PLDT earmarks P27 billion for expansion

MANILA—Telecommunication giant Philippine Long Distance Telephone Company (PLDT) is spending a total of P27 billion in expansion investments, including its plan to roll out “Fiber-To-The-Home” technology in the middle of this year, and its ultimate goal in providing broadband for all.

The company incurred P25.2 billion in capital expenditure in 2008. This year, despite the volatile economic conditions, PLDT is increasing its capex allocation by P3 billion more.

“The 2008 capex level reflects PLDTs continued investment in the business, an outlook sustained in our forecasted capex of P27 billion for 2009. We are looking beyond the near-term uncertainty and positioning for the long-term when global situation stabilizes,” said PLDT president and chief executive officer (CEO) Napoleon L. Nazareno during the company’s stockholders meeting held Tuesday at the Dusit Thani Hotel in Makati City.

According to Nazareno, PLDT’s broadband offering, remains the company’s growth driver, or “key area for growth.”

The introduction of “fiber-to-the-home” technology will provide Filipinos with much reliable and faster internet connection. Although this may cost a little higher compared to ordinary connection, it is considered as the “ultimate” in fixed line infrastructure.

He reported that Internet traffic has grown at least 80 percent year on year since 2006. Broadband subscriber based continued to grow robustly, and approached one million by year-end.

SmartBro, its wireless broadband offering, added some 245,000 subscribers in 2008, bringing DSL subscribers to nearly 547 thousand at the end of the year.

Total broadband and Internet service revenues grew 45 percent to P11 billion in 2008, which now represents eight percent of consolidated service revenues from six percent in 2007.

Nazareno reported to stockholders that consolidated revenues for the group increased by P7.4 billion, or five percent to P142 billion in 2008 compared to previous year (2007).

He said the growth is driven by a 12 percent growth in data and ICT revenues, and which now comprise 53 percent of total consolidated service revenues.

Core net income increased by eight percent to P38.1 billion, driven by a five percent increase in consolidated service revenues, a six percent increase in EBITDA coupled with a 14 percent decrease in financing cost.

On the other hand, the company’s reported consolidated net income for 2008 declined by four percent to P34.6 billion. The decrease Nazareno said was largely due to asset impairments (mainly in its ICT business) amounting to P2.5 billion.

“Though this is the first instance that reported consolidated net income declined since 2002, when PLDT adopted the Philippine Financial Reporting Standards (PFRS), our income from 2002 to 2008 has grown year-0n-year at a compound average growth rate of 32 percent,” Nazareno said adding that free cash flow remained strong in 2008 as it reached P47.9 billion, up by P1.3 billion. —Ehda M. Dagooc