MANILA, JULY 22, 2006
(STAR) By Mary Ann Ll. Reyes - Officials of the country’s top mobile phone companies are predicting that nearly half of Filipinos would be owning and using mobile phones in the next 18 to 24 months.

In an interview, Globe president and chief executive officer Gerardo Ablaza said a 45 to 50 percent cellular penetration rate (which means that 45 to 50 percent of the Philippine population would own and use mobile phones) can be achieved in the next one-and-a-half to two years.

Cellular penetration rate as of end-March this year stood at a little over 40 percent. Globe had 13.2 million wireless subscribers as of the end of the first quarter of 2006 while market leader Smart Communications reported a cellular subscriber base of 20.9 million. Including Digitel Mobile’s two million subscribers, total Philippine mobile subscriber base reached 36.1 million as of end-March 2006.

For his part, Smart president and CEO Napoleon Nazareno projects mobile penetration rate to increase to about 42 to 43 percent by the end of the year.

Smart and Piltel increased their total cellular subscriber base by 491,000 to 20.9 million as of end-March this year. Smart recorded net additions of 117,000 subscribers while Talk ‘N Text added about 374,000 subscribers to end the first quarter this year with 15.4 million and five million subscribers, respectively.

"Viewed from the widening array of services that we now offer, Smart is no longer just a cellular company. On the one hand, we continue to build our 2G business through creative SMS and voice service packages that enable us to generate incremental revenues and at the same time further broaden our base in the large lower income segments of the cellular market," Nazareno said.

Looking at subscriber take up, Nazareno noted it was robust during the first three months. "In January and February, there was a slight increase in churn due to the clean-up of non revenue generating SIMs that spilled over from last year. In March, the take-up went up and churn normalized while the April net subscriber additions surpassed the first quarter net adds. The trend in April was sustained in May," he explained.

Meanwhile, Globe’s total wireless subscriber base reached 13.2 million at the end of the first three months of 2006, six percent higher than the previous quarter’s 12.4 million and two percent better than last year’s 12.9 million. Net additions of about 800,000 SIMs reflect a significant turnaround from the previous quarter’s net disconnections of about 6,000.

For its part, Gokongwei-controlled Digital Telecommunications Phils. Inc. (Digitel) has announced that it is expanding the capacity of its mobile wireless network to four million subscribers middle of this year, six million by year-end and 10 million by end of 2007. Sun Cellular currently has over two million subscribers, and company officials project this number to grow to at least four million subscribers by yearend.

Digitel vice-chairman James Go earlier said the company will continue to invest at least $200 million every year for the expansion of its wireless network and its foray into 3G. The funds will be sourced from export credit agencies as well as internally generated funds. Sun Cellular expects to have 2,200 cellsites by the first quarter of next year.

Go likewise disclosed that Digitel will go into 3G (third generation mobile communications technology) by the first half of next year, joining its rivals Smart and Globe to slug it out in this new arena.

He emphasized that the incremental investments for 3G will not be as huge as those spent by its rivals because Sun Cellular uses state-of-the-art technology which even at the beginning was already 3G-ready.

Digitel incurred a P1.76 billion loss last year mainly due to higher costs and expenses of P11.5 billion, a 27 percent increase from P9.1 billion in 2004, spent mostly for marketing, selling, cost of sales, network related expenses and depreciation of its mobile wireless business, company president Lance Gokongwei reported.

But company officials are confident that Digitel will be profitable starting next year due to increased subscriber base of its Sun Cellular cellular service brand.

Digitel’s consolidated operating revenues generated an overall increase of 45 percent, from P7.2 billion in 2004 to P10.5 billion in 2005, driven by a 96 percent revenue growth from the wireless business. Consolidated earnings before interests, taxes, depreciation and amortization (EBITDA) increased to P2.7 billion last year from P2.2 billion in 2004.

"Our company continues to evolve, to transform, and to grow. We have sought to keep pace with global technology. Our customers have told us to provide products that can truly make a difference and we are working hard to provide that. Our job now is to execute well to ensure that we transform the potential into reality," Gokongwei noted.


By Aurea Calica - Finance Secretary Margarito Teves still has full control and supervision over the Bureau of Customs (BOC) under the new memorandum order issued by President Arroyo, Malacañang clarified yesterday.

Presidential chief of staff Michael Defensor maintained Teves still has control over the Customs bureau even after the finance secretary’s father, Negros Oriental Rep. Herminio Teves, criticized the new memorandum order for clipping the powers and control of the finance chief over his subordinates.

The elder Teves said it would be better for his son to resign from the Cabinet following the new memorandum order.

"There was only a miscommunication. And maybe things were not explained to Rep. Teves," Defensor said.

He stressed Malacañang does not want to create a controversy involving the finance secretary since the move might be misinterpreted by investors and the stock market.

Defensor explained Administrative Order No. 133 which strengthened the powers of the finance secretary over the BOC was repealed for being redundant.

The AO 133, which was issued Dec. 27, 2005, gives the finance secretary the powers to reshuffle Customs officials, including political appointees.

But on July 4, Mrs. Arroyo issued AO 156 in repealing AO 133. Officials, however, gave no reason for the new memorandum in the repeal of AO 133.

Defensor said AO 133 was issued because Customs was at the time run by an acting commissioner.

He added Teves, under the new AO, could still reshuffle presidential appointees as he deemed appropriate.

Senior Deputy Executive Secretary Joaquin Lagonera said that despite the repeal of AO 133, the provisions of Section 703 of the Tariff and Customs Code are clear that the finance secretary has the power to reshuffle the BOC as he deems fit.

Under the Tariff and Customs Code, "the Commissioner of Customs may, with the approval of the Secretary of Finance, assign any employee of the Bureau of Customs... in accordance with the staffing pattern or organizational setup as may be prescribed the Commissioner of Customs with the approval of the Secretary of Finance."

The law also provided that such assignment shall not "affect the tenure of office of the employees nor result in the change of status, demotion in rank and or deduction in salary."

Lagonera explained the provisions of the Tariff and Customs Code will apply upon the repeal of AO 133.

He pointed out the law cannot be repealed by a mere executive issuance.

The elder Teves, however, claimed his son will still resign from the Cabinet.

"The clipping of the power of the finance secretary over the Bureau of Customs is an indication that the President has already lost her trust and the secretary of finance should not stay one minute longer in office," Teves told the weekly Balitaan sa Rembrandt Hotel forum in Quezon City.

Teves, acting chairman of the House committee on ways and means, said he has already convinced his son that resignation is the only option left for him following the repeal of AO 133.

"We are an independent personality and we can survive without any government employment," the Negros lawmaker said.

Teves said he could not comprehend why Malacañang leaked the repeal of AO 133 even after they had an understanding that it will not be implemented.

Teves said his son has done his job seriously as the head of the Land Bank and later as finance secretary and the apparent reward is the repeal of AO 133 that clipped his powers of supervision.

Adding insult to injury is the apparent leak by some Malacañang officials about the issuance, he said.

"There is something fishy on the publication of the report," Teves said. — With Perseus Echeminada

Chief News Editor: Sol Jose Vanzi

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