SEC Number 145111 File Number

SEC Number 145111
File Number ________
______________________________________________________________________________
DIGITAL TELECOMMUNICATIONS PHILS., INC.

(D I G I T E L)
______________________________________________________________________________
(Company’s Full Name)
110 Eulogio Rodriguez Jr. Avenue, Bagumbayan 1110 Quezon City, Metro Manila
_____________________________________________________________________________
(Company’s Address)
(63-2) 397- 8888

_________________________________________
(Telephone Number)
December 31
_________________________________________
(Fiscal Year Ending)
(month & day)
SEC FORM 17-Q

_________________________________________
Form Type
_________________________________________
Amendment Designation (If applicable)
30 September 2007
_________________________________________
Period Ended Date
N.A.
________________________________________________________
(Secondary License Type and file Number)
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PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Our unaudited consolidated financial statements include the accounts of Digital Telecommunications
Phils., Inc. (Parent Company), and its wholly-owned subsidiaries, Digitel Mobile Phils., Inc., Digitel
Capital Philippines Ltd., and Digitel Information Technology Services, Inc. collectively referred to as
“DIGITEL” in this report.
Our financial statements, and financial information discussed herein, have been prepared on a
historical cost basis, except for certain derivative financial instruments that have been measured at
fair value.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (MD&A)
The following discussion and analysis of our financial condition and results of operations should be
read in conjunction with the accompanying unaudited consolidated financial statements and the
accompanying notes.
Our MD&A should not be considered as all inclusive, as it excludes unknown risks, uncertainties and
changes that may occur in the general economic, political and environmental condition after the
stated reporting period.
The financial information appearing in this report and in the accompanying unaudited consolidated
financial statements are presented in Philippine peso, the Company’s functional currency, and all
values are rounded to the nearest thousands, except when otherwise indicated.
OVERVIEW OF THE BUSINESS
Established on August 31, 1987, Digital Telecommunications Phils., Inc., the Parent Company,
is majority–owned by JG Summit Holdings Inc. or JGSHI, one of the largest and most diversified
conglomerates in the Philippines.
DIGITEL comprised of the following business segments:
• Wireline Services – Primarily provided through the Parent Company, it continues to

rank as second largest provider of fixed lines in the country with over 650,000 lines
installed throughout Luzon of which almost 450,000 are lines in service;
• Wireless Services – Provided through its wholly-owned subsidiary, Digitel Mobile
Phils., Inc., under the Sun Cellular brand using the latest in GSM technology in wireless
services;
• Data Services – A division under the Parent Company, DigitelOne offers access to
high-speed data transmission and internet services through domestic and international
leased lines, frame relay and dedicated internet service.
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DIGITEL’s voice products and services include the provisioning of local call, national and
international toll services, enhanced through DIGITEL’s suite of value added services, payphones and
prepaid phone cards via Digikard and DGMax brands. Existing foreign and domestic carrier
interconnection agreements enable sufficient transmission capacities for efficient and cost-effective
routing. Interconnection with Philippine-based and some international carriers involves the use of
Internet Protocol (IP).
In addition to wireline voice services, DIGITEL’s data division, DigitelOne, offers corporate
customers and consumers access to high-speed data transmission and internet services through
domestic and international leased line services, frame relay and dedicated internet service. In response
to future requirements for convergent technologies enabling simultaneous voice and data service
transmissions, the ongoing expansion of the highly successful Asymmetric Digital Subscriber Line
(ADSL) project addresses the growing demand for broadband access in both business and high-end
residential markets in Luzon.
DIGITEL Crossing, a joint venture between DIGITEL, East Asia Netcom Philippines, Inc. (a
wholly owned company of Asia Netcom) and Asia Netcom Philippines, Inc. (formerly Philippine
Crossing Land Corporation) was granted its franchise last November 2003 by Congress under Republic
Act No. 9235 to construct, install, establish, operate and maintain telecommunications systems
throughout the Philippines. It brings competitive and high speed capacities to the local telecoms
environment, thus enabling the growth of new businesses such as call centers, software design, and other
IT services that leverage the Philippines’ competitive advantage in the world economy. Together with
DigitelOne’s Luzon-wide broadband backbone, this joint venture will help spur wide-spread internet and
high-speed data usage familiarity around the country.
DIGITEL commercially launched its wireless service “SUN Cellular” on March 29, 2003,
which offers the latest in GSM technology. In October 2004, SUN Cellular pioneered the
unprecedented 24/7 Call and Text Unlimited (CTU) and made a huge impact on the market by virtue
of an innovative and better value service offering that spawned a phenomenal growth in its subscriber
base. With the subsequent launches of its product variants like Daylight Call and Text Unlimited,
Text Unlimited and Call Unlimited, it presented consumers with more choices to suit their various
lifestyle needs.
On December 28, 2005, the NTC awarded a third generation (3G) frequency allocation of 10
MHz to SUN Cellular after finding it legally, financially and technically qualified to undertake 3G
services. On January 31, 2006, SUN Cellular confirmed its choice of 3G bandwidth with the National
Telecommunications Commission (NTC).
On December 14, 2006, DIGITEL and SUN Cellular were registered with Board of
Investments (BOI) and are entitled to incentives on pioneer status as new operators of 3G
infrastructure and telecommunications facilities.
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Products and Services
Wireline Communications – Voice Services
DIGITEL offers a wide range of products and services to its customers which includes
DIGITEL Choice Plans, DGtxt Plus landline texting service, IDD and NDD Services, 108 and 109
Operator–Assisted Services, Domestic 1-800 Toll Free Services, Domestic 1-900 Premium Services,
Netdirect Dial-up Internet Service, Payphone Services, and Internet Data and Broadband Services.
Other products and services include the following.
¾ NETVantage DSL provides subscribers uninterrupted high-speed internet connection for

