Bayan expects to end year with 12%-15% revenue hike

Bayan Telecommunications expects to end the year with a 12-to 15-percent growth in both revenues and earnings before interests, taxes, depreciation and amortization (EBITDA) despite the current economic crunch.

Bayan chief executive consultant Tunde Fafunwa said while both revenues and EBITDA grew 18 to 20 percent during the first half of 2008, the company has opted to adopt a more conservative and cautious estimate of yearend growth considering the effects of inflation on consumer spending.

On the other hand, the bottom line numbers will largely depend on what the peso-dollar exchange rate will be until the end of the year. “If the exchange rate remains at P46 to a dollar, then we might end the year with a net loss largely due to foreign exchange losses. However, if the rate goes down, then we might have better numbers,” Fafunwa explained.

Bayan’s foray into the wireless landline business has substantially improved the company’s revenues. While voice traditionally accounted for 60 percent of revenues and data, 40 percent, the share of voice — which includes both fixed and wireless landline — is now up to 70 percent.

The company is still the country’s biggest wireless landline operator, accounting for around 65 percent of the market with 160,000 subscribers. Philippine Long Distance Telephone Co. (PLDT) is second with 60,000 subscribers. Other players in this relatively new business include Digitel and Globe Telecom.

While the wireless landline market is recording an average revenue per user (ARPU) of P200 to P250, Bayan’s wireless landline has an ARPU of P900.

According to Fafunwa, they have just completed the next phase of their base station rollout, bringing to 450 the number of landline base stations as against only 275 at the start of the year.

BayanWireless now covers 80 percent of Metro Manila. It is also present in other areas including the Bicol Region, Iloilo, Butuan, Cagayan de Oro, Davao and General Santos.

Bayan officials earlier revealed that they are preparing their application with the National Telecommunications Commission (NTC) for a provisional authority to operate in other parts of the country, primarily in Northern and Southern Luzon.

Fafunwa expects to increase their wireless landline subscribers to over 200,000 by next year. This year, Bayan invested P1.5 billion for the expansion and upgrade of its wireless landline network.

Meanwhile, the company’s fixed landline service currently has 230,000 subscribers, lower than the 240,000 to 250,000 reported as of end-2007. “We see the decline continuing until next year before it starts picking up again,” Fafunwa said.

Bayan’s digital subscriber line (DSL) business reported a 60,000 subscriber base as of the first half of this year, 50 percent more than the first half of last year.

Also, Bayan unveiled the results of a research conducted by Firestarters which revealed that Filipinos could cut down by up to 50 percent their phone bills should they avail of the benefits of Bayan’s wireless landline service. The research covered 520 respondents.

The potential savings figure was derived from comparing the costs associated with commonly used services found in cellphones and Bayan’s wireless landline and average usage habits. The four main features compared were local landline calls, mobile phone calls, national direct dial calls and international direct dial calls.

In terms of local landline calls, users of Bayan’s wireless landline can save up to 67 percent, mainly because it offers unlimited calling to other landlines located in the same area code.

Meanwhile, charges related to mobile phone calls can go down by up to 50 percent if they were made using a wireless landline instead of a cellphone. Similarly, charges associated with NDD and IDD calls can decrease by up to 47 percent and 74 percent, respectively. Bayan’s IDD rate is at P4.50 per minute compared to P17 per minutes (40 cents) being offered by other networks while an NDD call is at P4 per minute as against the mobile phone rate of P7.50 per minute, Fafunwa disclosed.