JUNE 5, 2006 (STAR) By Mary Ann Ll. Reyes - Telecommunications giant Philippine Long Distance Telephone Co. (PLDT) projects its broadband subscriber base to double this year as both digital subscriber line (DSL) and wireless broadband coverage rapidly expand.

Over the next four to five years, fixed and wireless broadband are expected to account for 10 to 15 percent of revenues, PLDT group chairman Manuel Pangilinan projected. At present, they account for less than 10 percent of revenues.

PLDT president and chief executive officer Napoleon Nazareno disclosed that DSL (fixed broadband) and wireless broadband subscribers increased by over 25,000 in the first quarter of 2006 to about 140,000 as of the end of March this year. Of the 140,000, about 101,000 are fixed DSL while 39,000 are wireless (Smart Bro). During the first quarter of 2005, broadband subscribers only totalled 57,000, all fixed.

As of end-April, the number of subscribers has increased to 170,000, of which 130,000 are DSL and 40,000 are wireless.

Nazareno said the potential market for broadband services include approximately one million dial-up Internet subscribers in the country today. PLDT itself has 420,000 dial-up Internet subscribers under Vibe.

During the first quarter of 2006, the PLDT group invested around P4.9 nillion, P2.5 billion of which was spent for the wireless business (specifically Smart’s venture into 3G) and the rest for the fixed line business, mainly for the upgrade of the legacy fixed line copper network to the next generation network (NGN) as well as for wireless broadband rollout. Full year capital expenditure for the group is estimated at P18 billion, half of which will be for fixed and the rest for wireless.

Nazareno explained that NGN is necessary to service the new communications environment as it will allow for convergence of voice, video and data and make broadband an inherent capability. As of end-March this year, around 65,000 broadband-enable fixed lines have been installed.

Smart’s wireless broadband service was reintroduced in April 2006 as Smart Bro, an improved service over its earlier Smart Wi-fi offering. Smart now has over 2,000 wireless broadband-enabled base stations providing high-speed Internet access to 386 cities and municipalities all over the country.

He emphasized that the fixed line business continues to hold steady even as the company embarks on the NGN roll-out and as it pursues the growth of the broadband business on a parallel path with broadbanding the wireless business.

PLDT’s fixed line revenues increased three percent year-on-year to P12.1 billion as of March 31, 2006 mainly due to an increase in data revenues which more than offset delines in LEC (local exchange) and ILD (international) revenues.

For his part, Pangilinan stressed that 2006 will be a year to lay the foundation for earnings growth in 2007 and onwards. "NGN upgrade and wireless broadband rollout will enable growth in broadband/data revenues," he said.

Market seen going into consolidation phase By Zinnia B. Dela Peña The Philippine Star 06/05/2006

The stockmarket is expected to go into consolidation mode this week after the Bangko Sentral ng Pilipinas (BSP) decided against raising its key interest rates, analysts said.

The BSP kept its key interest rates unchanged for another month as it expects inflationary pressures to ease in the second half.

"The market is expected to remain in a range trading mode in the short term. Although corporate long term fundamentals remain solid, the market is quite jittery in the short term. Since the main index soared above 2,600 last month, traders have been quick to react and take profits on any negative news that come out. The macro economic picture have been mixed with market players worried about higher interest rates and rising inflation," AB Capital Securities said in its report.

Last week, the PSEi gained 3.78 points or 0.16 percent to 2,304.17. Average trading volume slipped to 1.47 billion shares while average daily value rose to P2.25 billion from P2.01 billion the previous week.

After breaching a major resistance at 2,300 points, the main index’s next target is 2,380, AB Capital said.

Analysts said the continued rise of oil prices abroad and weakening of the peso against the dollar may dampen investor sentiment.

Continued global concerns on emerging markets and expectations of further tightening in the US contributed to the weakening currency as the peso touched P52.98:$1 last Thursday. This is the lowest level seen for the local currency since January of this year. Since the interest rate contagion, the peso has lost 2.7 percent from its level of P51.526 three weeks ago.

AB Capital said there is growing pressure on domestic interest rates as indications point towards some disappointments in the government’s tax collection efforts.

Chief News Editor: Sol Jose Vanzi

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