MANILA, Philippines – The Philippine Long Distance Telephone Company (PLDT) has marked its highest capital spending budget this year as it sees the need to heavily expand its 3G and 4G coverage to defend its market share.
The Philippines’ second most valuable listed company sees its capital expenditures (capex) for this year possibly exceeding P40 billion ($887.05 million) to invest more in expanding its fiber footprint, LTE expansion, and network operational efficiency.
“[The capex could be a] little bit higher. We’re reviewing our capex. Our [initial] estimate was P39 billion. It might exceed P40 billion this year,” PLDT President and Chief Executive Officer Napoleon Nazareno told reporters on the sidelines of Tuesday, June 9.
PLDT Chairman Manuel Pangilinan earlier said that its initial estimated capex of P39 billion ($864.66 million) for 2015 will likely “lie north, as we accelerate the build-up of 3G and 4G as well as expand our transmission backbone.”
This year, according to Nazareno, would mark its highest capital spending budget since its establishment in 1928.
“The demand on data is really growing fast now, both mobile internet and fixed-internet are also moving very fast. The demand is increasing very much so we needed to program well in advance our capacity,” Nazareno said.
“Also the international cabling, because a lot of of our content is coming from the US,” he added.
Asked if PLDT expects higher capex in the coming year, Nazareno replied: “Most likely we will have an elevated capex also next year. Right now, we’re doing between 21% to 23% of revenues will be the level of capex within 2016.”
“Moving forward, maybe in 2017, it might go down. It depends on how the demand will evolve, but the data is really moving now because smartphone penetration has gone up,” Nazareno added.
PLDT reported a first-quarter core net profit of P9.3 billion ($208.57 million) – down 5% year-on-year but “on track” with the company’s guidance of P35 billion ($785.02 million) for 2015, Pangilinan said. – Rappler.com