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Digitel’s 1H earnings show reduced net loss on mobile gains

17 Aug 2009

Filipino telecoms operator Digital Telecommunications Philippines Inc (Digitel), the listed telecoms arm of local conglomerate JG Summit Inc, reported a net loss of PHP638 million (USD13.22 million) in the six months ended 30 June 2009, compared to a loss of PHP2.04 billion in 1H08, and attributed the results to a stronger performance from its Sun Cellular wireless unit. Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased to PHP2.13 billion from PHP1.32 billion a year ago, largely the result of higher service and non-service revenues generated by the mobile arm. On a less positive note, operating costs climbed 26.7% year-on-year to PHP4.56 billion, as a result of the higher cost of sales, network-related expenses and general and administrative expenses, it said. First-half revenues totalled PHP6.7 billion, up 35.9% from PHP5 billion a year ago – of which Sun Cellular contributed 71% on the back of annual growth of 62.4% at the operation. Digitel’s Sun Cellular brand is championing its unlimited call and text messaging services which accounted for 66.1% of wireless revenues in the period under review, up from 61.9% in 1H08. The operator says it enjoyed continued success of unlimited services such as its ‘24/7 Call & Text Unlimited’ and ‘Text Unlimited’ offers, and also an increased subscriber count from the ‘Group Plans’ and ‘Plan 350’ products. In 2008, Sun Cellular further widened its mobile services portfolio by launching 3.5G HSPA (High Speed Packet Access) technology and an all-IP network under the Sun Broadband Wireless banner.

On the downside, Digitel said turnover from wireline voice and data services dipped from PHP1.83 billion to PHP1.70 billion over the same period due to lower international and domestic tolls. The growth of ADSL sales provided a cushion to the reduced international and domestic telephony business, registering an increase of 38% compared to same period last year.

Philippines, Digital Telecommunications (Digitel)

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