various Internet applications such as on-line gaming, e-learning, instant messaging, e-mail
and web surfing among others. It also serves as a transport for the VoIP service, which
gives customers lower IDD and NDD toll rates.
¾ MANGO or “Mobility Access Network for the Man on the Go” is a wireless internet-ready
landline service using the latest in Code Division Multiple Access (CDMA) fixed wireless
system technology. It is more than a landline because not only does it offer the perks of a
landline service but it also offers high speed internet service and the freedom to make calls
and access internet while on the move within one to five kilometers from the base station.
¾ DIGIKARD is DIGITEL’s hassle-free pre-paid phone card that gives subscriber convenient
access to phone, fax, and internet from any DIGITEL postpaid and prepaid landline phone,
including payphones.
¾ DGMAX IDD Prepaid Card is another prepaid service of DIGITEL that allows
international call either through DIGITEL’s postpaid lines, prepaid lines or payphones.
With as low as P3/minute to top international destinations, callers, especially families of
Overseas Filipino Workers, can now make frequent voice calls and engage in longer talk
time, breaking all affordability barriers.
¾ IP-VPN or Virtual Private Network is DIGITEL’s most reliable, flexible, scalable,

manageable, and cost effective wide-area multi-service network based on Multi-Protocol
Label Switching (MPLS) technology. This provides customers with the technology to
securely access private information on their corporate network over DIGITEL’s Internet
Protocol-enabled network or over a shared public infrastructure, such as the Internet. IP-
VPN can carry any type of IP Traffic with differentiated classes of service (CoS), thus, it is
well-suited for converged voice, data and video applications.
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¾ DIA or Dedicated Internet Access is DIGITEL’s service that continues to provide the
much-needed internet bandwidth requirements of large corporations and Business Process
Outsourcing (BPO) companies, particularly the Call Center industry. DIA keeps our
customers’ businesses on track, with reliable internet connectivity, allowing them to
communicate with their various offices and partners anywhere in the country and across the
world. Customers are able to complete purchase/selling or any other business transactions,
and even go on-line and check how their business is doing, through a real video-streaming
running over their internet facility.
Wireline Communications – Data
DIGITEL provides the following wireline data communications services to its subscribers
through its data services arm DigitelOne and through a joint venture, DIGITEL Crossing.
Data Services
¾ Leased Line provides point-to-point telecommunication line with a 24-hour link to the
business. It is an ideal tool for exchanging information in the form of data, voice, video or a
combination of the three, through terrestrial microwave copper cable or fiber optic
technology.
¾ Frame Relay Service is a Wide Area Network (WAN) communications technology that
provides the subscriber with a point-to-point or point-to-multi point dedicated connection.
¾ International Private Leased Circuit provides an international connectivity using a
dedicated circuit. Through the partnership with Asia Netcom, DIGITEL can connect
companies to major cities around the world.
¾ International Frame Relay – Working together with Asia Netcom, DIGITEL offers the
resources and expertise to meet the subscriber’s global telecommunication needs under a
single contract with exceptional services.
Internet Services
¾ Internet Access is a dedicated connection to the internet with the flexibility to grow with
subscriber’s business. This may either be:
• Premium Internet Service – designed for Internet Service Provider (ISP) clients who
demand the fastest connection to the internet backbone at a 1:1 bandwidth ratio
• The Corporate Internet Service – for corporate clients that have lower utilization
compared to ISPs, which may choose to avail of shared bandwidth for Corporate
Internet Service available at 2:1 and 4:1 bandwidth ratio.
¾ Peering Service is the arrangement of traffic exchange between ISPs. Larger ISPs with
their backbone networks agree to allow traffic from other large ISPs to pass through their
backbones so that local internet traffic does not need to pass through expensive bandwidth.
¾ Virtual Internet Presence allows the internet connection to become a secure data pipe
between regional sites. This service will offer ISP business establishments a Local Presence
without investing on expensive equipment, thus lowering total cost of operations compared
to opening up and maintaining their own internet equipment.
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Wireless Communications
SUN Cellular offers the latest in GSM technology, providing voice services (local, national,
international calling), messaging services (short text or multimedia messaging), outbound and inbound
international roaming (currently available in selected countries in Asia, Africa, Europe, and North and
South America), and value-added services available through SUN Cellular’s navigational menu called
“The Mall”.
Postpaid Service
The postpaid subscription plans of SUN Cellular offer fully consumable monthly service fees
for voice usage (including IDD calls). The range of plans has also proven to be an advantage as
consumers have a choice among the basic postpaid plans: Plan 350, Plan 600, Plan 1000, Plan 2000,
and Plan 3500, with the option for personalizing profiles, namely, I-Speak and I-Text:
¾I-Speak – This profile best describes people who frequently make voice calls. Subscribers
selecting this profile enjoy voice call rates of as low as PhP4.00 per minute on SUN-to-
SUN calls
¾I-Text – This profile is best suited to people who frequently send text messages. Subscribers
selecting this profile enjoy rates as low as PhP0.50 per SUN-to-SUN text message and
more free text allowance compared to the other plans.
In its commitment to provide subscribers innovative services at affordable prices, SUN

