I.

Introduction
1.1 Company Background
1.1.1 Company Profile
Philippine Long Distance Telephone (PLDT) is the leading telecommunications
and digital services provider in the Philippines. Through its principal business groups,
PLDT offers a wide range of telecommunications and digital services across the
Philippines’ most extensive fiber optic backbone, and fixed line and cellular networks.
I.1.2 Services
The company’s business can be divided into three main business areas: fixed
line, wireless, and information and communication technology.
• The fixed line business provides local calls, national and international long
distance services, which operates around 2.1 million access lines.
• The wireless segment provides cellular, satellite, and VSAT services. PLDT
provides cellular services through SMART, while Piltel is a reseller of Start’s digital GSM
capacity under its own branding and pricing strategy for both voice and text messaging
services.
• The information and communication technology provides solutions for internet
applications and multimedia content delivery, with use of internet protocol-based
solutions. The internet access are provided by Infocom ‘a subsidiary of ePLDT. And
other investees of ePLDT provide e-commerce, call centers, and other IT-related
services.
I.1.3 Company History
“Philippine Long Distance Telephone (PLDT) started in the Philippines on
November 28, 1928. The Philippines Legislature granted PLDT the franchise to
establish and be able to operate telephone services, following the merger of 4
telephone companies under a common US ownership.”
“It was in 1967 when General Telephone and Electronic Corporation sold PLDT
to a group of Filipino businessmen. The Philippine government’s intention to integrate
the Philippine telecommunications industry made way for PLDT to purchase the
Republic Telephone Company in 1981.”
“Common shares of PLDT are listed and traded on the Philippine Stock
Exchange (PSE). These are also listed and traded on the American Stock Exchange
and Pacific Exchange in the US, prior to October 19, 1994. During October 19, 1994,
American Depositary Receipts (ADRs) were issued with each American Depositary
Share (ADS) that represented one PLDT common share. The ADSs are listed and
traded on the New York Stock Exchange and the Pacific Exchange in the US.” 1
1
http://www.pldt.com/about-us/company-timeline

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 I.1.4 Company’s Current Revenue
Philippine Long Distance Telephone Company
3rd Quarter Financial Highlights

Figure 1.1 2
The company’s revenue went up a little, while its net income went down by
9%.The EBITDA or earnings before interest, tax depreciation and amortization is one of
the indicator of the financial performance of one’s company. As seen in the illustration,
the EBITDA decreased by -5% due to a lower revenue from services from their wireless
business while they accumulate higher cash operating expense. The reported net
income and core net income both went down by -9% and -5% respectively. The core net
income went down because the company spent money for manpower reduction and
higher financing costs. Although PLDT experienced a flunk in its income, the company’s
financial position is still competitive and it gets better yearly and quarterly not just in
terms of income but also in its service.
I.1.5 Company’s Asset Size
2
http://www.pldt.com/investor-relations/financial-results#FS

Page | 2
As of September 30, 2015, PLDT’s current asset (in thousand)
Current Assets

Cash and cash equivalents 33,902

Short-term investments 1,161
Trade and other receivables 24,187
Inventories and supplies 4,072
Current portion of derivative financial assets 7
Current portion of investment in debt securities
-and other long-term investments
Current portion of prepayments 6,589
Current portion of advances and other noncurrent assets 8,198

Total Current Asset 78,116

Figure 1.2 3

As you can see the current asset is only 18% in their total current asset. PLDT is
more on long-term investments.

I.1.6 Major Markets Served

A market can be defined as a group of consumers or organizations that is
permitted by law and other regulations to acquire the product or services. The market of
PLDT can be defined as the following:
3
http://www.pldt.com/docs/default-source/financial-results/fs/2015/3q-fs.pdf?sfvrsn=0

Page | 3
 a. All individual and businesses that need to maintain essential contact and
exchange information easily.

b. All individual that need to access data, send and receive emails to their loved
ones and even among the workers and the businesses and customers.

c. All business organizations that need to improve customer service in carrying out
transactions and provide a fast and reliable system of transmitting goods and
services.

I.1.7 Number of Employees

Philippine Long Distance Telephone Company currently has a total of 17,429
employees in 2015, while it has 17,962 employees in 2014. They laid off 533 or 3% of
their employees in 2015 because they are currently implementing its manpower
reduction program (MWP) for them to be able to align their skill set of its workforce and
reduce costs.
I.1.8 Other Relevant Basic Information
“PLDT is a telecommunications service provider in the Philippines. Through its
three principal business groups - wireless, fixed line, and others. As of December 31,
2014, the Company provides fixed line and cellular service to approximately 70% and
61% of the total reported fixed line subscribers and cellular subscribers, respectively,
nationwide. PLDT has interests in the BPO sector, including the operation of customer
relationship management and knowledge processing solutions business.
PLDT's subsidiaries include Smart Communications, Inc. (Smart); ACeS
Philippines Cellular Satellite Corporation; ABM Global Solutions, Inc.; Bonifacio
Communications Corporation; Digital Telecommunications Philippines, Inc.; and ePLDT,
Inc., an integrated information and communications technology provider.
PLDT, through Smart, entered into a joint venture agreement with Rocket
Internet AG (Rocket) on January 6, 2015, after which they formed MePay Global, a joint
venture for payment services with a focus on emerging markets. On the 20th of the
same month, PLDT and Rocket formed another joint venture in Philippine Internet
Group, which will concentrate primarily on creating and developing internet-based
businesses in the Philippines.”4

4
http://www.pse.com.ph/stockMarket/companyInfo.html?id=6&security=134&tab=0

Page | 4
II. Research Design and Methodology
For the external analysis, current and projections on macroeconomics statistical
data and indicators were obtained from different government websites and publications.
For the internal analysis, the company’s site also provide different information that
helped the researcher’s throughout the paper. The researchers used its Financial
Statements that was provided by PLDT in their site to get its revenue, financial growth,
and net income.
II.1 Major Assumptions

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 Revenue of the PLDT will increase in the following years.

“The country’s leading telecommunication services provider Philippine Long

Distance Telephone Co. (PLDT) expects to complete its P1 billion data center in
Makati in the second quarter of 2016.” 5

 The Investments of PLDT with other business will help their company expand.
Equities, Profits, same as their Revenues, will increase.

“On January 6, 2015, PLDT, through eInnovations, entered into a joint venture
agreement with Rocket, pursuant to which the two parties agreed to form MePay
Global, of which each partner will hold a 50% equity interest. MePay Global is a
global joint venture for payment services with a focus on emerging markets.

On August 11, 2015, eInnovations invested €1.2 million into MePay Global.

