PLDT reorganizes ICT unit to improve efficiency, boost revenues

MANILA, Philippines - Telecommunications leader Philippine Long Distance Telephone Co. (PLDT) has approved the reorganization of its wholly-owned information and communications technology (ICT) subsidiary, ePLDT, in a bid to improve efficiency and boost revenues.

The reorganization consists of two phases. The first involves the transfer and assignment by ePLDT of its entire shareholdings in SPi Global Holdings Inc. (formerly SPi Global Solutions Corp.), ePLDT Ventus Inc. and SPi Technologies Inc. to parent PLDT for a cash consideration of around P9.04 billion.

Meanwhile, the second phase calls for the eventual transfer by PLDT of the ownership of ePLDT Ventus and SPi Technologies to SPi Global Holdings in exchange for additional shares of said corporation, subject to finalization of the terms and conditions and execution of the relevant agreements.

As part of the reorganization, ePLDT will now consist of two business groups. The first is the ICT business group which provides data center services (Vitro), Internet and Internet gaming services (iPlus Intelligent Network Inc., Infocom Technologies Inc., Digital Paradise Inc./Netopia, Level-Up! Inc./Netgames Inc.) and business solutions and applications (Bayantrade Inc.).

The second group will be the business process outsourcing (BPO) group covering customer relationship management or call center operations under ePLDT Ventus and content solutions, medical billing and coding, and medical transcription services under SPi Technologies.

ePLDT has also called for the redemption of 452.17 million preferred shares, issued to and held by PLDT. The redemption will take effect upon payment of the redemption price of P20 per share on or before July 31, 2010.

During the first quarter of 2010, ePLDT reported service revenues of P2.6 billion in the first quarter of 2010, an increase of one percent from the same period in 2009.

The company’s earnings before interests, taxes, depreciation and amortization (EBITDA) increased 82 percent to P369 million in 2010 as compared with P203 million in 2009.

ePLDT’s revenues account for seven percent of PLDT’s consolidated revenues.

Earlier this year, ePLDT said it has reorganized its businesses to create better focus and maximize scale. ePLDT Ventus, which handles customer interaction services ( call center) and SPi Technologies, the knowledge processing arm (BPO), have combined their operations and will be known as SPi Global Solutions, while Vitro Data Center and Internet and online gaming operations will remain housed under ePLDT.

The company has also appointed Maulik Parekh and Beth Liu as president and CEO of SPi Global Solutions and ePLDT, respectively.

Parekh was the general manager for Asia of Teletech while Liu was the country managing director for Accenture Philippines.

Also, the PLDT board approved a new long-term incentive plan (LTIP) covering the period 2010 to 2012 to ensure the proper execution of the group’s three-year strategic and operational business plan.

Officials said the establishment of the new plan for the next three years is contingent upon the successful achievement of certain profit targets and aligns the execution of the business strategies of the group over the same period.

The new LTIP also ensures the continuity of management, covers new hires, and assists in succession planning for the group, they added.

The board likewise approved a P1 per share cash dividend for the company’s Series A, I, R, W, AA and BB cumulative convertible preferred shares with record date of Aug. 5 and payment date of Aug. 31, 2010.