Cellular offers subscribers the following:
¾ Group Plans – Another innovation introduced by SUN in 2006 to further revolutionize the
affordable communicating lifestyle of its subscribers. Group Plan 699, Group Plan 899 and
Group Plan 999. Each plan allows the subscriber to get two to three postpaid lines with free
mobile phones and unlimited services for all lines for a shared monthly credit limit.
¾ Fixed Load Plan – This offering is basically an extension that allows postpaid subscribers
to avail of additional line subscription with free new phones and assign fixed monthly load
to the new prepaid line. This service offering aims to address the needs of families or small
businesses for convenience and budget control.
¾ SUN Bond Subscription – This is for students and customers who do not have the
necessary document requirements for a postpaid plan line application. Instead, a subscriber
pays the pre-determined deposit to get a post paid line with a free phone. The consumable
deposit would then be credited to the subscriber’s account in 24 equal monthly installments.
¾ IDD Service - Top 10 IDD service extends to the subscribers a reduced rate of $0.10 per
minute for IDD calls to selected countries.
¾ Call & Text Unlimited Service (CTU) – This is available to both Postpaid and Prepaid
subscribers which allows them to call and text Sun-to-Sun for unlimited number of times for
a certain number of days.
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Prepaid Service
SUN Cellular’s prepaid service is aimed at providing subscribers with the best-value choices
tailored to fit each user’s specific needs and wants. SUN Cellular prepaid reloads are available in
PhP50, PhP150, PhP300 and PhP500 denominations, in call cards and as low as PhP10 for electronic
reloads. Prepaid subscribers also have an option to choose between the I-Speak and I-Text profiles.
In support of SUN Cellular’s subscriber acquisition efforts, various products and services
were introduced such as the Call & Text Unlimited for 1-day, Text Unlimited for 1-day, P10 Regular
Load and P30 Top 10 IDD, all of which are available via Sun Xpress Load. These new products
further reinforced SUN Cellular’s position as an innovative mobile network service provider.
Currently in the market are various prepaid SIM card variants designed to address the needs of
its target market. These consist of: the Supreme SIM pre-loaded with Free 7 days Call & Text
Unlimited and 30 free texts to other networks; the Text Unlimited SIM pre-loaded with 4 days 24/7
Text Unlimited and free 30 minutes local intra-network voice calls per month for 3 months; the Power
Sim, pre-loaded with 24/7 Call & Text Unlimited valid for 4 days and 15 free texts to other networks;
and the Super Value SIM, pre-loaded with 24/7 Call & Text Unlimited valid for 2 days and 10 free
texts to other networks. All types of SIMs likewise come with free 20 inter-SMS on the 2nd to 12th
month provided that the subscriber topped-up at least P100 the previous month.
Value-Added Services
Aside from the unique menu-driven navigational tool called “The Mall”, SUN Cellular
introduced several other value-added services in 2006, such as:
¾ iMessenger - This is the first mobile instant messaging (IM) service that lets cellular phone
subscribers communicate with their online buddies on the four largest IM services - Yahoo!
Messenger, MSN Messenger, AOL Instant Messenger and ICQ. Just like SUN's other value-
packed products, iMessenger is offered on unlimited, time-based subscriptions that allow
subscribers to enjoy sending and receiving IMs without fear of exorbitant per-message
charges. Moreover, subscribers get their first day IM services for free!
¾ DialTunes – This is a service that allows subscribers to download "ringback tones" that
their callers hear before the call is connected. DialTunes make the voice-calling experience
fun and interesting as subscribers download songs, jokes and sound effects to their accounts.
This makes calling them an entertaining treat for their friends and associates.
¾ TxtBlitz - SUN also commenced a venture into corporate solutions with the introduction of
TxtBlitz, an easy-to-use and cost-effective way for businesses to send and receive text
messages to and from their local and international audiences, via a simple Internet-protocol
connection.
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Results of Operations
Provided below is a table summarizing revenue and expense contribution for the nine-month periods
September 30, 2007 and 2006, by each business segment:
For the nine months ended Wireless Wireline Voice Wireline Data
September 30, 2007 (in PhP 000s) Communication Communication Communication
Services Services Services Eliminations Total
Service and nonservice revenues 2,820,840 3,018,957 346,509 (117,782) 6,068,524

