SMC telecom arm cuts losses by 90%

MANILA, Philippines - Publicly-held Liberty Telecoms Holdings Inc., a joint venture between diversified conglomerate San Miguel Corp. and Qatar Telecoms Group, managed to cut its losses last year due to higher revenues from its wireless broadband business.

In its 2012 annual report submitted to the Philippine Stock Exchange (PSE), Liberty Telecoms said its net loss reached P1.52 billion last year or nine percent lower than the P1.68 billion net loss booked in 2011.

The company said revenues posted a double-digit growth of 10 percent to P587.43 million last year from P532.09 million in 2011 due to higher revenues from its wireless broadband service through the Worlwide Interoperability for Microwave Access (Wimax) broadbank of Wi-Tribe Telecoms Inc.

“The group’s revenues for the period reflect the increase in subscribers of postpaid and prepaid WIMAX broadband,” Liberty said.

The company reported that its expenses fell seven percent to P1.94 billion last year from P2.09 billion in 2011 while other charges rose 69 percent to P170.42 million from P100.95 million.

Data showed that the surge in other charges could be traced to the 130 percent jump in finance costs and charges primarily due to interest expense from notes payable and additional interest-bearing advances from related parties.

The company’s assets rose 20 percent to P1.15 billion last year from P957.68 million in 2011 while liabilities jumped 33 percent to P4.92 billion from P3.69 billion.

The company said it would continue to promote and market its broadband services to expand its subscriber base and service revenue.

It also expects to capture a portion of the market by offering reliable broadband services at competitive prices.

Liberty Telecoms incurred losses amounting to P7.52 billion last year and P6.06 billion in 2011 from operations in the course of rolling out its Wimax network and building its subscriber base.

“The group and its major shareholders, however, fully understand that these losses should be expected, considering that its business operations are essentially still in the start-up stage,” the company stated in the report.

Liberty Telecoms was incorporated in 1994 and its subsidiaries include Wi-Tribe Telecoms Inc. (formerly Liberty Broadcasting Networks Inc.) and Skyphone Logistics Inc.

Its major shareholders include SMC’s Vega Telecom Inc. with 49.8 percent followed by Qatar Telecom’s GSPC (Bahrain) Qtel West Bay Holdings with 33 percent.