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PLDT: 3rd player not a threat yet

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PLDT

PLDT, Inc. said on Thursday it does not expect an immediate significant impact from the entry of a new major telecommunications player, as it would take several years for the latter to establish its network.

“I would like to think that in the first year the impact (of the third telco player) would not be significant. Most likely, the third player would be a mobile player, so on our part the significant portion of our revenues are in fixed. We think the impact on the fixed line revenue would be modest,” PLDT chairman Manuel V. Pangilinan said in a media briefing on Thursday.

On Wednesday, the Mislatel Consortium, composed of China Telecommunications Corp. and companies controlled by Dennis A. Uy, was provisionally named winner of the Philippines’ third telecoms license.

PLDT Chief Corporate Services Officer Ray C. Espinosa said the third telco is unlikely to achieve its commitment of minimum average broadband speed of 27 megabits per second (Mbps) and 37% annual population coverage all in the first year, because “it would take several years before they can put that network in place and become operational.”

In a regulatory filing, the telecommunications giant on Thursday said its third quarter net income attributable to equity holders fell 16% to P4.5 billion.

For the first nine months of 2018, PLDT’s attributable income dropped 26% to P16.27 billion from P21.87 billion a year ago due to accelerated depreciation of P4.5 billion related to its network assets.

Third quarter revenues went up 2% to P40.91 billion, bringing the nine-month figure 3% higher at P123.15 billion, “primarily due to higher revenues from data services in the fixed line business, as well as higher non-service revenues from wireless and fixed line businesses.” However, lower revenues from mobile and home broadband services, as well as continued drop in voice revenues from its fixed line business weighed on the top line.

By business segment, PLDT reported wireless revenues dropped 4% to P67.67 billion during the nine-month period, “mainly as a result of lower revenues from mobile, home broadband, and digital platforms and mobile financial services, (but) partially offset by higher revenues from MVNO and other services.”

Revenues from its fixed-line business increased 9% to P63.33 billion during the January to September period, as higher revenues from its data services offset lower voice service revenues.

Commenting on PLDT’s third quarter earnings, PNB Securities, Inc. President Manuel Antonio G. Lisbona said the weaker earnings “reflect the effects of its competition with Globe.”

“In one of PNB Securities’ recent reports, we note that PLDT’s retained earnings have been decreasing since 2012 and could incur a deficit if it continues to pay dividends at the current pace,” he said in a mobile message.

Meanwhile, Mr. Pangilinan said PLDT expects to close this month the deal selling a stake in Voyager to investment firm Kohlberg Kravis Roberts & Co. (KKR), Chinese tech company Tencent Holdings Ltd. and World Bank sister organization International Finance Corp. (IFC).

“The last remaining investor we’re waiting final approval from is IFC. They’re likely to increase their investment size… I think once we get final approval for their upsized investment, that closes the books… We should expect the transaction to complete on or before the end of November,” he said.

PLDT said last month it already signed an agreement with KKR and Tencent for $175-million worth of shares in Voyager.

When the deal is done, Mr. Pangilinan said PLDT’s stake in Voyager would be reduced to approximately 48%.

PLDT also said on Thursday it is investing P2.15 billion in information and IT solutions provider Multisys Technologies Corp. to aid the company in software development capabilities.

The deal will be coursed through its subsidiary PLDT Global Investments Holdings, Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls. — Denise A. Valdez