Operating expenses 3,020,843 1,518,468 144,684 (117,782) 4,566,213
Network-related and General expenses 2,398,712 1,354,450 137,181 (117,782) 3,772,561
Cost of sales 547,417 67,010 - - 614,427
Impairment losses and others 74,714 97,008 7,503 - 179,225
EBITDA (200,003) 1,500,489 201,825 - 1,502,311
Depreciation and amortization 521,853 1,572,550 92,022 - 2,186,425
EBIT (721,856) (72,061) 109,803 - (684,114)
Foreign exchange gain 570,499 2,081,109 9,562 - 2,661,170
Financing cost and other charges - net (290,974) (1,379,040) (2,157) - (1,672,171)
Earnings (loss) before tax (442,331) 630,008 117,208 - 304,885
Provision for (benefit from) income tax 510 536,525 (3,159) - 533,876
Net income (loss) (442,841) 93,483 120,367 - (228,991)
Segment assets * 30,445,336 57,849,151 2,194,972 (30,195,229) 60,294,230
Segment liabilities * 22,737,604 48,646,028 1,676,740 (17,332,255) 55,728,117
For the nine months ended Wireless Wireline Voice Wireline Data
September 30, 2006 (in PhP 000s) Communication Communication Communication
Service and nonservice revenues 2,192,553 3,478,602 281,766 (113,865) 5,839,056

Operating expenses 2,822,871 1,442,014 105,117 (113,865) 4,256,138
Network-related and General expenses 2,281,581 1,351,613 100,299 (113,865) 3,619,628
Cost of sales 488,771 26,670 - - 515,441
Impairment losses and others 52,520 63,731 4,819 - 121,070
EBITDA (630,318) 2,036,588 176,648 - 1,582,918
EBIT (1,104,156) 384,180 84,185 - (635,791)
Foreign exchange gain 173,129 1,530,345 17,811 - 1,721,285
Financing cost and other charges - net (184,659) (1,221,442) (4,259) - (1,410,359)
Earnings (loss) before tax (1,115,685) 693,083 97,737 - (324,864)
Provision for (benefit from) income tax (16,190) 573,717 (1,892) - 555,635
Net income (loss) (1,099,495) 119,366 99,629 - (880,500)
Segment assets * 22,140,994 59,092,596 2,230,936 (29,303,706) 54,160,820
Segment liabilities * 17,059,900 51,119,621 1,820,134 (19,040,732) 50,958,923
* Segment assets of the Digitel Group do not include net deferred tax assets while segment liabilities do not include income tax payable
and net deferred tax liabilities.
Digitel generated combined service and non-service revenues of P6,068.5 million during the
period or 3.9% higher than same period last year of P5,839.1 million.
Consolidated operating expenses for the nine-month ended September 30, 2007 reported at
P4,566.2 million, was 7.3% higher than the consolidated figure of P4,256.1 million for the same
period in 2006.
Network-related expenses increased by 21.9% or P369.1 million due largely to the aggressive
roll out activities undertaken in the wireless business during the period. General and administrative
expenses, however, were lower by 11.2% or P216.1 million on account of decreased utilities, outside
services and professional fees.
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As a result of the foregoing, DIGITEL registered a consolidated EBITDA of P1,502.3 million
for the nine-month ended September 30, 2007, lower by 5.1% against P1,582.9 million during the
same period in 2006 mainly due to higher network related expenses incurred this year.
Net loss decreased from P880.5 million in 2006 to P229.0 million in 2007 largely due to net
foreign exchange gain recognized in 2007 of P2,661.2 million against foreign exchange gain of
P1,721.3 million for the same period in 2006.
Wireline Voice
The wireline voice communication services registered service revenues of P3,019.0 million for
the nine months ended September 30, 2007. It posted a 13.2% decrease in revenues over last year’s
revenues of P3,478.6 million. This segment, being the traditional voice services in
telecommunication, is being challenged with the advent of new technology in voice communication
services which is now the preferred mode of communication by the public in general. The shift in
technology that easily connects people regardless of location affected the Company’s revenues from
international and domestic tolls. The international traffic is further dampened by the decreasing rates
and continued appreciation of the peso against the dollar. Notwithstanding the challenges, the wireline
voice communication services managed to curb the decline in revenues with the continued growth of
ADSL and wireless telephone with broadband services, known as MANGo. Compared to last year,
these services registered an increase of 70.0% over last year’s revenues.
The challenge in keeping up with the changing preference of the public to mobile phone requires
transformation in the fixed wireline segment. Digitel has endeavored to meet the challenge by moving
into new technologies, and shifting its priority to satisfying the needs of its subscribers for mobility and
accessibility with quality service. The ADSL service provides high speed internet connection for various
internet applications and serves as a transport for the VoIP service giving subscribers lower IDD and
NDD toll rates. The wireless landline service called MANGo provides mobility and internet access in
unserved and underserved areas using a wireless landline service and offers an innovative solution to the
growing needs of the public.
Operating expenses amounted to P1,518.5 million for the nine months ended September 30,
2007, or a 5.3% increase from last year’s figure of P1,442.0 million. The increase was mainly due to
higher network related expenses, cost of sales and provision for impairment losses in receivables offset
by lower general and administrative expenses. Cost containment measures are being undertaken to
prevent further erosion of EBITDA and adapt to the revenue level.
EBITDA decreased by P536.1 million or 26.3% primarily brought about by the decline in
service revenues by 13.2 %.
Wireline Data Communication
Revenues for wireline data communication services for the nine months ended September 30,
2007 amounted to P346.5 million posting an increase of 23.0% over the revenues of same period last
year of P281.8 million. The increase was driven by the demand of the call centers and BPOs for high
bandwidth data services and for high bandwidth transport services in the case of foreign and local
carriers. This was also driven by the offering of IP VPN service in the last quarter of 2006.
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With the continuous upgrade of its data network from the traditional frame relay and
Asynchronous Transfer Mode (ATM) - based network to the Multi-protocol Label Switching (MPLS)
technology, the wireline data communication services segment is able to offer IP VPN service to the
corporate market. Further, with the new Metro Ethernet service, the data segment of the business shall
provide cost efficient, truly reliable, high bandwidth communication solution, commonly required by
corporate accounts today.
Operating expenses amounted to P144.7 million for the nine months ended September 30,
2007, or a 37.6% increase from last year’s figure of P105.1 million. The increase was mainly due to
higher network related expenses, general and administrative expenses, and provision for impairment
losses in receivables.
EBITDA improved by P25.2 million or 14.3%, which is attributable to the rise in service
revenues by P64.7 million offset by the increase in operating expenses by P39.6 million.
Wireless
The wireless communications business posted an improvement in service and non-service

