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PT&T plans P7-B fund raising for broadband expansion

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By Denise A. Valdez

PHILIPPINE Telegraph and Telephone Corp. (PT&T) is looking to raise P7 billion for its plan to expand its fixed line coverage throughout the country over the next two years.

In a press conference on Thursday, PT&T Chief Executive Officer James G. Velasquez said the company had started expanding its presence outside existing coverage in Metro Manila and outlying areas in Regions 3 or Central Luzon, and 4A or Mimaropa (Occidental Mindoro, Oriental Mindoro, Marinduque, Romblon and Palawan).

“In a span of one year, I can say the company has done extremely well. And that’s really because of the focus on our current business, which is broadband. We are a 100% pure fiber broadband company today. Our plan is to grow that,” he said.

“We have already started expansion of our network . . . I think we’re looking at P100 million to fund immediate growth for this year,” adding about P7 billion is needed to build a nationwide backbone.

In March, the listed company signed a memorandum of understanding (MoU) with state-owned National Transmission Corp. (TransCo) to use the government’s national fiber optic backbone facility.

Mr. Velasquez said the partnership with TransCo is expected to help in PT&T’s plan to expand its fiber footprint to about 20,000 kilometers from the current 10,000 kilometers.

“We’re working on [our MoU with TransCo] as well, essentially to get us nationwide presence. We plan to be able to increase our fiber footprint from 10,000 kilometers to about 20,000 kilometers, which is essentially reaching more Filipinos in the country,” he said.

He noted as soon as the company’s signs a final agreement with TransCo, PT&T is looking at a 24-month nationwide expansion period, which will come in three phases: six months for Luzon, a year for Visayas, and the remainder for Mindanao.

With the goal of boosting its operations after suffering from an P8.8-billion debt, PT&T had sought an early exit from its court-assisted rehabilitation program and is seeking the resumption of trading of its shares at the Philippine Stock Exchange.

The regional trial court of Makati City granted PT&T’s petition to leave its corporate rehabilitation last month.

On Thursday, the company held its first annual stockholders’ meeting since its voluntary suspension of trading with the PSE in 2004.

Shareholders have agreed in the program to conduct a debt-to-equity conversion, to increase the authorized capital stock to P15.6 billion from P3.8 billion, and to participate in the government’s search for a so-called “third telco” player.

Alfredo T. Divino, Jr., the company’s chief finance officer, said PT&T aims to source funding for projects, such as the broadband expansion and third telco bid, through a mix of equity, internally generated funds and the resumption of trading,

“The whole range of capital-raising activities are open to us, and we will calibrate depending on the amounts needed,” he said.

Renato B. Garcia, one of PT&T’s directors, said the company is in talks with foreign investors for the funding of its third telco participation, but refused to disclose details.