Social media, smartphones cause dip in PLDT revenues

The increasing demand for social media and the availability of smartphone gadgets has affected revenues of the Philippine Long Distance Co. (PLDT) from text messaging and voice services.

PLDT president Napoleon Nazareno said on Tuesday that these factors caused a drop in the firm’s revenues in the first half of the year.

PLDT saw an increase in its cellular subscriber base to 2.2 million in the first half but its revenues from cellular data and text messages went down by 2 percent and combined cellular and fixed voice revenues dropped by 8 percent.

“Wireless service revenues dipped 4 percent to P45.7 billion for the first half of 2011 compared with P47.9 billion recognized in the same period last year. Cellular voice revenues declined 7 percent to P19.9 billion resulting from lower revenues from international services and domestic outbound call volumes. Cellular data or text revenues likewise fell 2 percent to P20.6 billion, with text volumes declining 10 percent,” said Nazareno during a video conference at the PLDT Innolab facility in Mabolo, Cebu City.

The stiff competition in the industry has also caused the rates of these two services to drop with voice calls only at 77 centavos per minute and text messaging or SMS now at only 12 centavos per SMS sent from 18 centavos in the past.

Nazareno however expects the drop in revenues in the cellular and voice services to be addressed with the firm preparing to match product offerings to that of the competitors.

He, however, said that the dip in revenues of cellular data, text and voice services had been offset by the revenues from the mobile broadband which increased by 44 percent or P498 million from 345 million in the same period last year.

PLDT’s broadband performance also showed healthy figures with an increase of 5 percent in revenues from wireless broadband or their SmartBro services ending with P4 billion for the first half from only P3.8 billion in the same period last year.

Wireless broadband now accounts for 7 percent of the wireless service revenues of P45.7 billion.

“Smart continues to invest in its cellular and multi-platform broadband networks while upgrading its existing transmission, core and access facilities. Smart’s 3G and HSPA networks now cover 50 percent and 47 percent of the country’s population, respectively,” he said.

Fixed line services revenues also decreased by 7 percent to P23.5 billion in the first half of 2011 due to the strengthening of the peso.

“The stronger peso has impacted unfavorably to the business. Had the Peso remained stable, service revenues would have been higher by P300 million,” he said.

Like the cellular subscriber base, fixed line subscribers also grew by 15 percent to nearly 699,000 from only 609,000 at the end of June in 2010.

The firm has sharpened its focus on customer value by reorganizing themselves along customer lines rather than technology shown through the announcement of its “Home” and “Alpha” segments.

Other business segments of PLDT like their ICT or information communication technology business as well as Meralco showed healthy growths of 3 percent and 26 percent respectively.

Nazareno said that despite the drops in some of their business segments, they had remained optimistic of the prospects of their business including the pending merger of Digitel Telecommunications Philippines of the JG Summit Group.

“Last March 29, PLDT and JG Summit Holdings, Inc. announced the approval by respective Boards of Directors of the acquisition by PLDT of JG’s and certain other parties’ ownership interest in Digitel. This was originally scheduled for closing on June 30. The transaction is still awaiting various regulatory approvals and the closing period has now been extended to Aug. 26 after a long approval process by the government,” Nazareno said.

With the merger to take effect soon, Nazareno said that they were expecting both businesses to complement each other in terms of product and value propositions to their customers.