revenues of P2,820.8 million during the nine-month period ended September 30, 2007 from P2,192.6
million during the same period last year. Revenues from unlimited services which accounted for
61.0% of wireless net service revenues, improved significantly by P591.2 million or 51.0% against
revenues reported during the same period last year as our consumers experienced continuing
improvement in our network coverage as a result of aggressive network roll-outs.
During the period, Sun Cellular launched the following SIM variants which contributed to
significant growth in subscriber base by as much as 95.0%:
• Supreme SIM – includes free 7 days of unlimited call and text services and free
limited inter-SMS;*
• Power SIM – includes free 4 days of unlimited call and text services and limited inter-
SMS;*
• Super Value SIM – includes free 2 days of unlimited call and text services and limited
inter-SMS.*
*
Free limited inter-SMS on the 2nd to 12th month provided that the subscriber topped-up at least
P100 the previous month.
Non-service revenues from the wireless communications segment decreased by 94.7% brought
about by lower phonekit sales and higher discounts.
Operating expenses increased by 7.0% due mainly to increase in general and administrative
expenses, network-related expenses, cost of sales, and provision for impairment losses on receivables.
Accordingly, negative EBITDA in wireless business segment of P200.0 million during the
period ended September 30, 2007 decreased by 68.3% from P630.3 million during the same period in
2006.
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DIGITAL TELECOMMUNICATIONS PHILS., INC. AND SUBSIDIARIES
Financial Highlights and Key Performance Indicators
September 30, 2007 December 31, 2006 Increase (Decrease)

(Unaudited) (Audited) Amount %
(in PhP 000s, except for exchange rates
and earnings (loss) per common share)
Consolidated Balance Sheets
Total assets 61,272,838 56,784,998 4,487,840 8

Property and equipment - net 53,173,096 49,817,166 3,355,930 7
Cash and cash equivalents 414,832 332,212 82,620 25
Total Equity 1,667,956 1,896,947 (228,991) (12)
Interest-bearing financial liabilities 18,280,460 17,870,081 410,379 2
Notes Payable and long-term debt 17,172,686 16,748,310 424,376 3
Net debt to equity ratio(1) 10x 9x - -
10.05 8.65
Nine Months Ended September 30, Increase (Decrease)
2007 2006 Amount %
(Unaudited)
Consolidated Statements of Income
Revenues 8,734,857 7,808,490 926,367 12