On January 20, 2015, PLDT and Rocket entered into another joint venture
agreement to further strengthen our existing partnership and to foster the
development of internet-based businesses in the Philippines. PLDT, through
iCommerce, a subsidiary of Voyager’s eInnovations, and Asia Internet Holding
S.à r.l., which is 50%-owned by Rocket, will become shareholders in PHIH. “ 6

 Customers would love a proper service, and quality products. The more the
company have outstanding performance, more customers will be subscribe and that
leads to increase in their Revenues

2.2. Scope and Delimitations

The study will focus on the company’s strategic framework and management
practices it uses. Thus, it will be limited only to the output that the website provides, and
also statistics and figures from business articles, financial and annual reports that will be
cited and reviewed.

III. Company’s Vision and Mission

Mission
PLDT will be the preferred full service provider of voice, video and data at the
most attractive levels of price, service quality, content and coverage, thereby bringing
maximum benefit to the Company's stakeholders.
3.1 Mission Components
Components Yes/No Comments
Customers Yes “thereby bringing
5
http://www.manilatimes.net/pldt-data-center-finished-by-q2-2016/224446/
6
http://www.pldt.com/docs/default-source/financial-results/fs/2015/3q-fs.pdf?sfvrsn=0

Page | 6
 maximum benefit to the
Company’s
stakeholders.”
Products/Services Yes “PLDT will be the
preferred full service
provider”
Markets No Even though they stated
their products, they did
not mention any focus
markets.
Technology Yes “provider of voice, video
and data at the most
attractive levels of price,
service quality, content
and coverage”
Concern for Service, No PLDT did not mention
Growth, Profitability their concern for their
growth, or profitability.
We think that it is
because they are the one
who’s on top, so their
concern is not a problem
but it should be in their
mission vision. Who
wouldn’t want their
company being more
successful?
Philosophy No The sense of
belongingness is
important. For customer
to feel that they are being
well taken care of. They
should include it on their
mission vision.
Self-concept Yes “full service provider”
Concern for Public No Although PLDT have
Image engaged in multiply
concerns, whether on
media or advertisement,
concern for public image
is not on their mission
vision. They should
include their commitment
to the customers.
Concern for employees No They should state that
they are committed for

Page | 7
 the growth of their
employees to be a better
individual as well as to be
a better provider for
customers.
Table 1
According to Fred David, it is important to have the nine components. Most
practitioners agreed to David. So, for the PLDT’s mission vision, we think that we must
add the components that are lacking in their current mission vision.
3.2 Recommended Vision Statement
Vision
To be the first choice in the telecommunication business and to continue to
develop products and giving the best possible service to our customers.
We will be committed to unfold our products and services that will serve as a
substance to a much easier lifestyle and new opportunities.
3.3 Recommended Mission Statement
Mission
PLDT will be the preferred full service provider of voice, video and data at the
most attractive levels of price, service quality, content and coverage, thereby bringing
maximum benefit to the Company's stakeholders.
To run the company on a sound financial basis of profitable growth as well as
creating career opportunities and rewards for employees and providing a fair return to
investors while doing it with the standards of integrity.

IV. External Analysis

IV.1 General Environment
4.1.1 Economic Developments
Trade & Production
“Telecommunication revenues account for 2.5% (or US$ 5.3 billion) of the country’s
Gross Domestic Product (GDP), contributing some $267 million annually to economic
growth and generating 1.0% of total tax collections” 7

7
https://www.itu.int/ITU-D/treg/broadband/BB_MDG_Philippines_BBCOM.pdf

Page | 8
Relevance
Telecommunication industry is a significant and growing sector in its own right. In
terms of market capitalization, the telecommunication industry ranks third in the world
behind health care and banking.
It plays an important role for other industries. Information, and the facilities for
accessing, processing, and disseminating data. Wireless communications improve
productivity of supply chain and distribution processes
PLDT has a dual role as both a traded product and service and as a facilitator of
trade in other products and services.
Labor and Employment
“Top Job vacancies by major occupation groups provide some important insights on
job vacancies that were not numerically large but nevertheless vital to the growth and
success of businesses and industries in the NCR.”8
Ranked at #6: Telecommunications equipment installers and repairers (351)
Relevance
With the rapid technological change; parallels an increase of required skilled workers
for the industry also. A good investment in broadband may attract different companies
to put out and install a site; that may generate an additional jobs for telecommunications
equipment installers and repairers.
4.1.2 Political and Legal Aspects

Senate Bill 2238

“A bill has been filed at the Senate seeking to require telecommunications
companies to provide faster Internet connections in the country.In Senate Bill 2238,
Senate President Pro Tempore Ralph Recto proposed that the government impose a
minimum Internet connection speed of 10 Mbps (megabits per second) on local
telecommunications firms and Internet service providers (ISPs).” 9
Relevance
This bill will help PLDT achieve their set goal or it can do much better than expected.
Who wouldn’t want a fast internet right? Even though PLDT has one of the fastest
internet connection, many people will be happy for a more improve internet. And if the
company have it, they can have a lot people subscribe to them.
Technology Act of 2015
8
http://www.tesda.gov.ph/uploads/File/Planning2013/Hot%20skills%20for%20Hot%20jobs_final.pdf
9
http://www.gmanetwork.com/news/story/363038/scitech/technology/senate-bill-to-require-faster-internet-in-
phl

Page | 9
 “The Senate approved on third and final reading a bill creating a separate
department that would supervise solely on the development of the country’s growing
information and communications technology (ICT) sector.
The approved Senate Bill No. 2686 will be known as the Department of
Information and Communications Technology Act of 2015.
”This measure aimed to promote digital literacy and ICT expertise across the
country,” Senate President Pro-Tempore Ralph Recto, chairman of the Senate
committee on science and technology and sponsor of the bill, said.” 10
Relevance
Information and communication technology (ICT) is a vast field encompassing
virtually all technologies that can store, receive or transmit signals electronically.
ICT is a wide range of new communications, and it is good to the company but ICT will
also be hard because it can give a personal details to others which can result to losing
money, or worse a reputation.
4.1.3 Technological Developments
Australia’s Telstra to invest less than $1-B in PHL
“Amid concerns on foreign ownership restrictions in the country, Australia’s
telecoms giant Telstra would be investing less than US$1 billion in the Philippines
through a partnership with local conglomerate San Miguel Corp. (SMC).
In the Philippines, foreign investors, as they enter the local market, could only take up to
40 percent interest to any existing or new company, while the 60 percent should be
owned by a Filipino entity.Andrew Penn, Telstra chief executive officer, said that should
Telstra decide to pursue its Philippine venture, it would only initially invest less than
USD 1 billion, in contrast with previous reports, because of some regulatory concerns.” 11
Relevance
Australia's Telstra is going to be a threat to PLDT because they offer a high
speed internet connection for an affordable price compared to what PLDT is offering
now in the market. It is a threat because they will lose customers when it starts to be
operational in the Philippines, however this could be a good opportunity for them to
prepare for the upcoming entrance of Telstra.
LG Smart TV offers Netflix option in PH
In line with its global partnership with multinational Internet TV provider Netflix,
technology leader LG Electronics announced that the on-demand streaming operation
will already be available in the Philippines starting today.
10
http://www.mb.com.ph/senate-approves-bill-creating-information-technology-department/
11
http://www.mb.com.ph/australias-telstra-to-invest-less-than-1-b-in-phl/#dqtUoifp0cSFcCCC.99

