Liberty Telecoms Holdings Inc., the holding company of wi-Tribe Telecoms Inc. and Skyphone Logistics Inc., is not giving up its fight to corner a sizable share of the market, particularly in the broadband arena.
With mobile-penetration rate reaching its peak, the growth of Philippine telecommunication market is now being driven by the emergence of broadband services.
Currently, broadband services are offered by the Philippine Long Distance Telephone Co. (PLDT) group and Globe Telecom Inc. Just recently, the broadband market diversified with the entry of new broadband wireless technologies such as 3G, HSPA, HSPA+,WiMAX and LTE.
In the first quarter of 2009, Globe became the first operator to launch WiMAX commercially in the country. Smart Communications Inc., a wholly-owned subsidiary of PLDT, followed suit.
In February 2010 wi-Tribe had its soft launch and started providing fourth-generation (4G) broadband services. To date, the commercial offering of its products is still in its soft-launch stage. Hence, it posted a net loss of P1.14 billion last year.
“The company…in 2010 generated revenue amounting to P219.18 million. Current profitability ratios, drawn from the company’s soft-launch operations, understandably, would not appear attractive and would hardly be indicative of the business prospects of the company,” said Liberty in a disclosure to the stock exchange.
Liberty is currently preparing for its impending business expansion. It continues to roll out its telecommunications network in order to make its wi-Tribe broadband service available to more customers, and thereby result in the growth of the company’s subscriber base.
“The company, likewise, expects to capture a portion of the market by offering reliable broadband services at competitive prices,” it added.
Wi-Tribe said it has acquired various WiMAX equipment, which are installed in various sites in Metro Manila. Shareholders White Dawn Solution Holdings Inc., Vega Telecom Inc., a subsidiary of San Miguel Corp., and Qtel West Bay Holding, SPC, have provided cash advances to Liberty to finance working capital and capital-expenditure requirements.
Wi-Tribe will still acquire and/or lease new properties in the next months as it expands its telecommunications network. This planned acquisition will be funded through borrowings.
As in any business, Liberty said the future results of its operations involve a number of risks and uncertainties, such as the viability of wi-Tribe’s business plan to penetrate the wireless broadband business; availability of wireless infrastructure capacity for the WiMAX technology; availability of funds to sustain operating and capital expenditure requirements; market competitiveness vis-à-vis offerings of other industry players, among others.
“The management of the company conducts a continuous process of risk identification, assessment and management. It ensures that its risk-management activities and risk strategies are continuously improved and aligned with established business objectives,” it said.