Cost and Expenses 8,429,972 8,133,354 296,618 4
Income (Loss) before income tax 304,885 (324,864) 629,749 194
Net loss (228,991) (880,500) 651,509 74
Net loss margin -3% -11%
Loss per common share - basic (0.0360) (0.1385) 0.1025 74
Consolidated Statements of Cashflows
Net cash provided by (used in) operating activities (815,544) 1,884,409 (2,699,953) (143)
Net cash used in investing activities 6,299,141 3,803,576 2,495,565 66
Capital Expenditures 5,535,447 3,384,169 2,151,278 64
Net cash provided by financing activities 7,197,305 1,899,587 5,297,718 279
Exchange Rates Php per US$

September 30, 2007 45.040
December 31, 2006 49.045
September 30, 2006 50.249
(1) Net debt is derived by deducting cash and cash equivalents from long-term debt.
Financial Position
Consolidated total assets increased to P61,272.8 million as at end of third quarter of 2007,
from P56,785.0 million at the end of 2006.
Cash and cash equivalents increased by 24.9% from P332.2 million at the end of 2006 to
P414.8 million as at end of third quarter 2007 due to cash inflow from bank loans and advances from
affiliates relative to acquisition of assets and settlement of obligations.
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Net receivables increased by P104.6 million or 7.1% mainly due to increased billings from
subscribers and advances for network-related purchases during the period, particularly in the wireless
business.
Due from related parties decreased by P47.8 million or 53.0% mainly due to settlements made
by the parties.
Derivative assets comprising mainly of derivatives embedded in foreign currency

denominated bonds and purchase orders significantly from network-related projects amounted to
P975.2 million and P939.8 million as of September 30, 2007 and December 31, 2006, respectively.
Prepayments and other current assets increased by P105.2 million or 61.4% due mainly to
prepayments for spectrum user’s fee and insurance on electronic equipments.
Property and equipment, net of accumulated depreciation, amounted to P53,173.1 million as

of September 30, 2007. Additions to property and equipment amounted to P5,535.4 million during the
period, as a result of DIGITEL’s continuing investments in telecommunications facilities, particularly
in the wireless business segment. These investments were funded through bank financing and
advances from affiliates.
Deferred income tax assets increased by P102.0 million or 11.6% due to tax effect arising
from the provision for doubtful accounts, accrual of retirement benefits, NOLCO, unearned revenues,
MCIT, and accretion of asset retirement obligation.
Total input value added tax reported at P2,219.7 million showed an increase of P399.5 million
or 22.0% over 2006 figure due mainly to additional network-related acquisitions.
Other noncurrent assets - net increased by P359.4 million or 34.7% due to additional deferred
subsidies on handsets for the wireless telephone, and customer premise equipment for internet services
and to the advance payments made for the purchase of assets.
Accounts payable and accrued expenses decreased by P1,706.9 million or 15.5% mainly due
to settlement of third party obligations offset by the increase in trade accounts and accruals on various
operating expenses.
Deferred income tax liabilities amounted to P3,876.8 million as of September 30, 2007,
comprising mainly of tax effects arising from unrealized foreign exchange gain and market valuation
gain on derivative instruments.
Long term debts (current and non-current) aggregating to P5,588.1 million as of September 30,
2007 and P5,151.8 million at the end of 2006 consisted of suppliers’ credits, bank financing and
minimum capacity purchase agreement. The increase of P436.3 million or 8.5% was due to additional
borrowings to finance DIGITEL’s continuing investments in telecommunications infrastructure.
DIGITEL obtained financing from foreign and local affiliates to fund its network projects and
settle third party obligations. As of September 30, 2007 and December 31, 2006, outstanding balance
was recorded at P24,049.6 million and P20,813.0 million, respectively.
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Other noncurrent liabilities increased by 109.9% or P2,149.2 million due mainly to higher
accrual of network-related project costs recorded in the wireless business during the period.
Capital stock stood at P8,975.7 million as of September 30, 2007. DIGITEL sustained an
accumulated deficit of P7,307.8 million as of September 30, 2007 and P7,078.8 million as of
December 31, 2006.
DIGITEL’s financing requirements were covered by both internally-generated funds and

external borrowings. Consolidated net cash flow used for operating activities during the nine-month
period ended September 30, 2007 amounted to P815.5 million in contrast to P1,884.4 million net cash
flow provided during the same period in 2006. Net cash generated from financing activities amounted
to P7,197.3 million for the nine months ended September 30, 2007 against P1,899.6 million during the
same period last year. These finances were used to fund continuing network expansion significantly in
the wireless business with total investing cash flows of P6,299.1 million and P3,803.6 million in 2007
and 2006, respectively and to settle third party obligations.
14
15
AND SUBSIDIARIES
Consolidated Financial Statements

