The Market Monitor Minding the Nation's Business
By Riza Lozada
Revenues of Philippine Long Distance Co. (PLDT) Inc from its so-called legacy businesses, which comprise cellular domestic voice, SMS or text messages, and international and national long distance (ILD/NLD) calls, dropped by P2.5 billion for the first quarter. In contrast, broadband, corporate data and data center revenues rose by P2.5 billion or a 22 increase during the period from a year ago.
The digital shift had led to PLDT’s unaudited consolidated net income to drop P2.1 billion from a year ago to P7.2 billion. Reporting on the unaudited financial and operating results for the first three months, PLDT said consolidated revenues rose by one percent at P42.8 billion.
Consolidated service revenues were stable at P40.6 billion. The increase in data revenues negated the drop in legacy businesses, PLDT said.
“This revenue mix reflects the changing nature of PLDT as it shifts from legacy to digital.
Excluding revenues from international and national distance amounting to P4.4 billion, consolidated service revenues rose by 3 percent year-on-year to P36.2 billion,” PLDT reported. Consolidated capital expenditure for the first quarter amounted to P14.6 billion, more than four times the capital expenditure (capex) for the same period in 2015, PLDT said.
Capex in the first quarter was used to further increase the coverage, speed, capacity and reliability of PLDT’s fiber and its mobile unit Smart’s networks.
“Our higher capex in the first quarter of 2016 underscores the seriousness of our efforts to strengthen our fixed line and mobile networks as the first leg, indeed, the foun-dation of our digital pivot,” Manuel V. Pangilinan, chair-man and CEO of PLDT and Smart Communications, said.
“Excluding ILD and NLD, revenues from data, broadband and digital services comprised 38 percent of these revenues, up from 32 percent a year ago.
This shift has been led by the fixed line business, with 66 percent of its revenues now coming from data and digital services,” PLDT said.
The wireless business in-creased the share of data and digital services to 25 percent from 20 percent in 2015.
Mobile Internet revenues set the pace, surging 38 percent to P3.1 billion on the back of enhanced data service packages and video and other digital ser-vice offers,” PLDT reported to the bourse.
PLDT said capex was used in the first quarter to primarily continue expansion of 3G and 4G access networks, intergra-tion of Smart and Sun mobile networks to improve coverage and service quality, deploy-ment of fiber-to-the-home ser-vice and enhancement of DSL service, and to increase reach and capacity of the group’s fi-ber backbone network to sup-port both fixed and mobile networks.
“Our experience in the fixed line business shows how growth can be restored by progressively building up our data and broadband revenues to critical mass.
We aim to achieve that same critical mass in the wireless business by ac-celerating data adoption and usage, even at the price of re-newed deceleration of our leg-acy revenues,” Pangilinan said.