PLDT may bid for gov’t TV station
() - March 3, 2006 - 12:00am
After posting a record P34-billion net income this year, telecommunications giant Philippine Long Distance Telephone Co. (PLDT) said it is now ready to look into new areas of expansion, including the acquisition of local television stations.

PLDT group chairman Manuel V. Pangilinan disclosed that the company may buy one of the two TV stations that the government will put up for sale. "We have been invited to look at these opportunities and we’re looking at it. But I don’t think we have made any decision to take the plunge," he said in a television interview over ABS-CBN.

The government has said in December that TV stations Radio Philippines Network (RPN) and International Broadcasting Corp. (IBC) are among the assets it will sell this year to help end a string of budget deficits that tripled debt to P3.95 trillion in the past eight years. These two stations were seized by the government in 1986 from associates of former President Ferdinand Marcos following his ouster that year.

Radio Philippines operates RPN-9 in Manila, one of seven TV stations the network owns nationwide. The company also owns 14 radio stations. The government controls 72.4 percent of the network, which was previously estimated to be worth about P1.3 billion.

PLDT is looking at other revenue sources as it expects earnings growth to slow this year at its mobile phone units, which account for more than half its sales.

Expecting a more challenging operating environment this year, Pangilinan has said that they have chosen to take a prudent view of 2006 prospects. "Growth in core earnings will be benign as revenue growth moderates. Cash flows will remain robust despite higher capital expenditures. We will still aim to increase shareholder returns by raising dividends to at least 50 percent of 2006 earnings and continue strengthening our balance sheet by reducing debts by at least another $300 million. In effect, we anticipate 2006 to be a year of transition as we lay the groundwork for future growth before reaping the benefits in 2007 and onwards," Pangilinan said.

While refusing at this point to peg a definite figure in terms of earnings projections this year, he nevertheless sees earnings before tax posting a double digit growth compared to 2005.

Pangilinan said operating expense will grow but not double digit while revenue will grow more than the growth in expenses. PLDT likewise expects tax payments this year to more than double compared to last year, from P4.2 billion to P9.7 billion.

He expects future growth to come from "extracting more juice" from 2G by developing content and new products to increase usage, broadening market presence in the lower-income market for cellular, optimizing fixed line through new products and price plans to increase the number of subscribers, expanding the fixed line and DSL network facilities, rapidly building out wireless broadband WiFi/WiMax network to cover a major part of the national market, providing more affordable broadband pricing plans, increasing PC/laptop penetration through promotional offers, expanding internet cafes to increase broadband reach, and increasing availability of content to Internet and mobile subscribers.

But company sources said Pangilinan has never given up on his dream for PLDT to own a TV station. It earlier made a bid for ABC-5 but the owners found the offer too low. PLDT likewise abandoned a plan in 2001 to acquire a majority stake in GMA Network Inc. and when it was ready to go back to the negotiating table, the owners were no longer interested and decided to instead raise funds through an initial public offering (IPO) slated later this year.

"Our impression is that it requires a lot of investments in infrastructure. We’re not certain if it’s best to just buy the assets rather than the company itself, given the history of these companies,’’ Pangilinan said.

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