Philippine operators PLDT and Globe Telecom reported declining profits in the first quarter, due to huge capex costs from their respective network modernization projects.
But both PLDT – which owns Smart Telecom and controls Digitel with its Sun Cellular brand - and Globe reported increased revenues for the three months to March.
Incumbent PLDT’s core net income fell by 12% to 9.3 billion pesos ($220 million) in the first quarter. On the other hand, consolidated service revenues grew 13% to 42.8 billion pesos ($1 billion).
PLDT said the first quarter results showed the full consolidation of the operating performance of Digitel, a former rival of Smart PLDT gained control of last year.
With the addition of Sun Cellular, PLDT's wireless service revenues rose by 15% during the quarter. If this was excluded, wireless revenues would have fallen by 4%.
“Our first quarter results are in line with our expectations that industry stability would return in gradual but quite certain terms,” PLDT chair Manuel V. Pangilinan said. “As we continue the complex task of integrating Digitel/Sun Cellular into the PLDT Group, we are heartened by the opportunities for both synergy and growth we see arising.”
Pangilinan added that, in the meantime, PLDT is pursuing further rationalization measures “that may be somewhat adverse in the short-term but should produce sustainable, longer-term benefits.”
PLDT’s capex this year is focused on, among others, completion of the core network upgrade for its mobile network, completion of the migration to NGN on its first network, and group-wide optimization of IT systems.
Meanwhile, Globe’s core net income decreased by 7% to 2.7 billion pesos ($64 million). However, service revenues were up by 6% to 16.6 billion ($392 million). In particular, Globe’s noted that its post-paid business kept its growth momentum, particularly with the success of Apple iPhone 4S launch.