Liberty leasing out telecom assets
Lliberty Telecoms Holdings Inc., a listed provider of high-speed Internet services backed by San Miguel Corp. and Qatar Telecom, may lease out more existing telecommunication assets as part of a broader review of its operations as it exits corporate rehabilitation.
Liberty president and CEO Bienvenido Bañas told reporters that the company, which continued to book losses year-on-year, was considering leasing out more than half of its 500 base stations in Metro Manila to other telecommunication service providers.
Liberty mainly provides high-speed Internet services through unit Wi-Tribe Telecoms Inc. But subscribers have been declining in recent years amid stiff competition. Liberty has 50,000 pre-paid and postpaid subscribers, Bañas said.
“Right now, we need cash to support existing operations,” Bañas said. Leasing out its telecommunication assets would allow Liberty to earn “new revenues,” he said.
An order from the Makati City Regional Trial Court, dated May 12, 2015, showed that the rehabilitation proceedings against Liberty were “closed and terminated” as its objectives have been successfully met.
“The exit from rehab paves the way for us to consider some of these options,” Bañas added.
Liberty has been cutting costs and its losses have been narrowing. In the first quarter of 2015, losses hit P210.16 million compared to P307.58 million in 2014.
Liberty’s core revenue, however, continues to fall. Total service revenue hit P42.17 million, down 46 percent in the first quarter of 2015, which it attributed to the lower average revenue per unit and a decline in subscribers. That drop was partly offset by a drop in rental income.
Liberty said expenses were likewise down due to a decline in business activity as it cut its workforce by 25 percent in the first quarter and reduced its leased sites late last year. Costs and expenses slid to P280.9 million from P323.38 million in the same period in 2014.
The company said that in the course of building its subscriber base, the group had incurred the losses, increasing its deficit to P10 billion as of March 31, 2015.
“Its major shareholders, however, remain fully committed to support the group’s operations, as clearly shown by the level of financial and operational support already provided,” Liberty said in its first quarter filing.
