As telco battle shifts to fixed lines
MANILA, Philippines, November 21, 2016– Bucking global trends, PLDT’s consumer fixed line and enterprise businesses are driving revenue growth for the country’s leading telecoms service provider as its mobile phone business transitions from voice and text messaging to data and digital services.
PLDT service revenues from the fixed line business increased by 7% to P46.8 billion in the first nine months of the year compared to the previous year, amid strong growth in its home and enterprise businesses, while most telcos around the world have been posting declines in their fixed line units.
“The battleground has shifted from wireless to fixed. And that plays to our strength because we have the most extensive fixed network infrastructure. We are for example aggressively bringing fiber to the home (FTTH), which today can already reach 2.5 million homes in different parts of the country,” PLDT Chairman and CEO Manuel V. Pangilinan said.
Last week, PLDT reported that its consumer fixed line business unit, PLDT Home, generated P24.5 billion in revenues in the first nine months of this year, up 9% from the same period last year.
Similarly, its Enterprise Business unit grew revenues by 10% to P24.4 billion. This is in stark contrast to many countries where the fixed line business is either stagnating or declining.
“We are building on the significant competitive advantages that these two business units enjoy. PLDT Home is already far ahead in the deployment of fixed line networks, particularly in fiber-to-the-home (FTTH), which is the cutting-edge technology for fixed line services. But we are not stopping there. We are speeding up the deployment of FTTH in more areas of the country,” said PLDT Chief Revenue Officer Ernesto R. Alberto.
“Our Enterprise Group, on the other hand, has established extensive partnerships among the country’s leading companies. We are intensifying our efforts to serve both large and small businesses through innovative digital solutions that boost their productivity and competitiveness,” he added.
In both cases, revenues are growing on the back of data services and digital solutions.For PLDT Home, data connectivity revenues rose 11% while digital services (for entertainment and home security) jumped 25%. In the case of the Enterprise Group, corporate data, enterprise wireless and ICT services all grew at double-digit rates – 15%, 15% and 12%, respectively.
“These businesses have stayed on the growth path despite stiff competition because these had already made the difficult transition from relying on traditional revenue sources like voice toll services to data connectivity and digital services,” Alberto pointed out.
Data and broadband services, for example, already account for 59% of PLDT’s fixed line revenues, up from 57% in the first nine months of 2015.
“Moving forward, we are promoting the increased adoption of digital services such as entertainment via partnerships with leading content providers like iflix, Fox, Cignal and I WantTv, and e-commerce with Amazon and PayMaya,” said Oscar A. Reyes, Jr., PLDT FVP and Head of Home Operations.
As part of this thrust, PLDT has launched more affordable and power data plans such as the Plan 1899 for the HomeFibrservice which offers speeds of up to 50 Mbps.
PLDT’s mobile phone businesses are still making that transition. In the first nine months of 2016, the share of data and digital services in total revenues of Smart and Sun rose to 30%, up from 23% in the prior year.
However, SMS and voice revenues declined due to stiff competition and the ongoing consumer shift to data-based messaging services. As a result, mobile phone revenues of Smart and Sun declined 5% to P58.4 billion.
Further growth in PLDT Home and Enterprise is now being supported by PLDT’s expanded digital infrastructure.PLDT now has over 140,000 kilometers of fiber optic cables, the most extensive fiber network in the country.
As a result, the company’sPLDT Home Fibrservice now passes 2.5 million homes in about 3,000 locations in different parts of the country. These include areas such as the cities of Laoag, Baguio and Tuguegarao in the far North down to the cities of Davao, General Santos, Koronadal and Zamboanga in the deep South.
In the case of the Enterprise Group, it has bolstered its advantage in providing cloud-based digital solutions to companies by building nine data centers in different parts of the country. By mid-2017, PLDT will have 10 data centers with a total rack capacity of over 9,000 racks – the largest data center network in the country.
"The continued growth of the Enterprise Business has largely been driven by our people. We started our transformation journey over four years ago, moving beyond just telco services to enterprise solutions,” PLDT FVP and Head of Enterprise Jovy Hernandez said.
"We aspire to be a true partner to our customers - enabling their businesses with relevant solutions - rather than just mere suppliers of bandwidth and pipes. It's a business of trust and at the center of that are the relationships we've nurtured over the years enabled not only by technology but by our people," he added.
