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Liberty posts widening Q3 losses on higher OPEX

21 Nov 2011

Liberty Telecom, the holding company of Filipino WiMAX operator Wi-tribe Telecoms Inc, has posted a 26.2% rise in net losses for the three months to 30 September 2011, driven by higher operating expenses as it raced to sign up new subscribers. The telco booked a net loss of PHP415.91 million (USD9.61 million) in the period under review, up from a loss of PHP329.62 million in 3Q10. The latest results increased the operator’s year-to-date losses to PHP1.13 billion, compared to PHP741 million in the first nine months last year. Liberty Telecom attributed the increased losses to rising selling expenses, higher salaries and network-related expenses. For example, Liberty booked a 71% year-on-year rise in costs and expenses to PHP1.48 billion in 9M11, as it built out its network and spent on advertising to sign up new users. The Manila Times quotes Liberty’s Paul Bernard Causon as saying: ‘The telecom business requires huge infrastructure investments that cannot be recouped overnight. We are still in the process of building our customer base but we are committed to making the necessary investments as the need arises because we intend to be a serious contender in this business.’

Justifying its investment, Liberty booked a near-tripling of revenue in 9M11 to PHP389 million from PHP112 million, fuelled by an increase in post-paid Wi-tribe subscribers. The operation is a partnership between San Miguel Corporation and Qatar Telecom and claims to offer the country’s only pure 4G broadband internet service. Wi-tribe recently launched a ‘Tri-speed Pure 4G ‘ pre-paid stick, which allows subscribers to switch connection speeds all in one device. With its new pre-paid offering, the company is confident that it would meet its target of signing up 100,000 subscribers by the end of the year. Furthermore, as part of its revised rehabilitation plan, Liberty Telecom plans to spend PHP7.15 billion over ten years to turn the company around. Of this figure, PHP4.53 billion is ring-fenced for network CAPEX, PHP367.7 million for short-term loan payments, PHP361.8 million for long-term loans and PHP336.2 million for other liabilities.

Philippines, Liberty Telecoms Holdings (Tori Spectrum, formerly Wi-Tribe)

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