BayanTel sustains growth streak in revenues, EBITDA

Lopez-owned Bayan Telecommunications (BayanTel) posted significant growth in its key financial metrics, with net revenues for the first half of 2005 up nine percent and earnings before interest, taxes, depreciation and amortization (EBITDA) growing 19 percent in the same period compared to last year.

Although it may take five or more years before BayanTel chorus in profits, chief executive consultant Tunde Fafunwa is confident that the current growth levels are sustainable.

"With out solid performance in the first half of the year, we have now seen six consecutive quarters of sustained growth in our business," he said.

From January to June 2005, BayanTel’s net revenues increased nine percent to P2.9 billion from P2.66 billion in the same period in 2004. This, officials said was on the back of a 17-percent hike in data services during the comparative period, with strong growth coming from international private lines, frame relay, and IP-VPN services. Voice revenues were up one percent.

DSL (digital subscriber line) revenues also posted a 96-percent increase at P130 million compared to P66 million in the first half of 2004. From 8,000 DSL subscribers as of end June, Fafunwa expects the numbers to increase to 15,000 by yearend.

During the first six months of the year, Bayantel posted a 19-percent growth in EBITDA at P1.3 billion compared to P1.09 billion during the same period last year. This year’s EBITDA is 65 percent more than that in 2003.

"We believe that a 15-to 18-percent growth in EBITDA for the whole of 2005 compared to last year will be a sustainable level." Fafunwa said EBITDA margin is currently at 44 percent while operating income is at a positive level.

Fafunwa attributed the incremental growth in Bayantel’s revenue and cash flows and the steady increased in fixed line and DSI, subscriber base to its approach of guaranteeing satisfaction of its customers. "Our exceptional performance during the said period amidst an intensely competitive landscape underscored the gains from our customer-focused approach which we believe is critical towards ensuring sustainable growth and continued viability of our business," he said.

As of June this year, BayanTel’s fixed line subscribers have grown close to 280,000, the highest it has achieved since its heydays in the late 1990s. DSL subscribers have also seen solid growth particularly in the SME and residential markets in Metro Manila and hey province.

During the first three months of the year, Bayantel posted revenues of P1.4 billion and EBITDA of P592 million.

For the second half of the year, Fafunwa said the company will focus on the rapid implementation of strategic initiatives such as wireless broadband, wireless local loop, MPLS which is the IP core and value-added IP-based applications. "The challenge is to sustain our EBITDA and revenue growths," he emphasized.

Bayantel recently became the first enfranchised telecommunications provider to launch a VoIP (voice over Internet protocol) service for residential customers known as Sky Internet VoIP, which is the only VoIP service in the market that allows subscribers to use a regular or analog phone with a DSL connection to make long distance calls at 85 percent less than prevailing long distance call rates.

It also launched a breakthrough service in the DSL market with its Speed on Demand feature that allows users to go beyond their subscribed speeds without any additional charges on the monthly recurring rate. It likewise offered the lowest DSL offer yet at P800 a month for a 192 kbps plan.

On top of these offerings, Fafunwa said Bayantel has vigorously adopted and deployed new technologies such as wireless broadband application for both residential and corporate use using either WiMax or other new technologies. It has already identified priority areas to deploy wireless broadband service nine to 12 months.