Philippine Long Distance Profit Increases at Slowest Pace in Five Quarters

Philippine Long Distance Telephone Co., the nation’s largest company by market value, reported its slowest profit growth in five quarters as intensifying competition led it to offer cheaper calling packages.

Net income increased 1 percent to 10.3 billion pesos ($228 million) from 10.1 billion pesos a year earlier, the Manila- based company said in a statement today. Profit was in line with an estimate at CLSA Ltd.

Revenue fell for a third consecutive quarter as PLDT offered unlimited call and text packages for as low as 30 pesos a day to compete in a market where four out of five people already own a mobile phone. PLDT, as the phone operator is known, said the increased adoption of social-networking websites such as Facebook Inc.’s is also undermining demand for text-messaging services.

“The market is close to saturation so companies can’t grow anymore by just adding mobile-phone subscribers,” said Richard Laneda, an analyst at Manila-based CitisecOnline.com Inc. “Players have to cut prices and offer unlimited plans to protect their market share.”

Revenue fell 1 percent to 36.7 billion pesos, PLDT said. Still, PLDT gained 4 million new mobile subscribers in the first half, helping core profit, which strips out one-time gains or charges, increase 1 percent to 10.7 billion pesos, it said.

Growth in the mobile-phone business is facing challenges because of cheap plans and “competition from social networking,” the company said.

President Napoleon Nazareno said the PLDT’s average monthly phone bill fell 16 percent to 164 pesos in the first half.

PLDT, partly owned by Nippon Telegraph & Telephone Corp., advanced 0.4 percent to 2,440 pesos at the noon close of trading in Manila. Its nearest competitor, Globe Telecom Inc., which reports today, decreased 0.3 percent to 879 pesos.

To contact the reporter on this story: Cecilia Yap in Manila at cyap19@bloomberg.net; Clarissa Batino at cbatino@bloomberg.net

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