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PHILIPPINE Long Distance Telephone Co. (PLDT) said it
would craft a strategy on how to temper the ill effects
of a decision by the Board of Investments to take out
the phone giant’s capital-intensive projects from the
list of undertakings that should get incentives from the
government.
The
projects include PLDT’s mobile television and new
generation network, or NGN. The board, or BOI, usually
grants tax holidays and suspension of levy on imported
capital investment to such projects.
“We just
have to accept that and work out a strategy by which we
can make the business viable,” said PLDT president
Napoleon Nazareno in an interview.
myTV,
PLDT’s mobile-television service is currently on
test-broadcast. It is being offered by the former GV
Broadcasting Systems Inc.—now known as MediaScape
Inc.—in cooperation with Smart Communications Inc.,
which will handle the billing, sale and distribution of
mobile phone that can decipher and TV signals and play
programs.
MediaScape is a unit of MediaQuest Holdings Inc., the
investment vehicle of PLDT Beneficial Trust Fund.
MediaQuest initially invested $30 million to jumpstart
the mobile TV service. The company, which focuses on
media-related investment opportunities, said it would
earmark $50 million for the next three years to fund the
operation of its mobile-television business.
Nazareno
said further investments for mobile, television service
would now depend on demand for the service. MediaScape
has yet to commercially launch myTV.
“It
depends on how the take up of the demand will be. Right
now, until we get our license for the operation of
mobile television, we can’t really determine it yet,”
Nazareno added.
MediaQuest reportedly sought income-tax holiday for myTV.
Reports have it that the BOI has turned down the request
on grounds that the project has no impact on economic
development.
The BOI
also reportedly denied ITH tax incentives to the NGN
project.
NGN
remains a priority project of the PLDT Group. It has in
fact spurred a major reorganization within the group in
line with a plan to transform itself into a new
generation company NGN and data investments last year
reached P4.93 billion, or 20 percent of the group’s
P24.8-billion capital expenditures (capex).
PLDT,
partly owned by Hong Kong’s First Pacific Co. Ltd. and
Japan’s NTT group, is earmarking approximately P25
billion in capex this year.
Nazareno
is now devoting most of his time managing the fixed line
business, which is in the midst of upgrading to an
all-IP (Internet protocol) NGN.
PLDT
said 108,000 now subscribe to NGN service.
In 2006,
the BOI had recalled the tax incentives granted to
Smart’s 3G business.
Smart
appealed to the BOI to reconsider its decision. It
stressed that the 3G project, which involves huge
capital investments would need tax incentives to help
subsidize the cost of accelerating the deployment of 3G
technology in less developed areas.
Smart
added that the removal of tax incentives for the
cellular firm’s 3G project is inconsistent with the 2005
Investment Priorities Plan (IPP) and Executive Order
226.
“The BOI
has no power to disqualify any domestic-oriented or
market-seeking investment in the telco sector, or to
create or impose new disqualifications that are not
provided in the 2005 IPP, from [tax incentive]
entitlement. For the BOI now to remove the… incentive is
obviously contrary to and inconsistent with the 2005 IPP
and EO 226,” Smart said. |
