PLDT eyes outsourcing deal with Huawei, Amdocs

PLDT, Inc. is currently in talks to outsource its information technology (IT) services to Amdocs and Huawei Technologies Co. Ltd., after talks with IBM Philippines fell through.

“The IBM discussion has been stopped, so now we’re focusing on Amdocs and Huawei, for a major part of our IT processes,” PLDT Chairman and CEO Manuel V. Pangilinan told reporters on the sidelines of the ASEAN Business and Investment Summit.

The scale of outsourcing, however, will be “much smaller” than the original plan, Mr. Pangilinan said. He declined to give an estimate on the number of jobs to be outsourced.

He said the target is to reach an agreement by yearend, with “some contracts” with Huawei already having been signed.

PLDT was in talks earlier this year with IBM Philippines to outsource the bulk of its back-office operations, in a bid to slash costs as part of its turnaround strategy. Mr. Pangilinan previously said the company can realize savings of as much as P7 billion over the next few years by outsourcing some of its IT operations.

The PLDT Group has also been implementing other costcutting measures including reduction in travel to attendance to seminars, especially abroad, and reduction in other entertainment activities.

For the nine months ending Sept. 30, PLDT had a recurring core income of P17.36 billion, up 5% from the P16.55 billion last year. The company revised its recurring core profit guidance to P22 billion from the original P21.5 billion.

“It will be a better year next year. If it will be a significantly better year, I doubt it. PLDT will continue to show signs of recovery,” Mr. Pangilinan earlier said.

PLDT is looking to trim costs given the massive investments needed in upgrading network infrastructure to meet the increasing demand for data connections and Internet with higher speeds.

For this year, PLDT has a capital expenditure of P38 billion, with an additional P15- billion spending for projects due to be finished in 2018.

It has invested around P300 billion or nearly $6 billion in the last 10 years for its fixed and wireless network infrastructure, which now has 150,000 kilometers of fiber optic cables.

Shares in PLDT rose by P1 or 0.06% to close at P1,650 each.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary Media-Quest Holdings, Inc., has a stake in Business-World through the Philippine Star Group, which it controls.