Philippine Telephone Revamps for Data Push as its Revenue Falls

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Philippine Long Distance Telephone Co. has hired top executives and expanded the roles of some existing ones in a revamp designed to boost data revenue as subscribers increasingly turn to Facebook Inc. and Viber for calls and messages.

The carrier appointed Winston Damarillo, founding partner at Global Gateway Venture Capital, as chief strategy officer, according to a statement in Manila on Tuesday. It may spend more than 39 billion pesos ($875 million) this year as the company puts in place infrastructure to provide a “digital spine,” Chairman Manuel Pangilinan said at a press conference after reporting that first-quarter profit was little changed.

Pangilinan said the carrier has to prepare itself as customers increasingly use the Web for shopping and entertainment on their mobile devices. The Philippines’ largest telecommunications company posted its first drop in revenue in 13 quarters, while operating profit margin narrowed from the year-earlier period.

“Either we pivot or we perish,” Pangilinan said. “It’s very clear that we can’t think and behave like a telco of the past.”

The carrier also named former Tele2 AB executive vice president Joachim Horn as chief technology and integration adviser. He will take charge in July.

Isaias Fermin, who has headed PLDT Home, has been given charge of the entire consumer business, while Orlando Vea has been named chief executive officer of Voyager Innovations, which offers remittance and e-commerce services. Vea was chief wireless adviser of the Smart Communications Inc. unit.

Earnings Guidance

Net income was little changed at 9.39 billion pesos in the three months ended March. Service revenue fell 2 percent to 40.5 billion pesos as earnings from mobile-phone calls and text messages, which account for 60 percent of the total, declined.

The first-quarter performance puts the carrier “on track if not ahead” to meet its 35 billion-peso guidance for this year’s core profit, which excludes non-recurring items and is used in computing dividend, Pangilinan said. The company in March cut its core profit outlook by 6.4 percent from 37.4 billion pesos last year.

Shares of the company rose 1.6 percent to close at 2,884 pesos in Manila trading. The benchmark Philippine stock index climbed 1.3 percent.

The carrier offered free Internet from September through February, attracting six million subscribers, about 70 percent of whom previously had not accessed data services. It had about 73 million wireless subscribers.