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 The expansion will bring an extensive library of high-quality content, including 4K
HDR-mastered original TV series, to more markets in Asia, the Middle East and Europe.
LG has been chosen as a primary global business partner of Netflix due to the superior
picture quality and performance they lend to the Smart TV industry and the Netflix
viewing experience alike.
Relevance
Netflix has become a widespread streaming application and was already
welcomed by PLDT. They already started offering unlimited packages for Netflix
Chromecast, however this can be an opportunity for PLDT to partner up with different
television brand maker to be able to optimize and innovate the use of Netflix.
Online freelancing in PH thrives amidst slow Internet
“With an Internet speed averaging 3.6 Mbps, the Philippines slumps way behind
its fellow Southeast Asian countries as the slowest in the region, as shown in “The Cost
of Internet in the ASEAN +3 Region” infographic recently put together by MoneyMax.ph,
a comprehensive online platform that compares telecom and financial products and
services. But in what appears to be a defiance of the current state of affairs, the
Philippines is also leading among its neighbors in terms of earnings from online work,
according to freelance talent marketplace Upwork.
With the Philippines undergoing a digital transformation in almost all sectors,
Filipino freelancers are learning to make smarter use of their available resources to gain
more reliable Internet access. This is in light not only of the sluggish Internet speed, but
also of the occasional typhoons and power outages that cause interruptions for several
hours, even days.
To overcome this, many Filipinos are taking advantage of a growing list of
options to connect to the Internet, such as portable WiFi hotspot devices, mobile
Internet data, as well as WiFi service in restaurants and cafes. Particularly with the use
of portable WiFi, independent professionals can choose to switch to faster Internet if
their current home broadband is lagging.”12

Relevance

As the Philippines continues to encounter a slow internet connection is one of the

reasons for PLDT to make a new product or service that will help solve this issue. This
is an opportunity for PLDT to be the first telecommunication company to be able to give
a fast internet connection while other companies can’t. This can also help them to build
more company confidence by its continuous fast connection.
12
http://www.mb.com.ph/online-freelancing-in-ph-thrives-amidst-slow-internet/#9F6BKc1GjbOk7kiH.99

Page | 11
 4.1.4 Socio-cultural Changes

Changes in lifestyle

“Telecommunications networks have allowed us to cross barriers associated with

time and distance, the new multimedia realm is allowing us to include vital physical cues
in the information stream, introducing a physical reality into the world of electronic
communications, goods, and services.”13

Relevance

Telecommunications is a way of life. Telecommunications affects how and where

you do everything—live, work, play, socialize, entertain, serve, study, teach, rest, heal,
and protect. Telecommunications has served a critical role in shaping society and
culture, as well as in shaping business and economics.

Technology supports not just the needs of a business enterprise, but also those of
the consumers. The revolution in integrated media is transforming all aspects of human
activity related to communication and information.

Changes in level of education

“Colleges and universities are beginning to embrace the use of internet,

specifically, social media and realizing the potential power and implications for using it
as a component of their overall marketing mix.“ 14

Relevance

By the use of internet, social networks are increasingly being used by teachers and
learners as a communication tool.

Teachers create chat rooms, forums and groups to extend classroom discussion to
posting assignments, tests and quizzes, to assisting with homework outside of the
classroom setting.

Bridges communication gap

13
http://www.informit.com/articles/article.aspx?p=24667
14
http://www.fullerton.edu/technologyservices/_resources/pdfs/social-media-in-higher-education.pdf

Page | 12
 “Like the telephone and the telegraph (and unlike radio or television), people can
overcome great distances to communicate with others almost instantaneously.

Many people use it as another means of contacting friends and family, especially
when distance makes in-person and telephone communication difficult.

Social media bridges the distance among different people. It offers platforms for
online users to find others who share the same interests and build virtual communities
based on those shared interests.”15

Relevance

The availability of social media technologies and services, content sharing and
user interaction has become relatively easy and efficient by the use of internet.

4.1.5 Environmental and Climate Changes

Changes in environment

“Many components of mobile phones are considered toxic like arsenic, lithium,
cadmium, copper, lead, mercury and zinc. These poisonous substances may leach from
decomposing waste in landfills, seep into groundwater and contaminate the soil. Metals
build up in the soil, can then enter the food chain and in sufficient concentrations may
cause health problems.

But not just the dumping of mobile phones is dangerous for the environment. The
production of new mobile phones contributes to climate change by using up energy and
virgin materials which release greenhouse gasses into the atmosphere. It is estimated
that up to 90% of these greenhouse gases can be saved by recycling materials from
mobile phones.”16

Relevance

PLDT is affected with the different changes in technologies happening in

environment. When the technologies changes, PLDT also changes. Nowadays, almost

15
http://www.yale.edu/acmelab/articles/Internet_and_Social_Life.pdf
16
http://www.cleanup.org.au/au/CleanUpMobilePhone/the-problem-with-mobile-phones.html

Page | 13
all person have their respective phones. So the demand on the market for making a
mobile phone or telecommunications is high.

We can say that the manufacturers produce a high products of phone, which
affects the environment as said in the article. But those phone, it does help PLDT and
also to people because it becomes more easier to connect to others when you have a
phone.

Changes in Climate

“Information and Communication Technologies (ICTs), such as satellites, mobile

phones or the Internet, play a key role in addressing the major challenges related with
climate change and sustainable development. ICTs are fundamental for monitoring
climate change, mitigating and adapting to its effects and assisting in the transition
towards a green economy. By raising awareness of the role of ICTs, ITU is promoting
transformative solutions that can ensure a sustainable future for all. Explore the links
below to find more about ITU’s vision and mission in the area of environmental
sustainability and climate change.”17

Relevance

ICT is good for a firm. It was said in the article that it is a fundamental for
monitoring climate change. The ICT can help monitor our environment and then it can
also help with the process in the company.

