In a report to stockholders, Digitel president and JG Summit chairman emeritus John Gokongwei Jr. said with the company’s entry into the highly profitable cellular market soon becoming a reality, he expressed confidence this venture will be another corporate achievement, particularly as it contributes to their bottomline earnings.
"I cannot go into specifics yet so as not to preempt competition but we are confident that given the experience of our digital-GSM management team, the versatility of the mobile technology that we have chosen to construct our network and the support of our majority shareholders, JG Summit Holdings, our venture into the mobile phone market will be crowned with success."
Digital Mobile Philippines Inc., the newly-created cellular phone subsidiary, has set the soft launch of its service this July and has targeted the start of commercial operations by the fourth quarter.
Digitel’s formal entry into the mobile phone business has been postponed since last year even as it was able to secure an extension of its provisional authority (PA) to operate as the sixth CMTS (cellular mobile telephone system) provider in the country, after Extelcom, Globe Telecom, Smart Communications, Isla Communciations and Pilipino Telephone Corp. – the last two of which have since tied up with Globe and Smart, respectively.
With an P11-billion capital expenditures budget – the biggest among the JG Summit units – Digitel will be focusing its operations on the cellular service using the GSM (global system for mobile communications) technology and is prepared to step into the next generation technology known as GPRS (general packet radio service).
However, Gokongwei said the other aspects of Digitel’s operations remain a strong source of growth for the company, which emerged as the best performing local exchange or fixed landline operator last year with a growth of 11 percent as compared with the industry average of 8.1 percent.
Digitel’s consolidated operating revenues rose 35 percent to more than P6.5 billion in 2001 and net income surging more than 1,400 percent to P67 million as the company registered growth in its fixed line subscribers, gained from currency-related adjustments in service rates, and established direct circuits with major foreign carriers, enhancing its international toll revenues.
As a result of its expansion programs, Digitel is now servicing 271 towns and cities in Luzon through 674 regional and local exchange. Its total subsriber base grew by 10 percent from 365,000 lines in 2000 to 403,000 in 2001.