A Five Year Financial Plan for Digital Telecommunication Phils. Inc. and Subsidiaries

EXECUTIVE SUMMARY: Digitak Telecommunications Phils. Inc. and Subsidiaries provides telecommunication service to Filipino people here and abroad. Its objective is to provide highly quality service to Filipino community particularly within its service area in Luzon. In addition, DIGITEL is a company that is on an endless pursuit for excellence. It continues to push boundaries. It is seen as a rising telecom company that is one of a kind which excels and grows amidst fierce competition in the industry, The company single-handedly changed the way Filipinos communicate. By creating pioneering products and innovative pricing schemes, it opened people’s eyes to budget-friendly mobile technology. With its latest offering of bundled mobile and landline product packages, the Company is able to cater the ever-changing needs of today’s consumers. DIGITEL always wanted to give its subscribers an unforgettable experience, which is why it never stops thinking of ways to improve its products and services. DIGITEL’s general views its associated cost and gross revenue as the main factors why they are experiencing difficulty in generating net income. The specific problems are as follows: (a.) The company has inadequately managed their resources resulting to operations that cannot be easily optimized. (b.) The company has difficulty in paying their maturing liabilities by their current assets or by their most liquid assets as they fall due. (c.) The company is being highly supported by liabilities than by the shareholder’s invested capital in the company giving their creditors a low margin of safety. (d.) The company unprofitably utilized their assets and equity giving them a low return on both. (e.) Vas amount of the company’s generated revenues are absorbed by their operating cost. Due to the problems that the company is currently encountering, the proponents recommended the following solutions to help the company solve their problem. To restructure the company’s equity by issuing 2.6 billion shares out of the authorized capitalization limit of 9 billion shares at par value of Php1.00 through the PSE. This move will possibly generate P3.6 billion pesos which will be used for the company’s operation and expansion. However, this will also cost a large amount of money amounting to P85.9 million pesos. Once the company has restricted their equity, an improvement in their equity/debt ration and capitalization will be evident; a decrease in their debt could also be seen. Increase in shareholder’s value, development of creditor’s margin of safety and enhancement of the company’s financial data will come next in line . To generate cash from the disposal of the company’s obsolete equipment. This generated cash from the sale of the obsolete equipment will be used as additional capital for the company’s operation. The cost of implementation for this action is Php630,000.00 and the benefit for this action is approximately Php1,000,000.00. A possibility that the cost of implementation from such disposal will exceed the generated cash from the same is eliminated through careful assessment of the advertising firm that will partner with the company. To boost the company’s image through competitive promotions which is intended to attract and cater a wider range of market that will bring more profit to the company. The cost of implementation for this action is approximately P10.8 million pesos. This action will probably increase the market base of the company thereby increasing their service and nonservice revenue. Finally, after gaining a better image and a better financial statement, we recommended to raise the limit of the company’s authorized capitalization of 9 billion shares to 12 billion shares. This will enable the company to issue more shares which turn, generate additional capital for the company’s operation and expansion.

EXECUTIVE SUMMARY: Digitak Telecommunications Phils. Inc. and Subsidiaries provides telecommunication service to Filipino people here and abroad. Its objective is to provide highly quality service to Filipino community particularly within its service area in Luzon. In addition, DIGITEL is a company that is on an endless pursuit for excellence. It continues to push boundaries. It is seen as a rising telecom company that is one of a kind which excels and grows amidst fierce competition in the industry, The company single-handedly changed the way Filipinos communicate. By creating pioneering products and innovative pricing schemes, it opened people's eyes to budget-friendly mobile technology. With its latest offering of bundled mobile and landline product packages, the Company is able to cater the ever-changing needs of today's consumers. DIGITEL always wanted to give its subscribers an unforgettable experience, which is why it never stops thinking of ways to improve its products and services. DIGITEL's general views its associated cost and gross revenue as the main factors why they are experiencing difficulty in generating net income. The specific problems are as follows: (a.) The company has inadequately managed their resources resulting to operations that cannot be easily optimized. (b.) The company has difficulty in paying their maturing liabilities by their current assets or by their most liquid assets as they fall due. (c.) The company is being highly supported by liabilities than by the shareholder's invested capital in the company giving their creditors a low margin of safety. (d.) The company unprofitably utilized their assets and equity giving them a low return on both. (e.) Vas amount of the company's generated revenues are absorbed by their operating cost. Due to the problems that the company is currently encountering, the proponents recommended the following solutions to help the company solve their problem. To restructure the company's equity by issuing 2.6 billion shares out of the authorized capitalization limit of 9 billion shares at par value of Php1.00 through the PSE. This move will possibly generate P3.6 billion pesos which will be used for the company's operation and expansion. However, this will also cost a large amount of money amounting to P85.9 million pesos. Once the company has restricted their equity, an improvement in their equity/debt ration and capitalization will be evident; a decrease in their debt could also be seen. Increase in shareholder's value, development of creditor's margin of safety and enhancement of the company's financial data will come next in line . To generate cash from the disposal of the company's obsolete equipment. This generated cash from the sale of the obsolete equipment will be used as additional capital for the company's operation. The cost of implementation for this action is Php630,000.00 and the benefit for this action is approximately Php1,000,000.00. A possibility that the cost of implementation from such disposal will exceed the generated cash from the same is eliminated through careful assessment of the advertising firm that will partner with the company. To boost the company's image through competitive promotions which is intended to attract and cater a wider range of market that will bring more profit to the company. The cost of implementation for this action is approximately P10.8 million pesos. This action will probably increase the market base of the company thereby increasing their service and nonservice revenue. Finally, after gaining a better image and a better financial statement, we recommended to raise the limit of the company's authorized capitalization of 9 billion shares to 12 billion shares. This will enable the company to issue more shares which turn, generate additional capital for the company's operation and expansion.

Filipiniana

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