PLDT expects recovery on ‘good’ first-half profit

PLDT, Inc. expects its first half income to be better than its last year’s performance, buoyed by gains mostly from its fixed line business.

“First half [income], it’s good. Better than last year... [we’re seeing] particularly recovery ahead.” [ It’s] showing double- digit growth,” PLDT Chairman and CEO Manuel V. Pangilinan told reporters in a recent interview when asked about the telco’s performance so far in the six months of 2017.

In the first half of 2016, PLDT saw its profit fell 33% to P12.46 billion from the P18.72 billion as the nation’s largest phone carrier booked charges for its investment in Germany-based Rocket Internet SE.

For the second quarter of last year alone, its net income reached P6.24 billion, down from P9.34 billion booked during the same period in the preceding year.

PLDT earlier pinned its hopes on growth in its fixed line business as well as cost-cutting measures to temper expenses and grow its income as the traditional voice and text services continue to be under pressure.

PLDT Chief Revenue Officer and ePLDT President and CEO Eric R. Alberto said for the second quarter, the network would see a similar boost from its PLDT Home and Enterprise business as in the first quarter when the units posted doubledigit growth.

“Q2 growth drivers? Well, Home and Enterprise obviously and the green shoot in mobile, inch by inch we’re stabilizing. We’re seeing encouraging signs of stability and hopefully that will allow us to find a new base by which through to develop a breakout point in growth. It’s [in terms of ] revenues para di na negative,” Mr. Alberto said in a separate interview.

PLDT’s Enterprise segments — PLDT ALPHA and PLDT SME Nation — cater to large and small andmedium businesses, while the Home digital services unit caters to the broadband market.”

“It’s no longer so much of subscriber count because the market is oversaturated. It’s more like how we proposition to the market relevant consumer services beyond access,” he added, noting how PLDT is looking to focus on its broadband business, as well as dominating the mobile Internet space.

Mr. Alberto said PLDT Enterprise in particular is maintaining its momentum of “double- digit growth.”

“[ Revenue target for enterprise], it’s hard to tell, but certainly way way higher. I think we did about P2.7 billion last year — P2.7-P2.8-billion top line increment and these are the three major drivers of our growth in PLDT group — Home — [we’re looking at initiatives] to fortify our leadership in the Home space. Then the other one really growing nicely is Enterprise and the [ wireless space] we’re looking at that very challenged business and we’re putting all efforts to stabilize the erosion that has happened in the business... and the severe price competition that we experience over the last two years,”he added.

PLDT earlier announced its Enterprise and Home business was seen continuing its upward trajectory to deliver around P68 billion in combined revenue for 2017.

It has heavily invested in expanding coverage of its fixed and wireless network which now spans at least 150,000 kilometers of fiber optic cables running nationwide.

Amid its digital pivot, PLDT also budgeted P46 billion in capital expenditure this year for its ongoing comprehensive network modernization and expansion program, which will see an increase in fixed line spending. It is planning to deploy technology to achieve fiber-like speeds over copper, and to service 4.4 million homes with fiber by end 2017.

In order to assert its superiority in long-term evolution (LTE) and achieve 70% population coverage in LTE service, PLDT plan to roll out 2,165 sites with LTE in low spectrum bands and 3,568 sites with LTE in high spectrum bands this year.

As of the first quarter, PLDT reported that its combined Home and Enterprise units now make up 46% of consolidated service revenues, compared to the Wireless Consumer business’s 41%. Home service revenues, net of interconnection cost, grew 12% to P7.8 billion, while Enterprise service revenues rose 13% to P8.5 billion.

PLDT unveiled a three-year recovery plan in the first quarter of 2016 to transform itself into a primarily digital business from a heavily legacy one with Mr. Pangilinan earlier saying that “going digital is the difficult but only viable path to grow.”

Unaudited financial and operating results in the January to March period showed PLDT’s consolidated net income drop by a fifth to P4.969 billion from P6.233 billion a year ago, with profit that went to its equity holders similarly falling by a fifth to P4.951 billion.

Consolidated service revenues were at P37.701 billion, 7% less than a year ago but just 2% lower in the fourth quarter of 2016.

Mr. Pangilinan earlier this year said “the picture seems to be brighter” for PLDT this 2017 as the telco giant is targeting an increase in recurring core income to P21.5 billion this year.

Hastings Holdings, a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls.