Strong peso hurts PLDT
Long distance revenue is hurt by the strong peso. Photo by Aya Lowe/Rappler
MANILA, Philippines – Philippine Long Distance Telephone Co. (PLDT) officials blamed a strong peso for the decline in service revenues from incoming long distance calls.
Speaking at the first quarter annual results briefing on Tuesday, May 7, PLDT officials said revenues from national long distance, international long distance and cellular international voice fell 9% to P6.6 billion in the first quarter of 2013.
"As we have seen in the past few years, our service revenue levels are challenged by an evolving revenue mix. While voice and SMS (text) revenues were relatively stable, both international and national long distance revenues continued their decline, accelerated by the continued strength of the Peso," said PLDT chairman Manuel V. Pangilinan.
These long-distance services accounted for 17% of total first quarter revenues, which reached P40 billion.
When asked if mobile and Internet-based applications that offer free calls and chats, like Skype and Viber, have contributed to the decline, PLDT president and CEO Napoleon Nazareno said the rise of these services is only a small reason for the decline.
“Skype and Viber are part of the reason why fixed line revenue is declining but more than half of the decline is due to the appreciating peso,” Nazareno explained.
The peso averaged P40.70 to $1 in the first quarter of the 2013, or 5% stronger than the P43.03 to $1 average in the same period in 2012.
Officials said it expected revenues to remain under pressure in the short-term.
"There will be less impact less in the second half of the year as “the impact of the peso will not be as significant,” said Pangilinan.
PLDT reported earning P9.2 billion net in the first quarter of 2013, 8% lower than the P10 billion income a year ago.
PLDT's core income reached P9.6 billion or 4% higher than the P9.2 billion recorded in the first quarter of 2012. This was boosted by cost cuts and growth in its broadband and data revenues. - Rappler.com
