Metro Pacific Investments is very hard on journalists in the Philippines that get information incorrect, but even TD Ameritrade and Reuters believes that they are incorporated in Hong Kong. You may visit http://www.firstpacco.com and look at the press releases and will find the Bermuda LLC in very small print.
Mr. Manuel V. Pangilinan (aka MVP), served as CEO & President of PLDT (NYSE: PHI) (PSE: TEL) until his "appointment" as Chairman of the Board of Directors and Chairman of the committees which nominate all directors including "independent" directors to the PLDT Board. Pangilinan also took the role as Chairman of PLDT's Corporate Governance Committee, winning awards due to the repeated statements from 2004-present that he is on the ultra-exclusive Board of Overseers for The Wharton School of Finance at University of Pennsylvania, when the Board administrator, found that Pangilinan spoke to the Board and was disturbed that he was using The Wharton School logo for events where he spoke to possible investors in the United States in summer 2008. This is one of many "oversights" or cover-ups by Manuel Velez Pangilinan and Board members of PLDT and First Pacific Company Limited (0142.HK) (OTC: FPAFY) which is mentioned as main owners of PLDT shares. The Chairman of First Pacific is Henri Salim of PLDT, Smart Communications, Inc., Piltel, Metro Pacific Corporation (PSE: MPC) and Metro Pacific Investments Corporation (PSE: MPI).
This is taken directly from the NYSE Arca 2003 Annual Report regarding PLDT (NYSE: PHI) (PSE: TEL) ownership. According to the Philippine Constitution, Filipinos must own 60% of utilities like PLDT. How is that possible as the PLDT Board and Sycip Gorres Velayo & Company Ernst & Young admits that First Pacific and NTT owns more than 40%, and they are both foreign companies?
"Our two largest shareholders are First Pacific, a Hong Kong-based investment and management company engaged in consumer, telecommunications and property businesses, which, through its Philippine and other affiliates, beneficially owns 31.4% of our common shares, and NTT Communications, a wholly-owned subsidiary of Nippon Telegraph and Telephone Corporation of Japan, which beneficially owns 14.9% of our common shares.
PLDT and the following subsidiaries were all incorporated in the Philippines, except for PLDT Global, which was incorporated in the British Virgin Islands:
| Name of Subsidiary/Investee | Principal Activity | Percentage of Ownership | ||
| 2003 | 2002 | 2001 | ||
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| Wireless |
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| Smart and subsidiaries | Cellular mobile services | 100.0 | 100.0 | 100.0 |
| Telesat | Satellite communications services | 94.4 | 94.4 | 94.4 |
| ACeS Philippines | Satellite phone services | 93.7 | 93.7 | 93.7 |
| Mabuhay Satellite | Satellite communications services | 67.0 | 67.0 | 67.0 |
| Piltel and subsidiaries | Cellular mobile and telecommunications services | 45.3 | 45.3 | 45.3 |
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| Fixed Line |
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| Clark Telecom | Telecommunications services | 100.0 | 100.0 | 100.0 |
| Subic Telecom | Telecommunications services | 100.0 | 100.0 | 100.0 |
| Smart-NTT Multimedia, Inc. | Data and network services | 100.0 | 100.0 | 100.0 |
| PLDT Global and subsidiaries | Telecommunications services | 100.0 | 100.0 | 100.0 |
| PLDT-Maratel | Telecommunications services | 97.5 | 97.5 | 92.3 |
| BCC | Telecommunications, infrastructure and related value-added services | 75.0 | 37.5 | – |
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| Information and Communications Technology |
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| ePLDT and subsidiaries | Information and communications infrastructure for internet-based services, e-commerce, call centers and IT-related services | 100.0 | 100.0 | 100.0 |
Wireless
We provide cellular, satellite, VSAT and other services through our wireless business segment. Revenues from our wireless services accounted for 58% of our consolidated operating revenues for the year ended December 31, 2003.
Our cellular service (including handset sales), which accounted for about 99% of our wireless business revenues for the year ended December 31, 2003, is provided through Smart and Piltel. Smart is the leading cellular service provider in the Philippines, with approximately 10.1 million subscribers as of December 31, 2003, representing an estimated market share of approximately 46%. Piltel, a reseller of Smart's digital GSM capacity under its own branding and pricing strategy for voice and text messaging services, had approximately 2.9 million subscribers as of December 31, 2003, representing an estimated market share of 13%. In 2003, the combined number of Smart's and Piltel's subscribers (being served using Smart’s GSM network) increased by 51%, representing the largest increase in the number of cellular subscribers in absolute terms in that period among Philippine cellular providers. As of December 31, 2003, cellular penetration in the Philippines was approximately 27%, which was nearly seven times the country's fixed line penetration.
Smart's and Piltel's cellular subscriber gains were predominantly attributable to their respective prepaid GSM services, which were introduced in September 1999 and April 2000, respectively. Approximately 98% of Smart's cellular GSM subscribers were prepaid as of December 31, 2003. The predominance of prepaid service reflects one of the distinguishing characteristics of the Philippine cellular market. The growth in our prepaid service has enabled us to increase and broaden our subscriber base rapidly while controlling credit risk and reducing billing and administrative costs on a per-subscriber basis.
Our cellular subscriber growth has also been driven by text messaging service. Text messaging service is extremely popular in the Philippines, particularly on the prepaid platform, as it provides a convenient and inexpensive alternative to voice and e-mail based communications. During 2003, our text messaging service system handled 28,825 million outbound messages, an increase of 47% compared to 19,558 million outbound messages handled during 2002.
