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WiMAX start-up to invest PHP4.37bn on network rollout

21 May 2010

Filipino WiMAX start-up Schutzengel Telecom Inc (STI), which is believed to be backed by the religious sect Iglesia ni Cristo, has revealed plans to invest PHP4.37 billion (USD95.3 million) to roll out a nationwide wireless broadband network if it is given the go ahead from the regulator, the National Telecommunications Commission (NTC). Funding for the five-year CAPEX programme would be sourced from a mixture of internal and external resources such as an equity injection, supplier’s credits and other loans, the telco has informed the NTC. STI says it would need a minimum PHP28 million just to get the service off the ground, although its deployment schedule envisages a total spend of PHP2.3 billion in year one – including expenses related to marketing, subscriber acquisition costs (SAC), and other administrative outgoings. The group’s ongoing investment schedule – much of which is set aside for core network and base stations equipment – includes a year two CAPEX of PHP635 million, followed by PHP485 million in the third year, PHP452 million (year four) and PHPP410 million in the fifth year. STI says that as a result of the investment, it hopes to meet its target of 912,000 WiMAX broadband subscribers at the end of year five. It is also confident that it will have generated aggregated net income of PHP9 billion by the end of year five (with a first year net loss of PHP1.1 billion), with an average EBITDA margin of 60%. Total gross revenues are forecast to reach PHP22 billion by the end of the fifth year.

Philippines, Schutzengel Telecom Inc (STI)

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