Atty. Ray C. Espinosa, ePLDT president and chief executive officer, is in his zone leading the Philippine Long Distance Telephone Co. subsidiary in pursuing growth in the information and communications technology (ICT) sector.

Espinosa, who simultaneously holds various positions in the PLDT group, says decision-making should involve the views of the management team. In running a business, there is no room for dictatorship, he says. For Espinosa, a democratic business atmosphere goes hand-in-hand with inspirational leadership, where the head recognizes the ability and competence of the junior executives leading them toward professional growth.

“You have to nurture these professionals and give them the respect they deserve, which includes listening to them. If their views are correct and mine is wrong, you have to able to give it to them,” he says.

Espinosa, who topped the 1982 bar examinations, says empowering managers, particularly those in the middle levels, is good for personal development because they can be made accountable and responsible for their duties and areas. He also keeps an open-door policy to give them guidance.

But when it comes to crunch time, Espinosa takes charge.  

Please describe your entry into the telecom sector.

In 1998 when First Pacific was planning to invest in PLDT, they hired lawyers and went to my firm Sycip Salazar Hernandez and Gatmaitan. At that time, the managing partner of the law firm of First Pacific knew me. Being out of practice, he engaged me for First Pacific and we closed the deal in November 1998. At that time, he first made me a director of PLDT. After two years, they decided to make an offer for an executive function in the group.

I am always on the business side of things because most of my practice in Sycip was in business mergers and acquisitions. So that side of the fence always attracted me.  When you look at it on the lawyer’s side, it’s always fascinating to watch, especially big companies, how they act, move and look at things.

Plus, of course, I guess the more moving reason in deciding to make the shift was to have a chance to work with MVP [PLDT chairman Manuel V. Pangilinan]. We know him professionally and his work ethic especially. In the firm, I was one of the lawyers who worked the longest hours with an average of 15 hours plus during the weekends.

Doing the shift in terms of his working style was not a problem for me. In PLDT, I enjoy the work tempo because it’s fast paced. I get bored when the pace is slow. I work better when there’s more pressure. 

Did it require major adjustments upon moving to PLDT?

You had to make an adjustment in terms of how you look at things because you now have to look at things from the business side, although when I was working with the firm, the business lawyers of the firm looked more into the business side rather than the legal side. That’s why we were known for finding the right solutions to the legal questions and transactions. We looked at legal issues more from the business side and how to be able to allow business do what they want to do within the legal framework. In that sense, we have that perspective, given our 17-year exposure to business issues.

So, taking a look at the business side was not strange. But, of course, you need a lot more than that. You have to think the way they do. All the time you have to consider that you are working for a larger organization.

When I was in the law firm, I was one of the bosses. Here, you have to be a team player. That is the strength of the senior management in PLDT. They are all team players. 

What is the role of ePLDT in the group?

We’re a smaller part of the group. Our focus is really on ICT. We started as a data center service business in 2000. And looking back, I think we started the business too early in the sense that we were one of the pioneers and there was not much demand yet locally for data center services. Although looking back now and like a year ago, you can see how big the demand is for these types of services. In fact, our data centers are almost full and we’ll probably be full by the end of the year. So we’re looking at building a second data center by the end of the year.

That’s been ePLDT’s, I guess, history in the sense that we started businesses. For a certain period of time, we became the loss leaders of the group in the case of the data centers. But we have been able to turn it around, make it profitable and the demand of business for this type of services has increased dramatically.

Then we ventured into the Internet café business. There again, we blazed the trail in the sense of owning a large network of Internet cafés. But the strategy behind that really then was, if people really knew, to essentially move the growing Internet café industry from dial-up to DSL [digital subscriber line]. When we launched Netopia, we wanted to deploy DSL. And because we offered a better quality than dial-up, very soon the other Internet cafés followed. And so the Internet cafés today are now on DSL. Whatever edge we had at the start we lost overtime. That was just part of the strategy. There are around 12,000 to 13,000 Internet cafés nationwide. Although we have 25 cafés of our own, that’s not enough for you to control the industry. So, we just sort of blazed the trail for DSL to be the preferred connectivity of the cafés. 

Are there plans to expand the number of Internet cafés?

We will expand them but it will be more strategic rather than just growing the Internet cafés in terms of numbers. The industry is huge, composed of big, medium and small operators. We don’t want to impede the small entrepreneurs. One is because it’s good to develop that kind of spirit. Second, they also end up as customers of PLDT. As the industry grows in terms of numbers, especially numbers from other players, it benefits the group in a larger way. 

How is ePLDT contributing to the growth of PLDT?

Well, last year in terms of revenue we contributed 7 percent of PLDT’s revenue. By 2009, we’ll probably be 9 percent to 10 percent of PLDT’s revenue. We are trying to increase our contribution to the profit of PLDT on a consolidated basis. Hopefully this year, our profit outlook will be better than last year. We have encountered problems with our health-care unit. A number of pricing, quality and delivery issues emerged. But most of them were solved in the first quarter. So, we expect the health-care unit to see signs of a turnaround by the second half of the year. That’s the only one we view significantly to impact our bottom line. Actually, the medical transcription unit improves revenue-wise and profit-wise, and then the profitability of ePLDT will be felt more by PLDT. It’s increasing. But of course we want the increase to be very palpable. We all want to be meaningful contributors to the group. 

Is there a need to rush toward becoming a more relevant contributor?

You need to rush. When the group is moving very fast, you have to keep pace with the group not in terms of business expansion, revenue growth and profit growth. This year, our subsidiary Infocom Technologies will be focusing on the small medium enterprise segment offering them communication solutions including obviously Internet access. It complements the PLDT strategy of the SME Nation.  Infocom has a version of the SME Nation but not as large scale as PLDT. It will concentrate on the SMEs, which is the bulk of the business in the Philippines. The solutions that you offer to the big corporations are not the same needs of the SMEs. And they need the same quality of service but at the price points to the size of their businesses and the segment of the market they cater to. 

What makes a Jesuit-trained lawyer different from the rest of his colleagues?

I won’t really compare the system of training in Ateneo, say, with UP. They have to make a fine analysis of the differences. But one thing I can say is the law program in Ateneo is very relevant. It’s not simply bar-oriented in the sense we will study the law to ensure the graduates will eventually pass the bar. Passing the bar is expected of you provided you study very well. So for me, when you enter law school, obviously you want to become a lawyer and you have to pass the bar. Having said all of that, it begins by studying very well.

You have to take your studies seriously. And you also have to choose a law school that you believe has professors with a wealth of experience and knowledge that makes them well positioned to share with you the finest knowledge and experience. So without disrespect to the other law schools, a serious law student or would-be law student must be conscious also of the strength of the law school and its faculty. It improves obviously your chances of passing the bar since that is the end resolve of your studies.

But more important—and because it is what you need to carry through after passing the bar—your grasp of the law is also very important. In law school, you will study the basic principles of the various laws. And that is something you have to take seriously. But what you learned in law school amazingly is a lot different that how you basically apply the law in the real world, especially in business, and that comes with just basically practice.

Raising the bar

Atty. Ray C. Espinosa, ePLDT president and chief executive officer, is in his zone leading the Philippine Long Distance Telephone Co. subsidiary in pursuing growth in the information and communications technology (ICT) sector.

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