IV.2 Industry and Competitors Analysis

4.2.1 Market Size

Telecommunication companies is important nowadays because it is the key that

helps people to communicate with one another. It is important for everyone because of
the purpose that it transmit data by internet, telephony, video conferencing, instant
messaging, email and etc. It also help a business to grow more innovatively.

17
http://www.itu.int/en/action/climate/Pages/default.aspx

Page | 14
 Figure 1.3

Philippine Long Distance Telephone Company is still the largest company in the
telecommunication industry in the country. Being the largest, PLDT holds the highest
market share with Globe as its competitor. PLDT is considered as the market leader for
it holds 60% percent of the markets share that is based on the revenue for the last
quarter of 2015. Globe as the market follower that holds 40% of the market share.

IV.2.2 Number of Players in the Market

The telecommunications industry in the Philippines particularly the mobile service

market is dominated by two (2) major players, namely Philippine Long Distance
Telephone Co. (PLDT) and GLOBE Telecom.

These two big mobile service providers – PLDT and GLOBE Telecom,
contributes a lot in the gross domestic product (GDP) of the Philippines.

IV.2.3 Market Aspects

IV.2.4 Buyer Profile

Businesses, school and individuals are mostly the customer of the products of
service that is offered by PLDT. Businesses needs internet connection or other
computer-generated products to be able to communicate well with their customers,
investors and shareholders. While school also needs internet connection to help the

Page | 15
students whenever they are doing research and such. Individuals like workers, student,
man, woman also uses PLDT’s telephone service that helps them communicate with
one another, and it also provide faster communication form people living abroad.

IV.2.5 Factors Affecting Costs of Doing Business

According to World Bank Group, Philippines ranked 97 last 2015 in doing

business and ranked 157 in starting a business. Filipinos is really passionate in doing
business, it doesn’t matter if its small business or large. Passion is what makes them
decide on doing it, and of course the need of money. And starting a business requires a
lot. Patience, effort, determination, commitment and, of course, money.

Factors affecting costs in doing business are:

- Funding – your starting capital should be good for six months to one year.
So, if you want a large business, you must have a large starting capital. There
will be a problem if you don’t have the amount, you will have to settle on other
business. Example, you want to have a restaurant, you need one million but then
you just have five hundred thousand, so you will just have to settle on cafeteria.

- Managing Costs - when a person have a business already, the need of

cost management is important. The life of the business depends upon the
success of it. So when a person mismanages the costs, then it will be a starting
point of the downfall.

- Network with People - the probability of the business to be successful will

increase if the size of your market is large or when you do a lot of market. People
will be more, when you successfully handle the network with people.

- Mindful of performance – owners should know the ins and outs of their
market. Being mindful will let the owner be more efficient about the spending.

- Implementation – starting a business without a plan is just like wasting

your money. Planning is important and implementing it will help the business
more successful. Your forecast will be close to what you want. Cost will be
planned and business will earn.

Page | 16
 4.2.6 Operations Aspects

IV.2.6 Technology Developments

PLDT recently partnered up with Netflix which is an multinational provider of on-

demand movies that can be watched via internet streaming media, because of this ““We
recently increased the speeds of all Fibr plans while we continuously deploy more LTE
sites for wider coverage in anticipation of customers’ growing appetite for bandwidth
heavy apps like video streaming,” PLDT and Smart EVP and Consumer Business
Group Head Ariel P. Fermin said.”18

“Last November 2015, PLDT completes its P6 billion network migration to be

able to enhance their digital services wherein it transformed its landline network into a
purely Internet Protocol (IP)-based Next Generation Network (NGN) system.” 19 Because
of this customer will experience a better service quality. It also enhanced their capacity
to offer different and more customized services to their subscribers.

“PLDT Global and its subdsidiary, PLDT Online Inc., partners with Bayad Center to
provide online bills payment facility for Overseas Filipinos.” 20 The recent partnership of
PLDT to Bayad Center will provide a better and secure transactions for Overseas
Filipinos, it also allows them to buy gifts for their love ones back at home with a very
flexible and secure payment options.

IV.2.7 Industry Financial Analysis

Liquidity Ratios

Working Capital

Current Asset
18
http://www.pldt.com/news-center/article/2016/01/08/pldt-home-and-smart-subscribers-can-now-enjoy-
seamless-video-streaming-via-netflix#.VrSgvbJ97IU
19
http://www.pldt.com/news-center/article/2015/11/18/pldt-completes-p6-billion-network-migration-to-
enhance-digital-services#.VrSg4bJ97IU
20
http://www.pldt.com/news-center/article/2016/01/05/pldt-global-and-its-subsidiary-pldt-online-inc.-partners-
with-bayad-center-to-provide-online-bills-payment-facility-for-overseas-filipinos#.VrSmhbJ97IU

Page | 17
 -Current Liabilities

2015 2014
-71960 -67653

Acid Test
Cash + Marketable Securities + Accounts Receivable
Current Liabilities

2015 2014
.39 .39

Current Ratio
Current Assets
Current Liabilities

2015 2014
.52 .53

Cash Ratio
Cash Equivalents + Marketable Securities
Current Liabilities

2015 2014
23% 19%

Profitability Ratios

Net Profit Margin (Return on Sales)

Net Income

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 Net Sales

2015 2014
20% .22%

Return on Assets
Net Income
(Beginning + Ending Total Assets) / 2

2015 2014
22% 19%

Operating Income Margin

Operating Income
Net Sales

2015 2014
46% 49%

Return on Investment
Net Income
Long-term Liabilities + Equity

2015 2014
09% 10%

Return on Equity
Net Income
Equity

2015 2014
23% 21%

Gross Profit Margin

Page | 19
 Gross Profit
Net Sales

2015 2014
91& 92%

Financial Leverage Ratio

Total Debts to Assets

Total Liabilities
Total Assets

2015 2014
74% 69%

Capitalization Ratio
Long-Term Debt
Long-Term Debt + Owners' Equity

2015 2014
61% 54%

Debt to Equity
Total Debt
Total Equity

2015 2014
74% 69%

Long-term Debt to Net Working Capital

Long-term Debt
Current Assets - Current Liabilities

2015 2014
-2.40 -2.35

Page | 20
Efficiency Ratios
Cash Turnover
Net Sales
Cash

2015 2014
3.77 4.78

Sales to Working Capital (Net Working Capital Turnover)

Net Sales
Average Working Capital

2015 2014
3.56 3.76

Total Asset Turnover

Net Sales
Average Total Assets

2015 2014
.59 .59

Days' Sales in Receivables

Gross Receivables
Annual Net Sales / 365

2015 2014
28 days 27 days

Accounts Receivable Turnover

Net Sales
Average Gross Receivables

2015 2014
25.87 26.56

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Accounts Receivable Turnover in Days
Average Gross Receivables
Annual Net Sales / 365

