This developed as Capwire unveiled a new business plan that focuses on growth areas like satellite services for Internet and frame relay services for small and medium enterprises.
Capwire executive vice president and chief operating officer Maureen V. Santiago said the company is poised to meet the challenges with a plan that zeroes in on high-yield and high-potential areas.
The company is spending between P50 and P100 million this year to shift to the fast-growing data market.
Santiago said two of the companies interested in putting in both money and technical expertise into Capwire are based in Hong Kong while the third is based in the United States.
She said the three companies are all in the telecommunications field, but are more focused on the data business, to which Capwire is refocusing its current business.
The business plan positions the telecommunications company as a provider of bundled Internet services that are tailored-fit to meet the customers’ many and diverse communication requirements, deploying high-quality services via international private leased circuit, satellite or frame relay.
The company projects that this year, P120 million of its net revenues will be coming from data and leased facilities while P165 million will come from international long distance (ILD). Last year, P300 million of Capwire’s revenues came from ILD and only P96 million from data. Company officials project that by next year, revenues from data will surpass those from ILD.
Santiago said Capwire seeks to establish strategic partnerships with operators of broadband satellite services as the Philippine agent of these operators. Capwire, she said, can provide services to remote corporate locations in the country.
At the same time, she revealed that the company would develop its frame relay service, providing point-to-multi-point access to address the data requirements of price-sensitive SMEs.
The firm will be maintaining strategic alliances with at least two worldwide frame relay providers at any given time.
Santiago projects modest growth in the next 10 years although she admitted that the company will be hardpressed to meet the provisions of a restructuring agreement it signed with creditor banks last year.
Telecommunication firms including Capwire labored under a drop in settlement rates that affected international long distance (ILD) revenues.
ILD accounts for 78 percent of Capwire’s total revenues. The drop in settlement rates resulted in a 32-percent decrease in Capwire’s ILD net revenues from 1999 to 2001.
Capwire’s creditors had sought court action to force Capwire to settle P938 million in debts. However, Santiago said they sought amendments to the restructuring agreement earlier this year primarily because the terms drawn up with creditors were based on projections then, when Capwire was posting triple-digit growth in revenues.
The proposed amendments include a rescheduling of the value date on the repayment scheme, a reduction of the interest rate cap, and a reclassification of unpaid interest as of end-June 2001.
Santiago said they can fully settle their total debt obligations by 2011 if creditor banks agree to the amendments. – Mary Ann Reyes