As of December 31, 2003, Smart's digital GSM network included 32 switching centers with a capacity of 14.3 million subscribers and 3,904 base stations covering 1,039 cities and municipalities. Piltel’s prepaid GSM service, Talk ‘N Text, is also supported on this network. In addition, Piltel had six active cell sites as of December 31, 2003.
Fixed Line
We are the leading fixed line operator in the Philippines and the only company providing fixed line telecommunications service throughout the country. Our fixed line business group offers local exchange, international long distance, national long distance, data and other network and miscellaneous services. As of December 31, 2003, we had approximately 2.1 million fixed lines in service. Revenues from our fixed line services accounted for 41% of our consolidated operating revenues for the year ended December 31, 2003.
We have a 5,400-kilometer long digital fiber optic backbone, which is supported by an extensive digital microwave backbone. Our fixed line network reaches all of the major cities and municipalities in the Philippines, with a concentration in the Metropolitan Manila area. Our network offers the country’s most extensive connections to international networks through three international gateway switching exchanges, satellite systems and various regional submarine cable systems in which we have interests.
Information and Communications Technology
Through our wholly-owned subsidiary, ePLDT, we provide broad-based integrated information and communications, or ICT, services focusing on infrastructure and solutions for internet applications, internet protocol-based solutions and multimedia content delivery. Incorporated in August 2000, ePLDT started commercial operations in February 2001. ePLDT's principal activities are the operation of an internet data center under the brand name Vitro™, call center businesses and Infocom, an ISP.
ePLDT has also invested in a number of other e-commerce and internet-related businesses, as described in “— Business — Information and Communications Technology — Infrastructure and Services — Other Investments” below.
As a new business, revenues from our information and communications technology services accounted for 1% of our consolidated operating revenues in 2003.
We believe our business is characterized by the following competitive strengths:
• Recognized Brands. PLDT and Smart are strong and widely recognized brand names in the Philippines. We have built the PLDT brand name for 75 years as the leading telecommunications provider in the Philippines. Smart is recognized in the Philippines as an innovative provider of high-quality cellular services. Piltel’s Talk 'N Text brand, which is provided using Smart’s GSM network, has also gained significant recognition.
• Leading Market Shares. With over 15 million wireless and fixed line subscribers as of December 31, 2003, we have the leading market position in both the fixed line and cellular markets in the Philippines. ePLDT’s subsidiary, Infocom, is one of the leading ISPs in the Philippines.
• Diversified Revenue Sources. As a result of the continued growth of wireless service in the country, approximately 58% of our consolidated operating revenues in 2003 are now derived from our wireless business segment. Fixed line revenues, which represent 41% of our consolidated revenues in 2003 compared to 49% in 2002, have remained stable over the past three years despite pressures on traditional fixed line voice revenues, resulting from increases in our international long distance, fixed line data and other network services. We continue to identify and develop new revenue sources from our wireless, fixed line and ICT businesses.
• Advanced Integrated Network. With one of the most advanced and extensive telecommunications networks in the Philippines, we are able to offer a wide array of communications services. We are enhancing the capabilities of our fixed line and wireless networks to allow us to better exploit this competitive strength and achieve higher levels of network efficiency in providing voice and data services.
• Innovative Products and Services. We have successfully introduced a number of innovative and award-winning cellular products and services, including Smart Load, Talk ‘N Text Load and Pasa Load. Smart and Talk ‘N Text Loads are “over-the-air” electronic loading facilities designed to make reloading of air time credits more convenient for, and accessible to consumers. Pasa Load (literally means “transfer load”), a derivative service of Smart and Talk ‘N Text Loads, allows load transfers to other Smart Buddy and Talk ‘N Text subscribers.
• Strong Strategic Relationship. We have an important strategic relationship with NTT Communications and First Pacific. The technological support, international experience and management expertise made available to us through these strategic relationships enhance our market leadership and ability to provide and cross-sell a more complete range of products and services.
The key elements of our business strategy are:
• Build on our leading positions in the wireless and fixed line businesses. 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 also plan to further increase the capacity and expand the geographic reach of our cellular network, as well as to improve our service quality and indoor coverage. Our operating target is to continue growth in profitability by increasing our revenues while controlling costs. 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.
• 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 cellular. We are also lowering our costs by integrating the operations of our different businesses.
• Strengthen our leading position in the data market. Recognizing the significant growth potential of data and other network services, including internet-based services, and their increasing importance to PLDT's overall business strategy, we are emphasizing the development of our data and network business segment to address the needs of large corporations, small and medium-sized enterprises and retail customers. We have launched a variety of products and services, including data network services like digital leased lines, frame relay, asynchronous transfer mode, or ATM, internet Protocol Virtual Private Network, or IP-VPN. We are progressively introducing internet-based services such as digital subscriber line, or DSL to our corporate and residential clients, International internet Gateway or I-Gate for ISPs and large corporations.
• Strengthen our financial position. We are engaged in a number of initiatives to strengthen our financial position. We are working to increase our cash flow available for debt reduction by containing our operating costs, reducing capital expenditures and generating cash returns from our investments in subsidiaries. In December 2002, Smart made its first dividend payment of Php1,540 million (not to exceed 40% of its net income in 2001) to PLDT to supplement PLDT’s cash flows available for debt reduction, followed by Php4,300 million in June 2003 and Php1,866 million in November 2003 (representing dividends equivalent to 70% and 30%, respectively, of its 2002 net income) and Php11,280 million in May 2004 (representing 70% of Smart’s 2003 net income under Philippine GAAP.)"
Best wishes,
Jason Lowen
310.692.0112 (no SMS, plain text messages ok)
011.310.692.0112 (outside of U.S. and Canada)
lowenjs@gmail.com
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