PLDT hikes capex to P39B

MANILA, Philippines - Dominant carrier Philippine Long Distance Telephone Co. (PLDT) has raised its budget for capital expenditures this year by 12 percent in anticipation of higher data usage amid increasing smart phone ownership.

PLDT president Napoleon Nazareno said in a press conference that the company is spending P39 billion for its capital expenditures this year or 23 percent of revenues this year.

 “Capex for 2015 is to rise further to P39 billion in anticipation of an exponential growth in network traffic from greater smartphone ownership and our initiatives to stimulate data usage,” Nazareno told reporters.

According to Nazareno, the bulk of the budget for this year would be used to activate more 3G base stations and at the same time expand its Time Division-Long Term Evolution (TD-LTE) and Frequency Division-LTE (FD-LTE).

PLDT’s actual capital expenditures last year rose to P34.8 billion or 21 percent of service revenues to enhance data and broadband businesses.

The amount was used to enhance its network through the roll-out and activation of more 3G base stations and the expansion of its 4G footprint as well as the increase in its fiber footprint at over 98,000 kilometers and fiber-to-the-home network to approximately 300,000 lines.

The capex was also used to modernize and fortify the fixed line network of PLDT through the complete migration of legacy lines to next generation network lines and the burying of overhead or aerial cable to underground conduit system.

PLDT chief financial officer Anabelle Chua said the company is finalizing loan agreements amounting to $500 million with the Bank of Tokyo-Mitsubishi UFJ Ltd. as well as Mizuho Bank Ltd.

PLDT signed a $200-million term loan facility with The Bank of Tokyo Mitsubishi last Feb. 26 to finance capital expenditure requirements for network expansion and improvement and to refinance existing indebtedness proceeds of which were utilized for service improvement and network expansion.

The loan is comprised of tranche A amounting to $150 million carrying a floating interest rate and tranche B amounting to $50 million that has  a floating interest rate on the first year and a fixed interest rate on the second year until maturity of the loan.

According to Chua,  the company is also looking at signing a loan agreement worth between $200 million and $300 million with Mizuho Bank within the first quarter of the year.

The PLDT Group also signed a P2 billion term loan facility with Bank of Philippine Islands (BPI) to finance its capital expenditures and refinance its existing loan obligations.

The proceeds of loan from BPI were utilized for its service improvements and expansion programs. The loan is payable over ten years with an annual amortization rate of one percent on the first year up to the ninth year from the initial drawdown date and the balance payable upon maturity.

The PLDT Group’s long-term debt grew 25 percent to P130.12 billion in 2014 from P104.1 billion in 2013. Of the total amount, PLDT accounted for P78.8 billion followed by wireless arm Smart Communications Inc. with P42.73 billion, and Digitel Mobile Philippines Inc. with P8.6 billion.