Saturday, April 22, 2006

PLDT cuts landline service charges

By DARWIN G. AMOJELAR, The Manila Times Reporter

Philippine Long Distance Telephone Co. (PLDT) cut service charges to its fixed line subscribers due to the strength of the peso vis-à-vis the dollar.

In a filing with the National Telecommunications Commission, Fernando M. Sobierra, PLDT counsel, said the country’s largest telco will implement a 6-percent downward adjustment on its local service rates in April owing to an increase in its currency exchange rate adjustment (CERA).

As of April, the dollar cost PLDT some P51.10 against the base rate of P11 in 1983.

The telco plans to charge residential subscribers for P639.97 a month from P677.41 at present. Business subscribers will be charged P1,304.10 from the current P1,382.34.

The company’s subsidiary Republic Telephone Co. (Retelco) also reduced service rates to provincial subscribers.

Earlier, rival Innove Communications Inc., the wireline subsidiary of Globe Telecom Inc. cut its landline service charges by 273 percent owing to the peso’s appreciation. Pilipino Telephone Corp. (Piltel), a unit of PLDT also lowered CERA rates by 13 percent on the guiding rate of P51.60 in Olongapo and Subic in Zambales, Masbate, Boac and Mogpog in Marinduque, General Santos City, and Digos in Davao del Sur.

PLDT said pursuant to the currency adjustment provisions, the telco may increase or decrease its local service rates by 1 percent for every 10-centavo upward or downward change in the peso vis-à-vis the dollar.

Earlier, Manuel V. Pangilinan, PLDT chairman, said earnings are expected to grow this year as a result of the peso’s appreciation, a turnaround from the bearish sentiment the executive held months before due to a maturing mobile service market.

He said in 2005 the company enjoyed P45 billion in foreign exchange gains on the local currency’s strength.

In 2005 PLDT posted a consolidated net profit of P34.1 billion or 22 percent higher than in 2004.

The company said it benefited from the recognition of foreign exchange gains and certain deferred tax assets, including a P4.4 billion gain realized from the Piltel’s debt exchange transaction.

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