2015 2014
14 days 14 days

Days' Sales in Inventory

Ending Inventory
Cost of Goods Sold / 365

2015 2014
127 days 133 days

Inventory Turnover
Cost of Goods Sold
Average Inventory

2015 2014
6 5.5

Inventory Turnover in Days

Average Inventory
Cost of Goods Sold / 365

2015 2014
17 days 18 days

Operating Cycle
Accounts Receivable Turnover in Days
+ Inventory Turnover in Day

2015 2014
14 days 14 days

IV.2.8 Problems in the Industry

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 IV.2.9 Critical Success Factors in the Industry

CSF # 1 Financial Position

It is the main factors of success, because it shows the financial soundness of a

company. Financial Position is very important to every business because this can
determine the company’s profitability and can help managers in making important
decisions.

CSF # 2 Network Coverage

One of the factors is a wide network coverage area of each company. It must be
able to reach provinces and remote areas.

CSF # 3 Product Quality

Product Quality is very important to keep a customers from patronizing your

products. They should give an excellent product quality to be able to keep loyal
customers. Excellent quality will win every customers heart.

CSF # 4 Customer Service

They should give their customer a good service because it can help build up
loyalty for their products. Having a good customer service quality will make customers
happy. A successful business have a happy customers. Although it’s only a customer
service they should always serve their customers by giving their best shot.

CSF # 5 Competitive Price

They should offer prices that matches with the quality of their service and
products, they should be able to present a competitive price for a products or services
that is essentially worth buying.

CSF # 6 Customer Loyalty

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 One of the biggest factors of the business is to keep their customers. Loyal
customers are the ones that will patronize all the products to be offered by the business.
It can help the company to be more reliable and to improve their products for the
customers that patronize them.

CSF # 7 Maintenance and Repairs

Maintenance and repairs is important especially when customers encountered a

problem using their products. Maintenance and repairs will be assisting the customers
experiencing problems with the products they purchased. Having a good maintenance
and repairs can help customers build up trust to their products.

IV.3 Porters Five Forces Analysis

Rivalry of Competition – STRONG

Globe Telecom and PLDT 3rd Quarter Market Performance

Figure 1.421

21
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 Revenue Market Revenue Increase/(Decrease)
Share 2014 Market Share
2015

PLDT 63.38% 60.12% (3.26%)

GLOBE 36.62% 39.89% 3.27%

Total 100% 100%

Table 2

PLDT, one of the greatest competitor of Globe Telecom still holds the largest
market share in the telecommunications industry, however PLDT suffers a decrease in
its revenue, but still they’re competitive with regards to their broadband and mobile
subscribers. Philippine Long Distance Technology is the market leader who also claims
to be the “undisputed number one” while Globe as the market follower or said to be the
“number one”

Platinum Plans Globe vs. PLDT

Figure 1.5 22

22
http://www.yugatech.com/telecoms/race-to-the-gigabit-pldt-fiber-vs-globe-fiber-compared

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 Comparing the fiber internet connection of both companies, it is seen that they
offer almost the same broadband services however both have different pricing and free
contents. It can be seen in the illustration above that the prices of PLDT is much higher
compared to Globe but their promos is only limited to a few speed limit. It is seen to be
that the products of both companies can be easily differentiated.

Overall Analysis

Telecommunication industry is considered oligopolistic in nature, where in there

is only few firms in this industry thus owned by two giants, PLDT and Globe. A very
intense competition is very evident within the two company. For instance, when PLDT
launched its Platinum Plans, Globe matches its plans with it however, with a lower price.
It can be a factor where buyers can switch brand easily. It shows that rivals sell similar
products and services.

With our generation today, the demand for post-paid and prepaid services never
declines. Fixed costs is high, but doesn’t became a burden for the two giants because
they are still open for more products and services improvements.

PLDT is the powerhouse of telecommunication industry in the Philippines but so is

Globe Telecom; in which they face strong competition in both national and regional
level. These two big companies are in continuous and constant battle to outperform one
another.

“With PLDT’s takeover of Sun Cellular, the country came under the duopoly of
PLDT and Globe. And through slick promotional activities, PLDT and Globe have given
the impression they are engaged in competition with each other to give the public the
best services at the least cost possible.”23

Potential for New Entrants - WEAK

23
http://business.inquirer.net/202217/competition-in-telecommunications#ixzz3zVB8cbQJ

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Government regulatory policies

In the Philippines market, entry into the telecommunications industry is heavily

regulated and involves two important processes. A new company that wants to operate
in the sector is first required to secure a congressional franchise as provided for in the
Constitution. The Constitution also limits foreign ownership of a telecommunication
company at 40 percent and the life of a franchise to be no more than 50 years.
Furthermore, both houses of Congress must approve the franchise. That said, all the
major telephone companies are owned by commercially powerful and politically
influential families, and have strong partnerships with overseas investors.

After securing a franchise, a company has to apply to the National

Telecommunications Commission (NTC) for a Certificate of Public Convenience and
Necessity (CPCN) for the type of service that it wants to offer. Through the CPCN, the
NTC assigns the area of operation, determines the allowable rate that could be charged
for a service, and manages the allocation of radio spectrum or frequency.

Access to scarce resources

Access to scarce resources is defined here as the timely, transparent and non-
discriminatory access to spectrum allocation. It includes the numbering and rights of
way, frequency allocation, telephone number allocation, and tower location rights.

Republic Act 7925 states that “radio frequency spectrum is a scarce public resource
that shall be administered in the public interest and in accordance with international
agreements and conventions to which the Philippines is a party and granted to the best
qualified. The government shall allocate the spectrum to service providers who will use
it efficiently and effectively to meet public demand for telecommunications service and
may avail of new and cost effective technologies in the use of methods for its
utilization.” Furthermore, the allocation of radio frequency spectrum allocation and
assignment shall be subject to periodic review and its use is subject to reasonable
spectrum user fees. Where demand for specific frequencies exceeds availability, the
open tenders for the same and ensure wider access to this limited resource

Bargaining Power of Suppliers – STRONG

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 PLDT aspires to maintain mutually beneficial relationships only with like-principled
suppliers that uphold PLDT’s core values of fairness, accountability, integrity, and
transparency in their own businesses. PLDT has over 1,000 active suppliers which
serve the requirements of the PLDT Group, ranging from capital expenditures to
operating expenditure items, as well as services.
 Technology is taking over the world, on a day there are many technology which are
being released and as we know, the substitute products affects the products of
PLDT, customers can easily switch to the another product or services.
 Changing of materials can be costly.
 Telecommunication commonly use a vertical integration and not the backward
integration.

