051007: PLDT seeks change in NDD fee

IF the Philippine Long Distance Telephone Co. (PLDT) will modify the maintenance fee on national direct distance dialing (NDD) projected revenues will remain flat at P157.5 million on the fourth and fifth years of implementation. In a study PLDT gave the National Telecommunications Commission (NTC), the phone giant said projected net revenues will hit P134,819,794 million in the first year, down to P121,702,386 in the second year, and up to P157,497,205 in the third year. During years four and five, the phone giant is expected to post the same projected net revenues at P157.49 million. PLDT expects no new subscribers in the fourth and fifth years of implementation. PLDT gave the study because it wants to adjust the monthly handling fee for NDD to about P200, and it wants NTC to approve the adjustment for residendtial and business subscribers.  NDD allows subscribers to make domestic long distance calls without passing through an operator. PLDT now charges a monthly P20-maintenance fee for P10 per call on top of the monthly subscription rate pegged at around P700 for residential subscribers and P1,200 for business subscribers. The service was expanded in December 2005 to include PLDT to subscribers to the Smart Telecommunications network with a monthly fee of P50. This is now longer available to new subscribers, however, Smart is a unit of PLDT.  PLDT discontinued the expanded service in February 2006, after rival Globe Telecom complained with the NTC that the service violates commission rules on predatory pricing. Should the commission approved the adjusted handling fee, PLDT stands to attract 349,055 to the optional NDD service beginning year one. PLDT sees a decline in the subscriber count by 24,956 in the second year and 95,340 in the third year. Thus, subscriber count during the second year will be at 231,540 and 136,200 in the third, fourth and fifth years. The projected expenses from year one to five is expected to reach P131.18 million, P137.93 million, P153.24 million, P153.32 million and P153.41 million, respectively. “PLDT proposes to modify the foregoing handling and maintenance fee applicable for a period of five years from the date of its implementation at a maximum rate cap of P200 per month in order to allow [PLDT] the flexibility of modifying said handling and maintenance fee within the applicable period,” the phone giant said in its application filed in January this  year. PLDT proposed that monthly handling fee for residential subscribers currently hooked up with the optional NDD service be adjusted to a minimum of P70 with a rate cap of P200 while business subscribers be charged with a minimum of P150 but not exceeding P200. “[PLDT] is constrained to implement the foregoing changes in the applicable handling and maintenance fee in order to support the viability of continuously providing and maintaining the optional NDD calling feature for its customers at required service level,” it said. The monthly maintenance fee, it added, will cover the company’s costs incurred for maintaining and managing separate data base and other specialized service offerings inclusive of unlimited call duration feature at affordable rates as well as various freebies and privileges, such as discounted special telephone sets and loyalty rewards  bundles. --Lenie Lectura    *****  First Pacific may buy Asian phone company  By Paul Gordon and Francisco Alcuaz Jr. Bloomberg  MANILA AND HONG KONG—First Pacific Co., owner of the Philippines’ biggest phone company, is in talks to buy an Asian telecommunications company in “weeks” for between $800 million and $1 billion, chief executive Manuel Pangilinan said. “We’re looking now at a specific opportunity in Asia,” Pangilinan said in a television interview, declining to identify the company or its location. First Pacific, the biggest shareholder in the Philippines’s largest phone company, may face competition in its attempts to buy Asian telephone assets as companies including Singapore Telecommunications Ltd. and Hutchison Telecommunications International Ltd. expand in the region’s emerging markets. “The valuations for telecommunications assets are being pushed up as companies such as Singtel scour the market for opportunities,” said Ramakrishna Maruvada, an analyst at Macquarie Securities Ltd. in Singapore. Shares of Philippine Long Distance Telephone Co., 13.8 percent owned by First Pacific, rose 0.2 percent to P2,555 at the end of trading in Manila, rebounding from Tuesday’s 0.6-percent decline. First Pacific, based in Hong Kong, is also studying the acquisition of power plants “in China and elsewhere in the region,” Pangilinan said. Hutchison Telecom, controlled by Hong Kong billionaire Li Ka-shing, will invest as much as HK$5 billion in its units in Indonesia and Vietnam, where the company started commercial services this year, chief executive officer Dennis Lui said Tuesday.  --With reporting by Mark Lee in Hong Kong, Liza Lin in Singapore and Clarissa Batino in Manila.

 

http://www.businessmirror.com.ph/05102007/companies04.html