January 05, 2015

PLDT extends free internet promo

In its statements to the press, PLDT said it has extended by the month its promotional offer of free internet usage of up to 30MB/day to its mobile subscribers. The company noted the positive response to the promo which was launched in late September last year and the extension of the promotional campaign was meant to hook more users. It also noted that more Filipinos acquired internet-enabled smartphones late last year due to increasing affordability of these handsets.

Our take: About 30% of PLDT’s mobile subscribers own smartphones but only about a third of these use mobile internet thus the promotional offer to entice subscribers to use the service. While the PLDT spokesperson highlighted that the company has enough capacity to accommodate any surge in data this year, the company has increased its capex spending to P34.5b for 2014 and can remain elevated until next year.

If the company succeeds in beefing up mobile internet usage, this can expand its revenue base and promote network utilization efficiency in the long run. Pending any positive results from the campaign, concerns remain regarding the company’s capability to sustain its hefty dividend payout given the rising capex and potential near-term impact to margins of the aggressive marketing efforts. – WealthSec