“The advantages of vertical integration for telecoms operators in general, and wholesale
providers that carry their own retail minutes in particular, can be substantial.” – Global
Telecoms Business

Bargaining Power of Buyers - STRONG

PLDT and Globe both dominated the Philippines Telecommunications Industry

and considered as the giants, where in both companies already acquires almost all of
the companies within this industry. Telecommunications circulates within this two giants,
wherein it is already considered having high bargaining power of buyers. Each
companies products and services are almost comparable which causes a customer to
change from Globe to PLDT and vice versa. People patronize a business with a low
price but with a good quality, it must be one of the factors why one customers switch
from one provider to another.

Different buyers means different volume of product consumption, household will

only avail in small volumes while big businesses may avail a high volume product or
service.

“Philippine Long Distance Telephone Co. (PLDT) saw a 2% decrease in service

revenues to P81.2 billion “due to declines in legacy and traditional businesses,” while
Globe saw a 13% increase to P53.8 billion, “on the strength of robust revenue gains on

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mobile data and broadband,” the companies said in separate disclosures to the
Philippine Stock Exchange yesterday.

Globe’s mobile business saw a 10% annual revenue growth to P41.6 billion, boosted
by a 53% surge in mobile data revenues to P9.5 billion, and a 7% increase in mobile
voice to P18.6 billion.”24

The demand for both internet and mobile service provider is sensitive, or elastic
which shows a high bargaining power of buyers. Different services and products affects
the perspective of each buyer, however their products are undifferentiated.

Potential for Substitutes - MEDIUM

Internet voice “Internet telephony”

Internet telephony is the use of the Internet rather than the traditional telephone
company infrastructure and rate structure to exchange spoken or other telephone
information.

Since access to the Internet is available at local phone connection rates, an

international or other long-distance call will be much less expensive than through the
traditional call arrangement.

On the Internet, three new services are now or will soon be available:

• The ability to make a normal voice phone call (whether or not the person called is
immediately available; that is, the phone will ring at the location of the person
called) through the Internet at the price of a local call

• The ability to send fax transmissions at very low cost (at local call prices) through
a gateway point on the Internet in major cities

• The ability to send voice messages along with text e-mail

ALLY

Competitive Profile Matrix

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 PLDT Globe
Critical Success Factors WT R S R S
1. Financial Position .20 3 0.60 4 0.80
2. Network Coverage .15 3 0.45 3 0.45
3. Product Quality .15 3 0.45 2 0.30
4. Customer Service .10 2 0.20 2 0.20
5. Competitive Price .15 4 0.60 2 0.30
6. Customer Loyalty .10 4 0.40 4 0.40
7. Maintenance and Repairs .15 3 0.45 2 0.30
Total 1.00 3.15 2.75
Table 3

The highest is Philippine Long Distance Telephone Company with a score of

3.15 while Globe follows with a score of 2.75

Critical Success Factors

1. Financial Position
Rating 3 PLDT: Moody's Investors Service says that Philippine Long Distance
Telephone Company's (PLDT, Baa2 stable) increasing capex and continued
weak operating performance in 2Q 2015 are credit negative. Moody's is cautious
on the company's medium-term outlook, as leverage will remain in the upper end
of tolerance for its Baa2 issuer and senior unsecured ratings. Based on the
PLDT’s financial report their core net income decrease for 5%, but given that
performance, PLDT is still the leading telecommunication.

Rating 4 Globe: Globe’s consolidated service revenues amounted to P83.4

billion from January to September, 15 percent higher than the P72.7 billion a year
ago. The latest consolidated service revenue result was due to the sustained
strong performance across all business segments covering mobile, broadband
and fixed line.

2. Network Coverage
Rating 3 PLDT: According to opensignal.com, their network reliability is 98% for
4G while 89% on 3G. The info is based on data users in coverage maps

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 Rating 3 Globe: Globe Telecom studies rolling out fuel cell systems that can
provide back up power solution in cell cites identified as most critical to ensure
delivery of telecoms services during crisis situations such as when a natural
disaster strikes.The installation of fuel cell systems in our cell sites is in line with
the company's network resiliency and preparedness plan to ensure our
customers have access to our voice, SMS and data network during times of
emergencies when availability of communication lines is most critical. Fuel cell
systems provide a cost-effective and reliable alternative to batteries and
generators. The fuel cell systems enable up to 100 hours of run time. The
methanol-fuelled back-up power systems ensures delivery of network services
during extreme weather events or when electric grid is unavailable or during
power outages

3. Product Quality
Rating 3 PLDT: PLDT continues to produce quality products. That’s why they
have an increasing number of customers.

Rating 2 Globe: Many have been complaining of losing signal service during
holidays. Also, receiving unnecessary text messages or spam.

Globe Telecom has filed a complaint with the telecoms regulator, accusing a
local heath firm, Caritas Shield of sending spam SMS to its customers. Globe is
calling on the regulator to ban the company from sending text messages to its
subscribers and seeking penalties and fines against the company.

4. Customer Service
Rating 2 PLDT: It is easy to access the PLDT’s customer service, but it takes
time sometimes. Sometimes, its easy process but sometimes you have to wait
for them to be available or the representor doesn’t know the solution to that
problem.

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 Rating 2 Globe: Globe rolled out a community manager initiative to provide all-
day support to consumers through Twitter in late 2012. After a year, it's customer
service was hit by an unforeseen setback when an impostor Twitter account
wove its way into conversations to make life difficult for unsuspecting users.

Using the false account, he can potentially compromise existing Globe accounts
by asking for the information of subscribers seeking assistance. All they need to
do is supply the fake account with their personal details through private
messages.

5. Competitive Price
Rating 4 PLDT: “I would never recommend anything with a data cap, especially
for home use. I would only recommend it to someone who is desperate and
hopeless of ever getting their own DSL. And even then, I would probably
recommend getting a pocket wifi instead with a prepaid SIM.” said Karen of
baratako.com It does not matches the price of the said plan. It becomes
expensive yet the net is not that upgraded.

Rating 2 Globe: Globe offers customers using postpaid plans with unlimited
mobile surfing abroad for P599, while Smart’s package is available for either
P450 (for Asian destinations) or P550 (for select countries in Europe, Africa, and
the US). However, Globe’s services can be availed in 70 countries. Smart’s are
only available in 41.

