Digitel turns around with P334-million profit

MANILA, Philippines - Gokongwei-owned Digital Telecommunications Phils. Inc.(Digitel) posted a complete turnaround in its operations as it registered a net income of P334 million in the first quarter this year, recovering from a P286.6-million loss in the same period last year.

Revenues (service and non-service) totaled P3.9 billion, a 21.5-percent increase from the P3.2 billion generated in the first quarter last year, driven mainly by the growth in the wireless segment under the Sun Cellular brand.

Consolidated earnings before interests, taxes, depreciation and amortization (EBITDA) reached P1.2 billion, a 16.7-percent growth from the P1.06 billion registered during the first quarter last year, due primarily to the higher service and non-service revenues generated by the wireless business.

While the wireless communication services business posted a net income of P531 million as against P118.5 million in the same period last year, the wireline voice business reduced its losses to P235.7 million from a loss of P429.8 million last year. The wireline data services posted a higher net income of P38.7 million from P24.7 million last year.

The wireless communication services business posted a 35.7-percent growth in operating revenues, from P2.2 billion to P3.05 billion. Net service revenues, 67 percent of which came from unlimited services, improved 35 percent, attributable mainly to the continued success of the unlimited service portfolio and increase in subscriber count.

Company officials said upgrading their services by continuously expanding network coverage through aggressive network rollouts directly contributed to the increase in subscriber base, adding that the introduction of new products was also a major factor in increasing net service revenue.

Meanwhile, the wireline voice communication services group posted a 14.6-percent decline in revenues to P742 million from P868.5 million, mainly due to lower revenues from international and domestic tolls and local exchange.

The company also reported that revenues for wireline data services for the first three months of 2010 grew 15.1 percent to P114.9 million from P99.8 million mainly due to higher revenues from new connections on domestic data and Internet, and increased IP-VPN services subscription.

Digitel is 47.45 percent-owned by conglomerate JG Summit Holdings. Its wireline services are provided through over 400,000 lines throughout Luzon while its wirelss services are provided by wholly-owned subsidiary Digitel Mobile Phils. Inc. under the Sun Cellular brand.