Liberty Telecoms posts losses on higher spending
San Miguel Corp.’s wireless Internet arm Liberty Telecoms Holdings Inc. continued to report an acceleration in spending as it grew its user base and network reach.
In a disclosure to the Philippine Stock Exchange, the listed firm said it widened its losses to P1.13 billion for the January-to-September period from P741 million the previous year due to higher expenses attributed to its growing operations.
For the third quarter alone, the company, which operates mobile Internet brand Wi-Tribe, posted a net loss of P415.92 million, up 26 percent year on year.
Expenses for the third quarter rose 27.93 percent to P530 million “as a result of the group’s efforts to accelerate subscriber acquisition, ongoing infrastructure project and intensified building-up of its commercial operations.”
The nine-month losses were attributed to a 71-percent increase in expenses to P1.48 billion in the nine-month period.
Despite the losses, the company said its revenue growth—about 241 percent to P389 million for the nine-month period and 85 percent to P145 million in the third quarter—was cause for optimism, especially since the uptick in spending has started to pay off.
“Wi-Tribe Telecoms continues to acquire more subscribers for its postpaid wi-max broadband services,” the company said in the disclosure.
“The telecom business requires huge infrastructure investments that cannot be recouped overnight,” Liberty Telecoms treasurer Paul Bernard Causon said in a separate statement.
“We are still in the process of building our customer base but we are committed to making the necessary investments as the need arises because we intend to be a serious contender in this business,” he said.
Liberty Telecoms officials earlier this month said its subscriber base had grown to 80,000 users at the end of the third quarter. This was up from about 30,000 at the end of last year.
In a bid to attract even more users, Wi-Tribe recently doubled its maximum Internet connection speeds for its postpaid subscribers without increasing service rates.
The company also recently introduced its first prepaid wireless Internet offering to cater to more budget-conscious subscribers. The company expects to have at least 100,000 users by the end of 2011.
Liberty Telecoms is a joint venture between diversifying conglomerate San Miguel and Qatar’s QTel, which has operations in several parts of the Asia-Pacific and the Middle East.
