisition related costs.

 â€œWe are still looking at close to P900 million losses from our mobile business,” Cerrado said.

 â€œThese are all cash expenses related to marketing, advertising promos and obviously a little on the office expenses including employees costs,” he added.

He pointed out that the company is undertaking aggressive marketing and merchandising all over the country as it targets to lure one million subscribers this year.

According to him, the ABS-CBNmobile currently has close to 250,000 subscribers.

He disclosed that average activation of ABS-CBNmobile SIMs per day is currently at 2,500 compared to about 700 per day last year.

 â€œWe are targeting close to one million subscribers this year. Right now we are close to 250,000 subscribers, so I think we are going to exceed that,” he said.

The official said ABS-CBN Convergence is looking at breaking even at two million subscribers instead of four million subscribers.

ABS-CBNmobile’s network sharing agreement with Globe Telecom signed in May last year allows ABS-CBN Convergence to provide ABS-CBN content in addition to traditional telecommunication services on mobile devices.

Through the network-sharing agreement, Globe would provide capacity and coverage on its existing cellular mobile telephony network to ABS-CBN Convergence on a nationwide basis.

ABS-CBN Mobile’s pre-paid service was launched last Nov. 16 wherein the company gave away close to 100,000 SIM cards to victims of Super Typhoon Yolanda.

 â€œRight now it is still prepaid we are looking at rolling out to post paid subscribers I think in the third quarter of this year,” Cerrado said.

ABS-CBN Convergence earlier announced the Bayantel’s bayanPHONE Extra product of Bayan Telecommunications Inc. would be discontinued effective May 16.