Byline: Bernie Cahiles-Magkilat

The Board of Investments has denied Philippine Long Distance Telecommunications Co. (PLDT) of income tax holiday incentives for its multi-billion-peso next-generation network (NGN) projects saying the nationwide franchise of the dominant telecoms carrier

A member of the Board of Investments (BoI) has told reporters that the Board during the project deliberation did not even look at the multi-billion investments of PLDT's 3 NGN projects.

"The Board never even bothered to look at the figures for investments and the computed income tax holiday because the immediate question raised was whether the projects should be entitled to incentives or not," the source said.

Based on its project proposal, PLDT will provide landline connections in unserved areas in the different parts of the country. The project was divided into three based on geographical locations of the far-flung municipalities and provinces that the company has proposed to serve. The three projects will be implemented in different stages.

Already, PLDT has set aside 35 percent of its P22 billion capital expenditure for 2007 for its NGN expansion in response to growing demand for broadband and data services.

The PLDT group rolled out an initial 150,000 NGN lines in 2006 and will install up to 700,000 new lines in 2007.

NGN refers to an all-IP (Internet Protocol) setup that can transport all services (voice calls together with SMS, video, Internet and other non-voice services) in just one network instead of having separate lines for voice and data.

But during the BoI Board meeting, officials noted that PLDT has already a nationwide franchise.

The Board further said that even if another telecommunications firm will provide the NGN service to those unserved areas, it will still have to pass through the PLDT gateway or its infrastructure backbone to operate its telephone services.

"In this case, the PLDT still derives business from it whether they operate in those unserved areas or not," the official said.

Nonetheless, the Board member said that the PLDT project is still entitled to other BoI incentives such as duty-free importation of capital equipment and additional tax payment deduction on expenses for training among others.