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 6. Customer Loyalty
Rating 4 PLDT: PLDT has many loyalty awards, one of this is customers
wherein they will earn points on either their SM Advantage Card, SM Prestige
Card, or BDO Rewards Card if they pay their PLDT bill before due date. All they
have to do is register their SM/BDO card and link it to their PLDT account
number.

Rating 4 Globe: Globe Telecom has its rewards program that will extend
exclusive benefits to existing and loyal postpaid subscribers. Globe Blue card is
the Globe Rewards membership portfolio that will reward mid-value customers
with special perks and topnotch after-sales service. Members will enjoy seasonal
treats like free movies, special offers from partner merchants for travel, dining,
and other lifestyle establishments throughout their membership year.

7. Maintenance and Repairs

Rating 3 PLDT: For those people in the city the Maintenance and Repairs of
PLDT is easier done than the ones who is in the province or places that is not
very accessible.

Rating 2 Globe: Globe has its ‘Help and Support’ page in their website where
customers can address their troubles and problems. However, it frequently takes
time and long period for them to answer and solve your issues.

4.4 Summary and Conclusion

OPPORTUNITIES
LG Smart TV offers Netflix option in PH Technological
The Use of Media in Higher Education Social
Senate Approves Bill Creating Political
Information Technology Department
Senate Bill to Require Faster Internet in Political
Philippines
THREATS

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 Australia’s Telstra to invest less than Technological
$1-B in PHL
Online freelancing in PH thrives amidst Technological
slow Internet
Senate Approves Bill Creating Political
Information Technology Department
Table 4
____________ALLY______________________

PLDT is currently doing well in the telecommunication industry, being the market
leader they’re still number one and remained unbeaten by Globe. They already planning
more innovative and faster products for the coming quarters which attracts more
customer, however there are still things they need to polish before releasing new
products or service. They have a poor customer service and an amidst slow internet
connections in other place may it be having a poor coverage or a good coverage area.

Competitive Position or the ability of the company to take or be more aware of

their competitors is important. For PLDT, it is strong. Even though they have a minor
weakness in their Customer Service, they’ve done well in other aspects. Their major
strength is their Competitive Price and Customer Loyalty. Customers said that they will
highly recommend PLDT to someone and as for their loyalty awards, is a lot, so many
customer are subscribing to it and that’s an advantage for them. The more customers
the more profit. They have Financial Position, Network Coverage, Product Quality and
Maintenance and Repairs in minor strength. PLDT’s financial report their core net
income decrease for 5%, but given that performance, PLDT is still the leading
telecommunication. Their revenue also increases. They’ve done well on network
coverage with their 4G, same as to the qualities of their products.

Clearly, PLDT knows how to compete with other companies. They’ve benefit well
because of it. They have in-depth knowledge of their target, their competitor. It enables
them to be define as a strong company.

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V. Company Analysis
V.1 Company’s Performance

V.2 Internal Audit

5.2.1 Management

Being a big company, PLDT currently has a total of 17, 429 employees which was
reduced by 533 last 2015. The management is currently implementing a manpower
reduction program (MWP) to reduce their operational costs and align the skill set of their
workers. This isn’t the first time they laid off employees, they previously implemented
MWP last 2012 which affect the lives of their 1,000 employees. They laid off employees
in lieu of their merger with Digitel Telecommunications Philippines, Incorporated or
which is known as Sun Cellular.

PLDT have a strict implementation with regards to the conduct or ethics of their
employees, as well as the directors. The company is disclosing the attendance of the
board members whenever there is a stockholders meeting. “PLDT’s corporate
governance principles is well structured and was benchmarked against global best
practices in corporate governance and yet it is applicable and responsive to PLDT’s
particular context.”25

25
http://www.pldt.com/corporate-governance-in-pldt/policies-processes-and-practices

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PLDT’s Organizational Structure

Figure 1.526

Board of Directors - provides strategic leadership in PLDT’s governance. The Board

oversees the corporate governance framework established to enable the Company to
conduct its business in order to foster long term success, sustain competitiveness and
create value for its stakeholders.

Board Committees

26
http://www.pldt.com/about-us/company-leadership

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 Advisory Committee - provides guidance and suggestions, as
necessary, on matters deliberated upon during Board meetings.
 Audit Committee - assists the Board in this key task and provides
support to the Board in discharging its oversight responsibilities over the
Company’s compliance with legal and regulatory requirements, its audit
process, and the performance of the Company’s internal audit
organization and external auditor (including the external auditor’s
qualifications and independence).
 Governance and Nomination Committee - oversees the development
and implementation of corporate governance principles and policies as
part of its governance function. It also provides assistance to the Board in
making an assessment of the Board’s effectiveness in the process of
replacing or appointing new members of the Board and/or Board
Committees, and in developing and implementing the Board’s
performance evaluation process. As part of its nomination function, it
reviews and evaluates the qualifications of the persons nominated to the
Board as well as those nominated to other positions requiring appointment
by the Board. In addition to this, it identifies persons potentially qualified to
become members of the Board and/or the Board Committees.
 Executive Compensation Committee - provides guidance and
assistance to the Board with respect to the development of a
compensation philosophy consistent with the culture, strategy and control
environment of the Company. It also oversees the development and
administration of the Company’s executive compensation programs and
assists the Board in the areas of performance evaluation, succession
planning and the professional development programs for officers.
 Technology Strategy Committee - assists the Board in reviewing and
approving the strategic vision for the role of technology in the Company’s
overall business strategy, fulfilling its oversight responsibilities for the
Company’s effective execution of its technology-related strategies, and

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 ensuring the optimized use and contribution of technology to the
Company’s strategic objectives and growth targets.
 Risk Committee - assists the Board in fulfilling its governance functions
relating to risk management. These functions include overseeing
Management’s adoption and implementation of a system for identifying,
assessing, monitoring and managing key risk areas, and reviewing
Management’s reports on the Company’s major risk exposures and
Management’s plans and actions to minimize, control or manage the
impact of such risks.
President and CEO - provides leadership for management in developing and
implementing business strategies, plans and budgets. He ensures that the business and
affairs of the Company are managed in a sound and prudent manner and that
operational, financial and internal controls are adequate and effective to ensure
reliability and integrity of financial and operational information, effectiveness and
efficiency of operations, safeguarding of assets and compliance with laws, rules,
regulations and contracts.

Internal Audit - assists the Board in its oversight responsibilities for the Company’s
financial reporting, internal control system, internal audit and independent audit
mechanisms. The Audit Committee discusses with the internal audit organization and
external auditor the overall scope and plans for their respective audits, the results of
their examination and their evaluation of the adequacy and effectiveness of the internal
controls and overall quality of the PLDT Group’s financial reporting. The Audit
Committee reviews and discusses the audited financial statements with Management
and the external auditor, as well as significant changes to the Company’s auditing and
accounting principles and policies.

