By Azer N. Parrocha
MANILA, Nov 5 (PNA) — The Philippine Long Distance Telephone Co. (PLDT) has cut its 2014 full-year profit outlook due to a reported decrease in its core net income in the third quarter of 2014.
PLDT president and CEO Napoleon Nazareno said in a press conference on Tuesday that the company’s consolidated core net income decreased by one percent to Php 28.6 billion from Php 28.8 billion in the same period last year.
Nazareno said that the decrease was due mainly to the rise in cash operating expenses, particularly rent and maintenance costs, an increase in product subsidies and a higher provision for income tax.
Its net income also declined three percent to Php 28 billion from Php 29 billion in the same period in 2013 because of a dip in core net income, among other reasons.
PLDT chairman Manuel Pangilinan, meanwhile, said that these were reasons that led the company to cut its profit outlook by Php 2.5 billion to Php 37 billion.
At the same time, PLDT also announced an increase of almost eight percent in capital expenditure this year from Php 2.5 billion to Php P 34.5 billion, compared to an earlier projected number of Php 32 billion.
Meanwhile, the company said that its wireless subsidiaries Smart Communications, Inc (Smart) and Digitel Mobile (Digitel) continued to lead the industry in terms of both revenues and subscribers.
Wireless service revenues of Php 85.8 billion for the first nine months of 2014 were slightly behind the Php 86.4 billion recorded in the same period last year, reflecting the pressure on SMS and inbound international revenues.
Postpaid revenues now account for 20 percent of total cellular revenues, having grown 14 percent to Php 15.8 billion at the end of September 2014.
As for the telco’s broadband and internet revenues for the first nine months of 2014, it totaled Php 23.4 billion, a 20 percent growth year-on-year; broadband and internet now account for 19 percent of total Group service revenues.
Wireless broadband revenues, exclusive of mobile Internet revenues, increased by seven percent to Php 7.5 billion, compared with the Php 7 billion recorded last year.
Moreover, mobile Internet usage continues to grow strongly, with mobile Internet revenues increasing by 69 percent to Php 5.7 billion in the period under review from Php 3.4 billion in 2013.
Last September, Smart, Sun Cellular, and Talk ‘N Text launched a free Internet promo whereby subscribers can avail of 30MB of data usage per day, excluding video streaming, VoIP and chat applications, free of charge. The promo runs until January 5, 2015.
Nazareno said that competition has been escalating on all fronts and that the company has responded to protect market share.
PLDT is currently fast tracking data capacity build-out due to the positive response to free Internet promo as well as the company’s TD-LTE build-out to meet increasing fixed wireless data demand, he said.
“In light of the market’s continued appetite for data services, we expect higher capex levels for 2014 and 2015,” Nazareno said.
Pangilinan said that the telco’s third quarter results reflected intensifying competition in the cellular space of its business, to PLDT has taken measures to respond to competition and stabilize share of market.
“Based on this market assessment and on information currently available to the Company, PLDT is revising its profit guidance for the full year to Php 37.0 billion, from the Php 39.5 billion previously disclosed,” he concluded. (PNA)