PLDT: 3rd player not a threat yet

Business World - - Front Page - Denise A. Valdez

PLDT, Inc. said on Thurs­day it does not ex­pect an im­me­di­ate sig­nif­i­cant im­pact from the en­try of a new ma­jor telecom­mu­ni­ca­tions player, as it would take sev­eral years for the lat­ter to es­tab­lish its net­work.

PLDT, Inc. said on Thurs­day it does not ex­pect an im­me­di­ate sig­nif­i­cant im­pact from the en­try of a new ma­jor telecom­mu­ni­ca­tions player, as it would take sev­eral years for the lat­ter to es­tab­lish its net­work.

“I would like to think that in the first year the im­pact (of the third telco player) would not be sig­nif­i­cant. Most likely, the third player would be a mo­bile player, so on our part the sig­nif­i­cant por­tion of our rev­enues are in fixed. We think the im­pact on the fixed line rev­enue would be mod­est,” PLDT Chair­man Manuel V. Pangili­nan said in a me­dia brief­ing on Thurs­day.

On Wed­nes­day, the Mis­la­tel Con­sor­tium, com­posed of China Telecom­mu­ni­ca­tions Corp. and com­pa­nies con­trolled by Den­nis A. Uy, was pro­vi­sion­ally named win­ner of the Philip­pines’ third telecoms li­cense.

PLDT Chief Cor­po­rate Ser­vices Of­fi­cer Ray C. Espinosa said the third telco is un­likely to achieve its com­mit­ment of min­i­mum av­er­age broad­band speed of 27 megabits per sec­ond (Mbps) and 37% an­nual pop­u­la­tion cov­er­age all in the first year, be­cause “it would take sev­eral years be­fore they can put that net­work in place and be­come op­er­a­tional.”

In a reg­u­la­tory fil­ing, the telecom­mu­ni­ca­tions giant on Thurs­day said its third quar­ter net in­come at­trib­ut­able to eq­uity hold­ers fell 16% to P4.5 bil­lion.

For the first nine months of 2018, PLDT’s at­trib­ut­able in­come dropped 26% to P16.27 bil­lion from P21.87 bil­lion a year ago due to ac­cel­er­ated de­pre­ci­a­tion of P4.5 bil­lion re­lated to its net­work as­sets.

Third quar­ter rev­enues went up 2% to P40.91 bil­lion, bring­ing the nine-month fig­ure 3% higher at P123.15 bil­lion, “pri­mar­ily due to higher rev­enues from data ser­vices in the fixed line busi­ness, as well as higher non-ser­vice rev­enues from wire­less and fixed line busi­nesses.” How­ever, lower rev­enues from mo­bile and home broad­band ser­vices, as well as con­tin­ued drop in voice rev­enues from its fixed line busi­ness weighed on the top line.

By busi­ness seg­ment, PLDT re­ported wire­less rev­enues dropped 4% to P67.67 bil­lion dur­ing the nine-month pe­riod, “mainly as a re­sult of lower rev­enues from mo­bile, home broad­band, and dig­i­tal plat­forms and mo­bile fi­nan­cial ser­vices, (but) par­tially off­set by higher rev­enues from MVNO and other ser­vices.”

Rev­enues from its fixed-line busi­ness in­creased 9% to P63.33 bil­lion dur­ing the Jan­uary to Septem­ber pe­riod, as higher rev­enues from its data ser­vices off­set lower voice ser­vice rev­enues.

Com­ment­ing on PLDT’s third quar­ter earn­ings, PNB Se­cu­ri­ties, Inc. Pres­i­dent Manuel An­to­nio G. Lis­bona said the weaker earn­ings “re­flect the ef­fects of its com­pe­ti­tion with Globe.”

“In one of PNB Se­cu­ri­ties’ re­cent re­ports, we note that PLDT’s re­tained earn­ings have been de­creas­ing since 2012 and could in­cur a deficit if it con­tin­ues to pay div­i­dends at the cur­rent pace,” he said in a mo­bile mes­sage.

Mean­while, Mr. Pangili­nan said PLDT ex­pects to close this month the deal sell­ing a stake in Voy­ager to in­vest­ment firm Kohlberg Kravis Roberts & Co. (KKR), Chi­nese tech com­pany Ten­cent Hold­ings Ltd. and World Bank sis­ter or­ga­ni­za­tion In­ter­na­tional Fi­nance Corp. (IFC).

“The last re­main­ing in­vestor we’re wait­ing fi­nal ap­proval from is IFC. They’re likely to in­crease their in­vest­ment size... I think once we get fi­nal ap­proval for their up­sized in­vest­ment, that closes the books... We should ex­pect the trans­ac­tion to com­plete on or be­fore the end of Novem­ber,” he said.

PLDT said last month it al­ready signed an agree­ment with KKR and Ten­cent for $175-mil­lion worth of shares in Voy­ager.

When the deal is done, Mr. Pangili­nan said PLDT’s stake in Voy­ager would be re­duced to ap­prox­i­mately 48%.

PLDT also said on Thurs­day it is in­vest­ing P2.15 bil­lion in in­for­ma­tion and IT so­lu­tions provider Mul­tisys Tech­nolo­gies Corp. to aid the com­pany in soft­ware de­vel­op­ment ca­pa­bil­i­ties.

The deal will be coursed through its sub­sidiary PLDT Global In­vest­ments Hold­ings, Inc.

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

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