September 30, 2007 and December 31, 2006
and Nine-month Periods Ended September 30, 2007 and 2006
16
CONSOLIDATED BALANCE SHEETS
September 30 December 31
2007 2006
(Unaudited) (Audited)
(In Thousand Pesos)
ASSETS
Current Assets
Cash and cash equivalents (Note 3) P 414,832 P 332,212
Receivables - net (Note 4) 1,572,199 1,467,640
Inventories (Note 5) 225,203 234,229
Input value added tax - net 1,064,490 962,467
Due from related parties 42,352 90,150
Derivative assets 975,187 939,783
Prepayments and other current assets 276,728 171,503
Total Current Assets 4,570,991 4,197,984
Noncurrent Assets
Property and equipment - net (Note 6) 53,173,096 49,817,166
Deferred income tax assets 978,608 876,629
Input value added tax 1,155,173 857,674
Other noncurrent assets - net (Note 7) 1,394,970 1,035,545
Total Noncurrent Assets 56,701,847 52,587,014
P 61,272,838 P 56,784,998
LIABILITIES AND EQUITY

Current Liabilities
Accounts payable and accrued expenses (Note 8) P 9,292,588 P 10,999,530
Income tax payable - 2,744
Current portion of long-term debt (Note 10) 1,107,774 1,121,771
Total Current Liabilities 10,400,362 12,124,045
Noncurrent Liabilities
Deferred income tax liabilities 3,876,765 3,246,508
Bonds payable (Note 9) 12,692,319 12,718,295
Long-term debt - net of current portion (Note 10) 4,480,367 4,030,015
Due to related parties 24,049,598 20,812,950
Other noncurrent liabilities (Note 11) 4,105,471 1,956,238
Total Noncurrent Liabilities 49,204,520 42,764,006
Total Liabilities 59,604,882 54,888,051
Equity (Note 12)
Paid-up capital 8,975,749 8,975,749
Deficit (7,307,793) (7,078,802)
Total Stockholders' Equity 1,667,956 1,896,947
P 61,272,838 P 56,784,998
Note: Accounting principles and methods of computation used in the annual audited financial statements
as of December 31, 2006 were also applied in the interim financial statements as of September 30, 2007.
17
CONSOLIDATED STATEMENTS OF INCOME
For the Nine Months Ended For the Three Months Ended
September 30 September 30
2007 2006 2007 2006
( Unaudited ) ( Unaudited )
(In Thousand Pesos, Except Loss Per Share Figures)
REVENUE
Service revenue P 6,066,502 P 5,800,543 P 2,104,414 P 1,856,346
Foreign exchange gain 2,661,170 1,721,285 955,816 1,973,873
Nonservice revenue 2,022 38,513 (15,859) 11,167
Other income - net (Note 13) 5,163 248,149 2,943 1,172
8,734,857 7,808,490 3,047,314 3,842,558
COSTS AND EXPENSES

Depreciation and amortization 2,186,425 2,218,708 717,335 755,559
Network-related expenses (Note 14) 2,055,413 1,686,384 924,375 611,425
General and administrative expenses (Note 15) 1,717,148 1,933,244 409,932 616,583
Financing cost and other charges (Note 16) 1,677,334 1,658,508 517,095 537,426
Cost of sales 614,427 515,441 218,201 159,813
Impairment losses and others 179,225 121,069 81,371 36,239
8,429,972 8,133,354 2,868,309 2,717,044
INCOME (LOSS) BEFORE TAX 304,885 (324,864) 179,005 1,125,513
PROVISION FOR INCOME TAX 533,876 555,635 110,473 562,934
NET INCOME (LOSS) P (228,991) P (880,500) P 68,532 P 562,579
EARNINGS (LOSS) PER SHARE (Note 18) P (0.0360) P (0.1385) P 0.0108 P 0.0885
as of December 31, 2006 were also applied in the interim financial statements as of September 30, 2007 and 2006.
18
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited) For the Period Ended September 30, 2007

Paid-up Capital
Additional
Capital Paid-in Total
Stock Capital Total Deficit Equity
(In Thousand Pesos)
Balances as of December 31, 2006 P6,356,976 P2,618,773 P8,975,749 (P7,078,802) P1,896,947
Net loss during the period – – – (228,991) (228,991)
Balances as of September 30, 2007 P6,356,976 P2,618,773 P8,975,749 (P7,307,793) P1,667,956
(Unaudited) For the Period Ended September 30, 2006

Paid-up Capital
Additional
Capital Paid-in Total
Stock Capital Total Deficit Equity
(In Thousand Pesos)
Balances as of December 31, 2005 P6,356,976 P2,618,773 P8,975,749 (P6,421,184) P2,554,565
Net loss during the period – – – (880,500) (880,500)
Balances as of September 30, 2006 P6,356,976 P2,618,773 P8,975,749 (P7,301,684) P1,674,065
19
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months ended

