"To return PLDT, and indeed the entire industry, to the path of growth, we cannot be doing more of the same, we have to change the game," Manuel V. Pangilinan, PLDT chairman, said at the recent PLDT annual stockholders meeting.
On Tuesday, the shareholders owning 80.2 percent of the firm’s outstanding common stock voted to approve the issuance of up to 29,654,378 shares of common stock priced at P2,500 per share as payment for the ownership interest in Digitel of JG Summit Holdings and certain other parties.
"We have indeed changed the game with the announcement last March of our plans to invest in Digitel," Pangilinan said.
A two-thirds vote of outstanding shares was required to approve the move.
"The vote demonstrates the strong support that the Digitel investment enjoys among PLDT shareholders. This transaction will indeed benefit PLDT’s shareholders, PLDT’s and Sun’s subscribers and the general public in the form of improved telecom services utilizing the combined resources of PLDT and Digitel," said Pangilinan.
"The combined networks will result in the accelerated rollout of new technologies such as 4G or long-term evolution. Sun subscribers will share in the benefits of 4G/LTE earlier than planned," said Pangilinan.
Pangilinan said the company needs to change business direction as the new investment cycle for telcos worldwide, where revenues are declining and capex requirements rising, has arrived.
"This pressure on revenues has come largely from the continuing shift to bucket and unlimited pricing plans for voice, texting and for broadband internet services as well. It has also come from the rising popularity of online services such as social networking like Facebook and Twitter and voices over IP services " Pangilinan said.
"The forces of change within telco industry here and abroad have been gathering momentum for many years now. These have already started to disrupt the legacy business models and reshape business," he said.
Napoleon Nazareno, PLDT president and chief executive, said in setting a new business direction, the PLDT board has taken into account the significant and unpredictable shifts in technologies, consumer tastes, and market conditions that are changing the nature of telecom business.
"In our view, the way forward is to pursue a two-pronged strategy. First, we are pushing convergence aggressively within the PLDT Group. Second, we are undertaking a game-changing investment in Digitel," Nazareno said.
"We have to organize a new business unit within the group dedicated to serving the home market. Along this are three other verticals: the enterprise, international and individual consumer market," he added.
"We are undertaking a massive modernization program of our mobile and fixed networks. For the next two years, we have committed a total of P 67 billion to expand and upgrade the core, access and backroom support elements of our network", Nazareno said.
On the broadband business, Nazareno said the combined subscriber base crossed the 2 million mark at the end of last year and was over 2.1 million at the end of April this year.
"Broadband is the new arena where telcos are engaged in combat. Success requires a superior network because subscribers expect speed, reliability, capacity and better customer services," he said.
