MANILA, Philippines - Dominant carrier Philippine Long Distance Telephone Co. (PLDT) is spending more this year for its capital expenditures amid the expected tougher competition in the capital-intensive telecommunication industry.
PLDT chairman Manuel V. Pangilinan said the PLDT Group would earmark a higher budget for its capital expenditures this year compared to the P34.5 billion allocated for 2014.
“Most likely higher compared to 2014,” Pangilinan told reporters.
He pointed out that bulk of the amount would be used to expand the number of its cellular sites nationwide, while some would be invested for fixed lines as well as broadband and information technology (IT) businesses.
“It will be across the board. Obviously the greater percentage will go to cellular sites, but I think fixed will also get and the internet will have some investments and IT as well,” he added.
The PLDT chief said the company likely delivered the revised core income guidance of P37 billion but would face tougher competition this year.
The other main player in the country’s telco duopoly is Ayala-owned Globe Telecom Inc.
Last November, PLDT president and chief executive officer Napoleon Nazareno announced that the PLDT Group was raising its budget for capital expenditures to P34.5 billion instead of P32 billion in 2014 due to the projected increase in its broadband business.
Of the total amount, about P20.8 billion was allocated for its wireless business, while P13.7 billion was earmarked for its fixed line business.
“In anticipation of the continued growth of the market’s appetite for data services following our free internet promo as well as to meet increasing fixed wireless data demand, PLDT is accelerating its data capacity build-out in 2014 and 2015,” he added.
The PLDT Group started offering “free Internet” to all subscribers of Smart Communications Inc., Talk ‘N Text, and Sun Cellular last Sept. 26 up to Jan. 5. The promo that benefits 69 million subscribers has been extended anew to Feb. 5.
The amount allocated last year was used to finance further enhancement of 3G that currently covers all cities and 92 percent of all municipalities as well as expansion of its 4G footprint.
The PLDT Group is also expanding its fiber optic cable network footprint of at least 90,000 kilometers and is also activating a domestic fiber optic network (DFON) third leg between Visayas and Mindanao.
Nazareno pointed out that the capital expenditures would also fortify PLDT’s northern and southern Luzon aerial fiber optic cable to underground conduit system for improved reliability and resiliency during typhoons.
According to Nazareno, ongoing network activities include the partnership with Hong Kong-based PCCW to undertake the 25,000-km Asia-Africa-Europe 1 (AAE-1) Cable System.
The PLDT official said the company expects to boost the capacity of its DFON to 92,000 kilometers with a capacity of 550 gigabits per second by the first quarter of this year.
PLDT is looking at expanding its frequency/ time division long-term evolution network (FD/TD-LTE) coverage to around 2,600 base stations within the year to provide high-speed Internet services to more Filipino homes all over the country.
Nazareno also reported that the PLDT Group is pursuing the unification of the network of Smart and Sun Cellular to improve operational efficiency. The project has so far covered 100 percent of Mindanao and 78 percent of all provinces. It has so far decommissioned 300 sites and expects to shut down a total of 800 sites by the end of the year.
As of end-September, the PLDT Group had a subscriber base of 75 million as comprising of 69 million wireless subscribers as well as 3.7 million broadband subscribers and 2.2 million fixed line subscribers.