Good afternoon everyone and welcome to the PLDT conference call. (Operator Instructions). At this point I would like Melissa Vergel de Dios, Head of Investor Relations of PLDT for the introductions. Please go ahead. Thank you.

Good afternoon, and thank you for joining us today to discuss the Company’s financial and operating results for the first quarter of 2014. As mentioned in the conference call invitation, today’s presentation is posted on our website. For those who have not been able to do so, you may download the presentation from www.pldt.com under the Investor Relations section. Today’s presentation, we have with us members of the PLDT Group management team; namely, Mr. Poly Nazareno, President and Chief Executive Officer of both PLDT and Smart; Mr. Chris Young, Chief Financial Advisor of PLDT; Ms. Anabelle Lim-Chua, SVP, Treasurer of PLDT and Chief Financial Officer of Smart; and Atty Ray C Espinosa for regulatory group. At this point, let me turn the floor over to Mr. Poly Nazareno for the presentation.

Good afternoon. Let me share with you PLDT’s financial and operating results for the first quarter of 2014. The growth momentum we saw in 2013 carried into the first quarter of 2014 with data and broadband continuing to drive year-on-year improvements. Service revenues for the first quarter of 2014 increased by 3% year-on-year to 41.2 billion with our wireless and fixed line businesses registering increases of 2% and 5% respectively. Consolidated EBITDA for the period dipped by 2% to 19.7 billion with EBITDA margin at 48%. Reported net income at the end of March rose by 200 million to 9.4 billion compared with the same period last year. Core net income increased by 200 million or 2% year-on-year to 9.8 billion. On the next slide consolidated service revenues grew by 1.2 billion or 35 year-on-year to 41.2 billion in the first quarter of 2014. With the increasing adoption of broadband growing revenue streams from non-SMS data services of PHP10 billion accounted for 24% of our first quarter revenues and exceeded the 16% contribution from our declining legacy international voice and national long distance businesses of 2.5 billion. This quarter saw the combined revenues for cellular domestic voice, SMS and LEC dipped by 400 million or 2% to 24.7 billion mainly due to the 1.1 billion decline in SMS revenues which offset the PHP700 million rise in LEC and cellular domestic voice presence. EBITDA margin for the period stood at 48%, an improvement over 47% for 2013. Consolidated EBITDA was lower by 2% year-on-year at 19.7 billion due to higher cash operating expenses and increases in subsidies resulting from a greater push to grow our postpaid business. On the next slide as previously mentioned PLDT expects the growth momentum and profitability to continue with core income estimated to rise from 38.7…

(Operator Instructions). Our first question comes from the line of Luis Hilado. Your line is now open.

I had three questions, the first one is just on the SMS, just additional comments, you did mention that the dip is mostly structural in nature but just wondering if competition any factor of SMS volumes are lower, in short are you losing share on the SMS side? Second question is regarding I think in order to set for postpaid plans, a lot of the wireless data is still time based rather than usage based. Do you anticipate that when you switch to time based you will be actually be able to enhance the revenues and yield from the analysis data [ph] and last question is on the results on the cost of sales. Just wondering if you can give a breakdown of what percent roughly is acquisition versus retention.

On your first question on SMS our unique subscriber base for the prepaid has in fact slightly increased or more or less remain flat. So therefore what has happened was that there was a reduction in the number of SMS that they were sending. Part of it has been because of the alternative instant messaging available and this has been increasing because of the smartphone penetration growing from 10% in the first quarter of last year to roughly above 18% by the end of the first quarter this year. The free Facebook of competition has also affected negatively the SMS but considering that our subscriber base has remained impact, what has happened I guess they were having a third or second SIM for this and doing the free Facebook on those sims. So we’re seeing this behavior and we’re looking at several ways by which we can counter this situation. Now I understand they are terminating that promo which is disruptive not only on our part but I guess on their part also and we hope that Facebook can be incorporated and we can partner with them but in a more profitable way both sides. On the number two question, when it comes to time based and volume based we’re of course encouraging shift into volume based. But we have to do this in a way that would be faced in -- acceptable by the consumers and I think the power app which is proprietary to us on where we can associate the data usage or data (indiscernible) on the prepaid environment and re-fence the apps that are being offered can very well help us do this. In that manner actually we’re moving towards the volume based rather than the time based. Number three, is cost of sales…

I guess Luis we’re still growing our postpaid subscriber with newer positions. The few of the subsidies would be higher towards the new position probably [ph] than fewer retentions.

