BayanTel turns around, nets P820M in H1

Lopez-owned Bayan Telecommunications reported a turnaround in its first half financial performance this year with net earnings of P820 million, compared with the P1.19 billion loss incurred the same period a year ago, driven by the strong performance of its data and voice businesses.

BayanTel chief executive consultant Tunde Fafunwa said revenues grew 12 percent to P2.6 billion with the Internet business registering the biggest increase in revenues at P466 million or 58 percent higher as the number of DSL subscribers jumped 150 percent to about 40,000 nationwide.

Data revenues went up 23 percent to P992 million as international leased lines registered a 10 percent growth in revenues to P119 million.

Revenues from voice operations, comprising of monthly rates paid by telephone subscribers and local and international long distance revenues, rose six percent to P1.57 billion.

BayanTel’s EBITDA (earnings before interest, depreciation and amortization), however, fell six percent to P823 million from P873 million as the company set aside more funds for the roll-out of its wireless landline business.

“Our financial performance indicates that our core businesses have delivered a steady stream of revenues and that our new business initiatives are paying off,” Fafunwa said.

Given its strong first half performance, the company is confident of sustaining its income growth for the year and expects its bottom line to reach between P1.4 billion to P1.6 billion on the increasing subscriber base in wireless landline and DSL services, and a growing market share in corporate data services.

“Right now we are ramping up our wireless landline business and we expect to have over 100,000 subscribers by yearend. We project our wireless landline subscribers to account for about 30 percent of our total subscriber base and to deliver up to 20 percent of our total revenues,” Fafunwa said.

Since its launch in the middle of 2006, BayanTel is now the leading provider of wireless landline service with the widest coverage which includes key cities in Metro Manila such as Marikina, Pasay, Caloocan and Manila, and in the Visayas and Mindanao like Davao, Iloilo, Cagayan de Oro, Naga, Legaspi, Tacloban, Butuan and Gen. Santos.

Beginning September, the service will be available in Parañaque, San Juan, Mandaluyong, Las Piñas and Quezon City.

Fafunwa said Bayan has committed to spend P1.5 billion for the continued expansion of its wireless landline service in other areas such as Bicol, Eastern Visayas and Northern Mindanao.

“There is more opportunity for BayanTel to get a bigger slice of the DSL market as industry-wide DSL revenue is expected to continue to grow due to reduced rates and as more consumers utilize the wide variety of applications in the Internet such as gaming, social networks and downloading,” Fafunwa said.

“We have seen impressive take-up in the cities where we are available. We are continuing to deploy base stations in Metro Manila and other cities nationwide so more consumers will enjoy the unlimited local calling while on the go,” Fafunwa said.

BayanTel, which has been under receivership since 2004, is setting aside P760 million to P800 million this year to pay down debt, using internally-generated cash.  It has so far paid P2 billion out of its total debt of $325 million.

Weighed down by its huge debt, the company sought corporate rehabilitation with the Pasig City Regional Trial Court on July 2003 to restructure its short-and long-term bank loans and bonds payable.

The rehabilitation plan called for the extension of the repayment terms of the company’s outstanding loans and bonds, reduction in interest rates and conversion of certain debts into equity.