Saturated mobile market in the Philippines impacts Q2 profits

Saturated mobile market in the Philippines impacts Q2 profits

Two of the leading telecoms companies in the Philippines have posted a decline in net profit during 2012.

Philippine Long Distance Telephone Co (PLDT), which is owned by Hong Kong's First Pacific Co Ltd, Japan's NTT Communications and NTT DoCoMo, has revealed an 11% drop in its second quarter profit.

PLDT’s rival Globe Telecom, which is owned by Ayala Corp and Singapore Telecommunications, experienced a 10% drop in its first half net profits.

The declines can be attributed to fiercer competition in the Filipino market, with the country’s mobile segment expected to breach 100% penetration by the end of 2012. At the end of June, PLDT recorded 67.4 million mobile subscribers, compared to Globe’s 31.7 million.

Both companies have also been involved with costly network upgrades. Globe began its $790 million network upgrade at the end of 2011, which is expected to be completed within 36 months.

PLDT expects its core profit to return to growth next year after it too completes its network modernisation programme. The company is also said to be pinning hopes on growing its broadband services to offset the slowdown in the country’s mobile sector.

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