Pulanco, Andre Miguel S.
TTH 4:10-5:40pm
BSA 4E
PLDT, the countrys largest telecommunications company, posted first quarter 2003 earnings that were
the highest in five years. Manuel V. Pangilinan has effectively steered Philippine Long Distance Telephone
Co. (PLDT) out of the doldrums and into the path of profitability. Pangilinans strategy is simple: Grow the
companys wireless business and strengthen its fixed-line business. And he believes that the first quarter
performance is a validation that the company is moving in the right direction.
Every year must be an improvement over the previous and this is not easy considering increased
competition in the wireless sector (with the entry of Gokongwei-owned Digitel into the mobile phone
service business) and no phenomenal growths seen in the landline business. PLDT focused further
reducing its debts as well as that of Smart, bringing down costs of manpower, and boosting free cash
levels further.
Marketing Strategy
PLDT myDSL, one of PLDTs successful product. It has been so deft and efficient that it has gobbled up 70
percent of the broadband Internet market in the country and is growing at 100 percent every year. It is
also now boldly pushing an aggressive advertising campaign highlighting achievers as positive role models
for the youth instead of hedonistic showbiz celebrities.
One corporate marketing strategy that should be commended and encouraged is the ongoing advertising
campaign of PLDT myDSL to promote its price-busting Plan 999 offer with wholesome and brainy young
achievers as endorsers.
Its massive billboard on Pioneer Street along EDSA features the winners of the 2005 Ten Outstanding
Students of the Philippines (TOSP) awarded by RFM boss Joey Concepcion. All of them are subscribers of
PLDT myDSL Plan 999 Bryan Albert T. Lim (University of the Philippines Visayas), Jeffrey P. Mora (Far
Eastern University), Beauregard Grant L. Cheng (De La Salle University), Joseph Patrick Echevarria (Ateneo
de Manila University), Mehlan R. Josol (University of Southern Mindanao), Anna Theresa L. Licaros
(University of the Philippines-Diliman), Kip F. Oebanda (San Beda College), Butch O. Saulon (University of
Nueva Caceres), Bryan M. Ty (Ateneo de Davao University), and Kiran Tina M. Vaswani (Ateneo de Manila
University).
PLDT myDSLs lowered its costs through the years. It was P2,500 per month in 2003, then P1,500 per
month at speed of only 128 kbps. At one time, they slashed their price to only P999 per month and tripled
the broadband speed to 384 kbps. Even for business packages, the rate is an affordable P3,000 per month
at higher committed speed of at least double the P999 Plan.
Pulanco, Andre Miguel S. TTH 4:10-5:40pm
BSA 4E
BUSINESS STRATEGIES (2006)
1. Build on our leading positions in the fixed line and wireless businesses.
We plan to build on our position as the leading provider of fixed line service in the Philippines by
continuing to launch new products and services to increase subscriber value and utilization of our existing
facilities and equipment at reduced cost. We plan to build on our position as the leading wireless service
provider in the Philippines by continuing to introduce new products and services to increase our
subscribers' use of our network for both voice and data, as well as their reliance on our services. We are
currently upgrading our fixed line facilities to a Next Generation Network, or NGN, and have rolled out a
3G network based on a wireless-code division multiple access, or W-CDMA, technology as well as
expanding our DSL and wireless broadband facilities. Our operating target is to continue growth in
profitability by increasing our revenues while controlling our costs.
2. Capitalize on our strength as an integrated provider of telecommunications services.
We offer the broadest range of telecommunications services among all operators in the Philippines.
We plan to capitalize on this position to maximize revenue opportunities by bundling and cross-selling our
products and services between voice and data, and fixed line and wireless and ICT. We are also lowering
our costs by integrating the operations of our different businesses.
3. Strengthen our leading position in the data market.
Leveraging on the inherent strength of our fixed line business, we are committed to further develop,
enhance and lead our fastest growing business segment data and other network services. Consistent
with our strategy of introducing innovative products and services using advanced technology, we have
launched various products and services that address different market needs.
4. Strengthen our financial position.
We are working to increase our cash flows available for debt reduction and dividends by containing
our operating costs and generating cash returns from our investments in subsidiaries. Since December
2002, Smart has been regularly paying dividends to PLDT to supplement PLDTs cash flows available for
debt reduction. The cash flows generated by our businesses have increased significantly in recent years
which have allowed us to substantially reduce our debts levels and also restore the payment of dividends
to our shareholders. In 2006, our debt was down to US$1.76 billion and paid common dividends
aggregating Php14,407 million. We expect that a greater proportion of our free cash flow in succeeding
years will be utilized for the payment of common dividends while continuing to service our maturing debt
obligations.
