MANILA, Philippines - Telco giant Philippine Long Distance Telephone Co. (PLDT) has raised its capital expenditures to a record P43 billion this year from P39 billion mainly to upgrade infrastructure for improved network and data connectivity.
PLDT president and chief executive officer Napoleon Nazareno said capital expenditures are expected to reach P43 billion this year, a record-high for the firm, to improve network quality and customer experience amid the anticipated growth in data usage.
Nazareno said the company would continue to invest heavily to expand its 3G and 4G coverage and capacity, extend its fiber assets and increase data center capacity.
“In addition, we will continue to invest heavily on increasing network resiliency and redundancy in order to ensure consistent and reliable delivery of connectivity for customers,” he said.
PLDT chairman Manuel V. Pangilinan said expenditures would likely stay elevated until 2016 as the company aims to improve its services.
In terms of core net income outlook, Pangilinan said the company is sticking to its P35 billion guidance for the year given the first half results.
The core net income guidance for this year is 6.4 percent lower than last year’s figure.
From January to June, PLDT’s consolidated core net income reached P18.9 billion, down five percent from P19.8 billion last year amid lower consolidated service revenues.
PLDT’s total revenues for the first semester were nearly unchanged at P85.2 billion compared to last year.
Consolidated service revenues, meanwhile, dropped two percent to P81.2 billion in the first six months of the year from P82.5 billion in same period in 2014, as revenues from international and national long distance segments continued to decline.
Pangilinan said the decline in toll revenues is expected to continue to affect the company’s revenues as consumers use voice calls less with the onslaught of the Internet.
“This year, the first half decline in toll traffic was P2.5 billion and quite likely, we see similar decline for the second half, so we anticipate it will be roughly P4 to 5 billion in decline in revenues in 2015 and will probably carry through 2016 and maybe a year or two beyond that,” he said.
Another vulnerable point for the company is the prepaid wireless business which would likewise affect revenues.
Total expenses of the company went up three percent to P64.2 billion in the first half of the year from P62.4 billion a year ago.
The company’s net income reached P18.7 billion as of end-June this year, six percent lower than the P20 billion a year ago.
Moving forward, the company will continue to focus on enhancing its customer’s digital experience through improved network capability.
“Our goal is to be nothing less than the consumer’s preferred digital services provider. And we will achieve this by offering the consumer a superior value proposition by continuously broadening the array of our products and service offers, including leveraging on fixed and wireless assets, underpinned by a network that will enable a quality customer experience. We are investing heavily in the ‘digital spine’ for our networks and platforms that will serve as the foundation for this transformative process and we expect to see the benefits of these initiatives to fully manifest themselves by 2016 at the earliest,” Pangilinan said.