Phillipines mobile providers return to growth

Mobile phone subscribers in the Philippines are increasing in numbers again after dropping in the second half of 2005, raising hopes that wireless services, the growth driver for the country’s profitable phone companies, still have room to expand.

The country’s two biggest phone companies – Philippine Long Distance Telephone and Globe Telecom – are winning back customers by offering low-cost products that give subscribers unlimited texting and calling privileges within a fixed period for a flat fee.

Wireless phone subscriptions, which had been growing rapidly since the mid-1990s, fell for the first time last year as PLDT and Globe found it harder to sign new users – they had withdrawn a marketing gimmick that gave customers free air time for switching from rival cellular companies.

Subscriber growth was also hit by tougher competition and rising consumer prices.

PLDT, the largest telecommunications company by sales, said it added 490,000 net subscribers in the quarter ending March 30, more than making up for the 400,000 customers lost in the July-December 2005 period. Its total subscriber base reached 20.9m by the end of March, growing for the first time since the second quarter of 2005.

Napoleon Nazareno, PLDT president, said the group, which accounts for 58 per cent of cellular phone subscribers, signed 740,000 additional customers in April.

The increase helped PLDT post a 2.4 per cent growth in revenue to 30.9bn pesos ($601m) during the quarter from a year ago. Net income, however, fell 7 per cent to 8.6bn pesos because of higher depreciation expenses and lower foreign exchange gains. It said core net income, adjusted for non-recurring gains and losses, went up 15.7 per cent to 7.6bn pesos.

Globe Telecom, the second largest phone company, with a 36 per cent market share, reported a 794,000 increase in mobile phone customers during the quarter after losing more than 1.2m subscribers in the second half of 2005.

The company’s mobile phone customers grew to 13.2m by the end of March from 12.4m three months before. It said first quarter revenue rose 5 per cent to 14.2bn pesos while net income went up 19 per cent to 3.5bn pesos.

“We are delighted by the market’s response to our initiatives and are encouraged by the results of the first quarter,” said Gerardo Ablaza, president of Globe Telecom on Tuesday.