PLDT vows to pour in $1B till 2008

Business Mirror
Mar 1, 2006

PLDT vows to pour in $1B till 2008

IN SPITE of the political turmoil in the country in the past few days, the Philippine Long Distance Telephone Co. (PLDT) said Monday it will continue with its plans to keep injecting fresh investments totaling $1 billion until 2008.

Corporation chairman Manuel V. Pangilinan said this is broken down into P18 billion a year starting this year. He added PLDT had invested a total of $2.7 billion, approximately P150 billion, in the past seven years.

Investments for its wireless sector, mainly on its 3G roll out and expansion of wireless broadband, is P9 billion; while the other P9 billion will be spent for upgrade of its Next Generation Network (NGN).

Pangilinan said past and future investments clearly present PLDT as a "serious partner to the country's economic growth and welfare. Our attitude is business as usual. Investments, though, are scalable. We will try as much as we can to extract from the macro side of things. We will stay focus and push on with what we intend to do."

He was responding to questions on the effect of Presidential Proclamation 1017 on investments specifically that of the PLDT group.

While external factors are beyond PLDT's control, Pangilinan said the company has taken a more prudent view of this year's prospects.

PLDT considers year 2006 as "rest year" because PLDT will lay down the foundation for earnings growth in 2007 when operating environment is expected to be more challenging.

He said core earnings this year will be "benign", costs will be managed, but depreciation will be higher. Interest expense will continue to decline while provision for income taxes will increase significantly.

"Our targets for 2006 are quite fluid. We have put a lot of caveat in the guidance numbers. Our revenue growth will be dampened by the foreign exchange rate. There are also macroeconomic factors that will affect consumer spending. All of these will be taken into account," he said.

PLDT has already identified sources of the company's future growth-one of which is the estimated 20 to 25 million potential mobile phone subscribers still untapped.

"There are still certain segments of the market that has not been fully penetrated yet. This represents the D and E markets and the lower C part of the market," said company president Napoleon Nazareno. At end-2005, the country's cellular penetration rate stood at about 40 percent.

New products and price plans in the fixed line business and the development of content and new services in the 2G network services had also been included in the plans to expand its markets. L. Lectura