The country’s two telecommunication services providers announced mixed earnings results for the first half of 2015, while underscoring the expanding role Internet usage was playing on their bottomlines and the services they offer.
Philippine Long Distance Telephone Co., the country’s biggest telecommunications company, said core profit in the first six months of 2015 was down 5 percent to P18.9 billion while consolidated service revenue dipped 2 percent to P81.2 billion.
Competitor Globe Telecom, a unit of the Ayala Group, reported record earnings for the period covered, saying that its core profit rose by 14 percent to P8.6 billion while service revenue increased by 13 percent to P53.8 billion.
Both companies highlighted the bigger impact data related services were having on earnings, driven by the growing use of smartphones and popular social media websites.
PLDT said its total broadband subscribers hit 4.9 million, with total revenue contribution from broadband, data and Internet services hitting P23 billion for the period, up 13 percent year on year.
Globe said its mobile data revenue hit P9.5 billion as of the end of June, up by 53 percent compared to the level in the same period last year. Its broadband revenue stood at P7.6 billion.
Globe added that it had about 3.5 million broadband subscribers by the end of the first half.
Addressing declining earnings, PLDT chair Manuel V. Pangilinan cited risks to their business, including toll earnings, which could fall by P4 billion to P5 billion in terms of revenue this year, and its wireless prepaid business.
He said steps were being taken to mitigate the decline, while capitalizing on increasing demand for high-speed Internet services. The impact of these measures, however, will be felt only by 2016.
“I must say we have fallen off the saddle and it is fully our intention to climb back on that saddle and ride on it,” Pangilinan said during the company’s briefing, hinting at further changes on the company’s management structure.
He said PLDT was keeping its yearend core profit target of P35 billion while increasing capital spending in 2015 to P43 billion from P39 billion, mainly to upgrade its data network.
Globe chief financial officer Alberto de Larrazabal on Tuesday said the telco expected its growth trajectory to continue, noting that data would be an even larger contributor in the “coming years.”
“Our data revenue exceeded our expectations, maintaining its robust double digit growth during the first half of the year,” Globe CEO Ernest Cu said in a statement.
“Amidst the heightened level of competition, Globe soared to new record levels in terms of service revenues, Ebitda, net income and core net income,” he added.