PLDT has an internal audit organization that determines whether our structure of risk
management, control and governance processes, as designed and represented by
Management, are adequate and functioning to ensure that:

1. Risks are appropriately identified managed, and/or reported;

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2. Significant financial, managerial, and operating information are accurate, reliable
and timely;

3. Employees’ actions are in compliance with policies, standards, procedures, and

applicable laws and regulations;

4. Resources are acquired economically, used efficiently and adequately protected;

5. Programs, plans and objectives are achieved;

6. Quality and continuous improvement are fostered in our control processes; and

7. Significant legislative or regulatory issues impacting us are recognized and

addressed appropriately.

Chief Governance Officer - primary responsibilities of the Chief Governance Officer

include monitoring compliance with the provisions and requirements of corporate
governance laws, rules and regulations, reporting violations and recommending the
imposition of disciplinary actions, and adopting measures to prevent the repetition of
such violations.

Corporate Governance Office - is responsible for the continuing development,

drafting, issuance and review of appropriate corporate governance policies, attending to
reports received through the whistleblowing facility, addressing queries and providing
opinions or guidance on corporate governance matters to operating units, initiating
enforcement actions to ensure compliance with corporate governance policies, and
maintaining a corporate governance education and communication program that sees to
the development of the proper knowledge, skills, attitudes, and habits that would
promote voluntary observance of corporate governance policies.

Enterprise Risk Management - in charge of managing an integrated risk management

program with the goal of identifying, analysing and managing the PLDT Group’s risks to
an acceptable level, so as to enhance opportunities, reduce threats, and thus sustain
competitive advantage.

The Enterprise Risk Management (ERM) Framework adopted by the PLDT

Group is based on the principles and framework promulgated by the Committee of

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Sponsoring Organization of the Treadway Commission (COSO). The ERM process
used by the Group Enterprise Risk Management Department is based on the ISO
31000 standard on risk management.

External Audit - external auditor is appointed by the Audit Committee which reviews its
qualifications, performance and independence. To ensure objectivity in the performance
of its duties, the external auditor is subject to the rules on rotation and change (every
five years); general prohibitions on hiring of staff of the external auditor; and full and
appropriate disclosure and prior approval by the Audit Committee of all audit and non-
audit services and related fees for such services. Approval of non-audit work by the
external auditor is principally tested against the standard of whether such work will
conflict with its role as an independent auditor or would compromise its objectivity or
independence as such. 27

5.2.2 Marketing

PLDT’s marketing strategy currently needs improvement for the sales for the past
years decreased by 5%. The firm have a poor customer service for the past year and a
limited marketing strategy. The company have a strong recognition for its loyal
customers and they have a different kinds of reward program for different type of
customers. As a telecommunication company, the company uses a text blast system,
advertisements, discount programs, loyalty programs and social media accounts in their
promotion as a strategy to gain new customers. The company spends for the
advertisement of their products which is not a problem for them because they allotted a
money for marketing purposes.

Promotions

For the past years, PLDT is conducting different kinds of promos to gain the interest of
its target market. Here are some of the promos that PLDT is currently implementing or
was already finished:

 Get a 50% off on your one year DSL subscription if you switch to DSL Fam Plan
which includes a huge savings. This promo is effective to gain customers
27
http://www.pldt.com/corporate-governance-in-pldt/governance-structures

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 especially if there’s a breakdown of the money they will save if they switched to
this kind of subscription.
 PLDT Home Subscribers can enjoy at least 15% when shopping at Zalora, PLDT
Home Telpad subscribers will get P300 off. Girls or anyone who loves shopping
online will be thrilled by this offers, because it’s in a win-win situation wherein you
earn a big amount of discount for the perks of having subscribed with their
service.
 PLDT TeleRewards - be instantly awarded with points when you subscribe with
PLDT Home Rewards. This is affiliated with BDO, you gain rewards whenever
you transact through BDO and PLDT.
 “Back-to-school discounts start today at the Great Payday Sale!” This kind of
promotion attracts parents and other individuals to apply for an internet
connection.
Its promotion shows the strength of a company because they provide a good loyalty
program and different discounts that increases the relationship of the company to their
customers which made them satisfied and have a good sales.

5.2.3 Production/Operations Audit

PLDT is the first in the telecommunication company who introduced an

expansive fixed line network that reached United States and other parts of the world.
PLDT is known to be the leading telecommunication digital services provider in the
Philippines that started operating since 1928. With their long existence in the
telecommunication industry helped them by gaining the trust and loyalty of the
customers. It is considered as the pioneer in this type of industry whether be it from
different places.

PLDT is also known for their state of the art facilities and data center which costs
more than a billion peso. Technically almost all of the data of their customers and its
products is in the said data center that’s why it’s really important for the company. The
data center caters the “colocation and other data center service requirements of large
corporations, and the banking and finance companies with headquarters in the business
district.” According to ePLDT Coo Nerisse Ramos “We have always been committed to

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investing in and expanding our data center business not only in building world-class
facilities adhering to global standards but also in offering globally recognized services
from colocation, hosting platforms, network and security services to big data dynamic
platform. Proof to our commitment is our investment on the training and expertise
certification for our personnel, to provide our enterprise customers with best-in-class
service experience.” 28

When applying to PLDT’s service, all you have to do is fill up their form in their
website or you can call them. However, once you filled up the form there comes the
problem with installing the product because of the amount of customers requesting for
it. Having a skilled workers can increase the efficiency, quality and productivity of the
service. The operations manager must handle these situations fully. They should always
reach customers satisfaction and must have a capacity utilization per each type of
product.

5.2.4 Finance

The finance department is the one in charge for the different types of financial analysis that is
used for determining the business strengths and weaknesses with regards to investment, financing and
dividend areas.

Ratios Type 2014 2015

Liquidity Current Ratio .53 .52
Acid Test Ratio .39 .39
Leverage Debt to Total Assets 69% 74%
Debt to Equity 69% 74%
Activity Cash Turnover 4.78 3.77
Accounts Receivable 26.56 25.87
Turnover
Total Asset Turnover .59 .59
Inventory Turnover 18 days 17 days
Profitability Net Profit Margin 22% 20%

28
http://www.pldt.com/news-center/article/2015/04/05/pldt-group-starts-construction-of-p1b-state-of-the-art-
data-center-facility-in-makati#.VreLbvl97IU

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 Return on Assets 19% 22%
Operating Income 49% 46%
Margin
Return on Investment 10% 09%
Return on Equity 21% 23%
Gross Profit Margin 92% 91%

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