Telcos will continue growth next year but with lesser yields

THE lucrative telecommunications industry will continue to experience a rise in traffic volume in 2011, although yields will decline, as network operators offer bucket pricing and unlimited pricing schemes, the president of the Philippine Long Distance Telephone Co. (PLDT) said last week.

“It will still be good. Volume will rise, but the yields will go down. So revenue-wise, it will still be a single-digit growth for the cellular companies,” said Napoleon Nazareno.

The phone giant handled over a billion text messages and more than 100 million minutes of calls every day for the past six months. But text revenues declined by 14 percent, despite increasing volumes.

For PLDT, text volumes and voice minutes from January to June this year were higher by 27 percent and 279 percent year-on-year. However, yields have declined to P0.12 per text and P1.25 per minute of voice on higher traffic volumes.

The average price per text is now down to P0.12 and the lowest price for bucket pricing is down to P0.04 per text. Close to 90 percent to 95 percent of the text messages processed by PLDT’s cellular network, which registered 45.3 million wireless subscribers in the first six months of the year, today are enrolled in various unlimited offers.

“We’ve had some election-related churn in subscriber numbers but that is a one-time churn rate,” said the PLDT president.

PLDT is set to release its third-quarter figures on November 4. The company’s chairman, Manuel Pangilinan, had said third-quarter net profit was better than its profit a year earlier.

‘‘It’s better than last year,’’ Pangilinan said.

The PLDT group’s second-quarter profit was P10.26 billion, up 1 percent from a year earlier. Its first-half net income, meanwhile, stood at P21.7 billion, from P19.7 billion in the same period last year.

This year the PLDT group may see service revenues growing by 2 percent, from P145.6 billion in 2009. Its core net income for 2010 is expected to be slightly higher than the P41 billion in 2009 resulting from the increase in revenues, the contribution from its investment in Meralco and lower income-tax provision.

The group has set a profit guidance in excess of P41 billion this year. Nazareno said PLDT is “on track to achieving that number.”

PLDT, which is owned by Hong Kong’s First Pacific Co. Ltd. and Japan’s NTT Communications and NTT DoCoMo, sees growth in the broadband space amid a maturing core market.

“Broadband remains to be in robust growth. It will grow by 20 percent to 25 percent more,” added Nazareno.

Growth in broadband revenues account for 11 percent of the PLDT group’s total revenues as of end-June, compared with 9 percent for the same period last year.

The volume of broadband will propel growth and hopefully offset the declining text-messaging revenues, Nazareno said. –Lenie Lectura / Reporter, Businessmirror