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NEW
Smart Communications subsidiary, Connectivity Unlimited
Resource Enterprise (CURE), expects to incur losses to
amount to P500 million until 2012.
The new
3G (third-generation) player, in a filing with the
National Telecommunications Commission (NTC) Tuesday,
informed the regulators that it intends to revise its
rates for voice, messaging, data and other value-added
services in order to financially support CURE’s
bilaterally-agreed national roaming rates with Smart.
Based on
its own projections, CURE’s total operating expenses
this year will reach P278.24 million; by 2009 the amount
is expected to increase to P329.06 million; P454.03
million in 2010; P581.41 in 2011; and P708.42 in 2012.
The expenses include rental fees of various equipment,
regulatory fees, administrative fees and salary wages.
The
company’s total capital expenditure is estimated to
reach P86.45 million for year 1; P66.49 million for year
2; P65.06 million for year 3; P64.46 million for year 4;
and P64.39 million for year 5.
The
capex will fund the company’s purchase of various
network systems, platforms, software and other equipment
needed to support its mobile-phone business.
However,
the expected revenues may not be enough to cover the
company’s expenses. During the first year, CURE’s total
gross revenues will only amount to P50.10 million;
P257.43 million for year 2; P375.79 million for year 3;
P504.68 million for year 4; and P665.04 million for year
5.
CURE’s
revenue summary submitted to the NTC also stated that it
would incur a total net loss of P530.62 million during
the first year of commercial operation; P404.02 million
on the second year; P371.68 million on the third year;
P523.67 million on the fourth year; and P534.27 million
on the fifth year.
Last
year, CURE reported a net loss of P234,905,624 as
against the previous year’s net loss of P145,833,440. At
that time, CURE was still 96.57-percent owned by PH
Communications Holdings Corp. and 3.43 percent by and
Francom Holdings Inc.
The PLDT
subsidiary acquired CURE last April for P419.54 million.
Smart had said it intends to invest up to P210 million
in CURE, in the form of subscriptions for new share. The
capital infusion will be used for CURE’s working
capital.
CURE
commercially launched its 3G service beginning this
month. It was awarded by the NTC frequency bands
1955-1965/2145-2155 megahertz. But its network coverage
spans only Metro Manila and it plans to rely on Smart’s
cellular network for services outside of the metropolis.
The
company has asked the NTC to approve an application for
a revision of rates because it could “have negative
revenues” if the maximum old rate range is applied since
the total cost is higher than the applicable rate.
The NTC
allowed CURE to charge up to P5 per minute for voice
calls within the network and up to P7 per minute for
calls terminated to other networks. In its proposed new
rates, CURE wants to charge subscribers P6.50 per minute
for intra calls and P7.25 per minute for inter-voice
calls.
“CURE
entered into a national roaming arrangement with Smart
and therefore, CURE’s on net and off net rates have to
be adjusted accordingly in order to financially support
CURE’s bilaterally agreed national roaming rates with
Smart,” said CURE.
If the
new rates are implemented, CURE said it will incur a
revenue of P0.90 per minute and P0.45 per minute for
every minute of on-net and off-net calls, respectively.
“For
future flexibility, CURE would like to have a rate range
of P0.00 to P10 per minute for both its on-net and
off-net rates,” added CURE.
For
overseas calls, CURE also wants to revise this from a
maximum of P10 per minute to a maximum of P20 per
minute. If it will charge P15 per minute of
international direct dial (IDD) call, CURE will earn
P2.70 per minute. “Due to inflation rate and the
fluctuating dollar exchange rate, CURE would like to
have a rate range of $0.00 to $0.50 per minute for its
IDD service,” it added.
Also,
CURE wants to change its charging scheme for value-added
services (VAS) from per kilobyte to per download or
access since some contents, it said, are not allowed to
be downloaded. As such, CURE would like to impose a
maximum of P50 per download or access from the current
range of P0.05 to P0.10 per kilobyte.
Browsing
or data access per minute is at P0.05 per kilobyte. Due
to competitor pricing and public demand to be charged
for mobile Internet usage based on time, CURE would like
to change its charging principle from per kilobyte to
per 30-minute intervals. “CURE would like to have a rate
range of P0.20 per 30 minutes,” it said.
CURE’s
head of finance and administration Cristina Zapanta said
in her affidavit that the company’s services are
financially feasible and that CURE is financially
capable of maintaining and offering such services. |
