Earnings of Philippine telecom firms

Earnings of Philippine telecom firms are expected to grow at a low single-digit next year due to subscribers’ preference on unlimited services and maturing market, an executive of the country’s most profitable telecom firm said.

“I think there will still be growth next year, volume wise. [But] the thing is the yield is going down. So, revenue wise, the growth will be minimal,” Napoleon Nazareno, president and chief executive of Philippine Long Distance Telephone Co. (PLDT) said.

PLDT’s text revenues fell 14 percent to P20.9 billion in the first six months, despite a 27 percent increase in text volumes, as they remain under pressure from the proliferation of lower yield offerings, multiple-SIM ownership and regulator-mandated load validity extensions.

The bucket pricing had started when Sun Cellular entered the market in 2003 with an unlimited call and text service offering.

In response, rivals Globe Telcom and Smart Communications Inc. created a new set of promo offerings that kept competition tight. Since then, Globe and PLDT’s revenue started to shrink.

Nazareno projected that the industry’s revenue may grow at a low single-digit next year.

In the first six months, PLDT’s consolidated service revenues went down by 1 percent to P72.2 billion from a year ago.

Owned by Hong Kong-listed First Pacific Co. Ltd. and Japan’s NTT Group, the Philippines’ largest telco said its net income inched up by a percent to P10.26 billion in the second quarter of the year from P10.14 billion in the same period last year.

Separately, Globe said its second-quarter net income reached P2.39 billion, down from P3.25 billion in the same period last year.

Peter Bithos, Globe consumer business senior adviser had said that despite the tougher telecom industry, there are still pocket of growth.

Bithos cited the broadband business as the next growth are for the industry.

Nazareno said the broadband business will propel the telco players revenue, which is expected to grow over 20 percent.

The National Telecommunications Commission (NTC) earlier project4ed that the number of broadband service subscribers will continue to register three-digit growth in the next two to three years.

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