SAN MIGUEL Corp.-backed Liberty Telecom Holdings Inc. widened its losses in the first half of the year as the company continued to invest in the expansion of its wireless Internet infrastructure to reach more subscribers.
Revenues were up nearly sevenfold year on year following a significant increase in the subscriber base of its broadband Internet brand, wi-Tribe.
Liberty Telecom posted a net loss of P713 million in the first six months of the year, higher than the P411 million recorded in the same period last year.
“Wi-tribe Telecoms continues to acquire more subscribers for its postpaid WiMAX (wireless interoperability microwave access) broadband services,” the company said in a disclosure earlier this week.
This translated to P241 million in service revenue for the period, which was 579-percent higher than the P36 million earned in the same period last year.
The company said costs and expenses incurred in the first six months of 2011 amounted to P950 million, 110-percent higher compared to the P451 million spent in 2010.
Costs surged as of June “as a result of the group’s efforts to accelerate subscriber acquisition, ongoing infrastructure project and intensified building-up of its commercial operations.”
Liberty Telecom mainly attributed the increase in costs to the increase in selling expenses, salaries and wages and network-related expenses.
These include rentals and utilities, depreciation, and other expenses necessary for the operation and maintenance of its wireless broadband telecommunications network service.
The company said it took out a loan of over P1 billion from a local bank earlier this year to bankroll its expansion activities. As of the end of June, the company said it had spent about P950 million.
“The funds were used principally for working capital requirements and capital expenditures,” the company said.
Cash used in operating and investing activities for the six months ending June 30 decreased by 43 percent and 76 percent, respectively, as the company nears the completion of its network rollout for WiMAX services.
Liberty Telecom is a joint venture between conglomerate San Miguel and Qatar Telecom. Paolo G. Montecillo