Digitel profit rose 65% in ’10 to P429M

MANILA, Philippines—Gokongwei-led Digitel Telecommunications Philippines Inc. grew its profit by two-thirds in 2010, bucking an industry trend of decline that has seen its competitors post lower earnings for the year.

The company, which operates mobile network Sun Cellular, said it posted a net income of P429.6 million last year, or 65 percent up from P259.7 million the previous year.

Consolidated revenue grew 18 percent year on year to P16.54 billion.

The increase was largely due to the significant revenue growth of 27.1 percent in the wireless segment, driven by the growth in subscribers.

“[This was] fueled by the introduction of more affordable and innovative products,” the company said in a disclosure.

However, wireline call revenues dropped by 9.7 percent due to lower international and domestic tolls and foreign-exchange movements.

This was partially offset by the growth of Suntel and ADSL products, which registered a 17 percent increase over the same period.

Wireline broadband service revenue amounted to P475.28 million in 2010, higher by 10.2 percent than 2009’s P431.1 million due to the increase in domestic data and Internet services.

Digitel’s report showed that it performed better than its bigger rivals Globe Telecom Inc. and Philippine Long Distance Telephone Co. (PLDT).

Last month, Globe Telecom reported a 22-percent decline in its 2010 net income to P9.74 billion, from P12.57 billion in 2009.

PLDT, meanwhile, said its profits grew by just 1 percent to P40.2 billion from P39.8 billion in 2009.

Both Globe and PLDT’s finances have been under pressure due to stiffer competition in the industry and the prevalence of unlimited and “bucket-priced” promo offers pioneered by Sun Cellular.

Sun Cellular is currently the smallest of the three rival companies with around 15 million. Leading the industry is PLDT with 45 million users, followed by Globe, which has a base of over 25 million subscribers.