Our next question comes from Arthur Pineda. Your line is now open.

I think it's the opportunity, three questions to me as well. Firstly just to follow-up on Luis questions on SMS, given the near term the free Facebook promotion from your competitor. Should we now start to see SMS revenues being provide in second quarter or do you think the pressure on this will continue? Second question is regard to data usage, what percent of your subs now regular in use data and what is the average usage level being? And last question is just regarding to your recent promotions on micro-denominated data plans. Could you help us understand what kind of take up levels we’re seeing from consumers on these promotions? Thank you.

On the first question, well we’re assuming that hopefully the promo will be terminated and once that is done the partnership with Facebook can be done in a way that it would also be revenue generating on the operator side because at this point it's purely disruptive. But let me point out Arthur that if you combine both voice and SMS because actually voice went up by 8%, SMS went down like 10%. So the reduction in revenue has been mitigated by voice revenues increasingly and that has to be taken together.

As we kind of indicated our smartphone penetration is approximately 18% of the base and off that about quarter of that pay for data, that’s why you kind of work out that to be about 2 million to 3 million I guess new source on a monthly basis.

And the usage level?

The usage level is about increased to by about a 150% in terms of data byte for prepaid -- for the mobile internet. Revenue increased by 81% so obviously more data is being used but the yields are not going up as much.

So the last question was on the take up for these micro-denominated promotions which you launched in March.

Which promotions?

1.3 million have downloaded the app.

Two months about 1.3 million of downloaded app.

Our next question comes from Navin Killa of Morgan Stanley. Your line is now open. Navin Killa – Morgan Stanley: I had three questions; the first one is going back on the SMS weakness. Now if I understand correctly I mean a bulk of your SMS revenues are coming from the PHP20 daily reloads which includes I guess unlimited SMS and voice. So I’m just trying to understand why the volumes and particularly the revenues are down because of this fee and the promotions. Are you essentially trying to say that people are not uploading the value in the prepaid card? So that question number one just trying to understand why the revenues are declining. Secondly on the margins on the fixed side which obviously have include and we have got double digit EBITDA growth, how sustainable due you think this double digit kind of EBITDA growth rates are in the fixed business? Do you think that business has turned around from an operating leverage standpoint? The last question is you can provide a very quick update on the media businesses of the group, I guess particularly TV5 and what’s the status there in terms of audience share turnaround, profitability turnaround et cetera. Thank you.

For the first question Navin, the frequency if I’m not mistaken the frequency of loads was the one that has lessened. It's not the number of subscriber base. So what has happened most likely they have availed the free Facebook with separate SIM. And that is not revenue generating and for they could use Facebook as a means to chat with their community circle. So that’s the behavior we’re seeing. It's really, it is disruptive but I guess it's more disruptive on the other side.

I think there has been a fairly hefty improvement which is encouraging. I think it's partly that we’re beginning to see the impact of the rationalization of the old digital fixed line network with the PLDT network. So there are some fairly significant savings coming through. So in the previous periods 2013 we were effectively still running the two networks and having some rationalization costs included in that. So I think we’re up to 40% for the Q1. That maybe a little bit high going forward but I certainly think we’re going to run at the higher rate than the last year were 37%, Q1, 36% full year. We may be settling about the 38% – 39%.

We were having ourselves discussion as to what was the question, I understand your third question is media upgrade. Well when it comes to signal that is doing very well and in fact in the first quarter of this year they have reached over 700,000 subscribers and is now a positive net income and certainly EBITDA and so therefore it's moving very well. On the print side I guess most of them are profitable so we have no problems there. In fact our business rolled [ph] in the first quarter because it has been incorporated now with the operations of Philippine Star is now positive EBITDA largely because they have now include the distribution et cetera, et cetera. So on the Free-to-Air we have some challenges there but we’re currently trying to reformat our approach and strategy in the market which we will soon disclose. Navin Killa – Morgan Stanley: Can I just ask one follow-up I guess on the fixed broadband side, you mentioned that you have got a million customers which is roughly 48% of your total fixed line customer base. I’m just trying to think about I guess the target market size for the fixed broadband. I mean does your current fixed line subscriber base form a natural limit to that market or could your fixed broadband customer base you know where the medium term being even bigger than the 2.2 million fixed line customers that you’ve right now.

I think there are the effects on our closing in conversion of the legacy network for NGN will help a lot. We’re very close in that conversion already. I think we’re about 75% or 80% done there. So the remaining 20% to 25% or so would give us an additional subscriber take up there once the outside plan or the last mile would be more capable or data capable. The other thing that would give us an upside would be our fixed wireless product which we recently launched was Ultera which is the PLDT deployment. I have personally looked at one connection in one of the towns in the outskirts of Luzon and it can easily be installed and the speeds that you can get is roughly about 10 megabits per second. So that one is we’re deploying that in the areas where our reach on the last mile for the fixed line is not there, at the same time we’re also looking at the TD-LTE as the substitute for our fixed wireless -- Wimax and Canopy which are end of life type of technology.

Our next question comes from Chate Ben of Credit Suisse. Your line is now open. Chate Ben – Credit Suisse: I have two questions as well. The first one is I think the decline SMS now I understand that possibly short term it's coming from the free Facebook promo which is now extended but on a bigger picture it's also shows how cannibalization impact could negatively affect you guys. So at the current point in time does this kind of free Facebook promo shows you that we might have not done enough in protecting the revenue base and is there added measure that you can actually do or this structure? The second question is regarding the potential growth -- let’s go back to the free Facebook promo as well. I understand that your power app also offers some free social network basically if I download I can enjoy the free Facebook or some free features on that right as well. Would you have plan to actually cancel that or would that actually continue? But that question is regarding your smartphone penetrations and it is 18% on your base, can you actually break that down between the postpaid and prepaid penetration please? Thank you.

Yes, when it comes to achievements we have our own plans because as you may know about close to 40% of the handsets in the country are still feature phones. So we’re looking at ways the means to enhance SMS so that this would approximate the experience that you have on the other instant messaging services. That is the one that we’re exploring and you’re right, we want to be able to get the experience directly to the existing consumers who have feature phones. Power app does not really free but because it is a means of (indiscernible) the app and ring fencing it but you’re paying for it. So if you’re--

But free social [ph] is an incentive for people to download the app at the moment, yes it's still early introduction.

And also behind the power app it's more of an efficient use of bandwidth. So that makes it a --

It's a profitable service actually. Chate Ben – Credit Suisse: And just a breakdown of the smartphone penetration please?

I don’t have it off my head, if you work out the numbers that number is bigger now than our postpaid base so certainly there is already quite a bit of penetration into the prepaid base as well.

Thank you. (Operator Instructions).

Operator if there are no more questions let me now turn the conference over back to you for the replay.

Thank you. I would like to give everyone the instant replay information for today’s call. This conference will be available on a 24-hour instant replay starting today daily on through May 20, 2014. Replay information for the CPM call, international caller number is 852-3018-4335. The U.S. toll-free number would be 1866-845-9497. The UK toll-free number would be 0800-376-5673. The Singapore toll-free number is 6128-030-3035. The Passcode would be 1792. And conference leader is Melissa Vergel de Dios. I will now turn the conference back to PLDT for any additional or closing remarks.

On behalf of my colleagues who are here today I thank you so much for joining us this afternoon and we look forward coming to you again on all those five I believe for our first half results. Thank you.

Thank you. And that concludes today’s conference. Thank you for your participation. You may disconnect your line in your own time.