September 30
2007 2006
(In Thousand Pesos)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss P (228,991) P (880,500)
Adjustments for:
Depreciation and amortization on property and equipment 2,186,425 2,218,708
Foreign exchange gain - unrealized (2,456,826) (1,747,517)
Interest expense 1,592,941 1,421,459
Amortization on deferred subsidies 457,803 307,849
Impairment losses on trade and other receivables 179,226 68,550
Amortization of debt issuance cost 56,016 65,498
Market valuation gain on derivative instruments (43,000) -
Provision for income tax deferred 528,278 553,122
Interest income (10,017) (249,434)
Accretion of asset retirement obligation 19,381 229
Operating income before changes in operating assets and liabilities 2,281,236 1,757,964
Changes in operating assets and liabilities:
Decrease (increase) in:
Receivables (258,549) (109,837)
Inventories 9,715 44,472
Input value-added tax and prepayments (504,746) (286,538)
Increase (decrease) in:
Accounts payable and accrued expenses (2,069,363) 504,116
Net cash generated from(used in) operations (541,707) 1,910,177
Interest received 8,107 11,317
Income taxes paid (2,744) (7,267)
Interest paid (279,200) (29,818)
Net cash provided by (used in) operating activities (815,544) 1,884,409
CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property and equipment (5,535,447) (3,384,169)
Increase in:
Due from related parties 53,535 (2,957)
Other noncurrent assets (817,229) (416,450)
Net cash used in investing activities (6,299,141) (3,803,576)
CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from long-term liabilities 1,774,667 1,061,363
Payment of long-term liabilities (1,050,772) (678,166)
Increase (decrease) in:
Other noncurrent liabilities 2,129,852 (2,797)
Due to related parties 4,343,558 1,519,187
Net cash provided by financing activities 7,197,305 1,899,587
NET INCREASE (DECREASE) IN CASH AND CASH

EQUIVALENTS 82,620 (19,580)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF THE PERIOD 332,212 477,842
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD P 414,832 P 458,262
as of December 31, 2006 were also applied in the interim financial statements as of September 30, 2007 and 2006.
20
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Corporate Information
Digital Telecommunications Phils., Inc. (the Parent Company) is incorporated in the Philippines
and enfranchised to provide domestic and international telecommunications services nationwide.
The Company’s registered office address is URC Compound, 110 E. Rodriguez, Jr. Avenue,
Bagumbayan, Quezon City.
The ultimate parent of Digital Telecommunications Phils., Inc. and Subsidiaries (the Group) is JG
Summit Holdings, Inc. (JGSHI).
The Parent Company owns 100% of the following companies:
• Digitel Mobile Phils., Inc. (DMPI) which is incorporated in the Philippines and enfranchised
under Republic Act (RA) 9180 to construct, install, establish, operate and maintain wire
and/or wireless telecommunications systems throughout the Philippines.
• Digitel Capital Philippines Ltd. (DCPL) which is incorporated in the British Virgin Islands to
engage in any activity allowed under any law of the British Virgin Islands.
• Digitel Information Technology Services (DITSI), Inc. which is incorporated in the

Philippines to provide internet access and high-speed data transmission to corporate and
individual customers. DITSI, however, became dormant following the decision of the Board
of Directors (BOD) to integrate the operations of DITSI into the Parent Company.
The Parent Company is a grantee of various authorizations from the National Telecommunications
Commission (NTC) as follows: (1) Certificate of Public Convenience and Necessity (CPCN) for
an international gateway facility (IGF) in Binalonan, Pangasinan and Quezon City; (2) provisional
authority (PA) to install, operate, maintain and develop telecommunications facilities in Regions I
to V, including the facilities leased from the Department of Transportation and Communication
(DOTC), and to provide at least 925,000 additional lines within 10 years; (3) PA to construct,
install, operate and maintain a nationwide Cellular Mobile Telephone System (CMTS) using
Global System for Mobile (GSM) and/or Code Division Multiple Access (CDMA) technology;
and (4) CPCN for local exchange carrier services in Valenzuela, Malabon and Quezon City.
The Parent Company was awarded a 30-year exclusive contract by DOTC to manage, operate,
develop and rehabilitate certain telecommunications facilities owned by DOTC.
The Parent Company is registered with the Board of Investments (BOI) and is entitled to (a)
incentives on a pioneer and nonpioneer status as a new operator of telecommunication systems on
nationwide CMTS-GSM communication and as an expanding operator of public
telecommunications services and IGF-2, respectively and (b) incentives on a pioneer status as a
new operator of infrastructure and telecommunications facilities [i.e. third generation (3G)
telecommunications system].
21
On August 28, 2003, the NTC approved the assignment to DMPI of the PA to construct, install,
operate and maintain a nationwide CMTS using GSM and/or CDMA technology.
On December 28, 2005, the NTC awarded a 3G frequency assignment to DMPI after finding it
legally, financially and technically qualified to undertake 3G services. On January 3, 2006, DMPI
confirmed its choice of 3G bandwidth with the NTC.
2. Summary of Significant Accounting Policies
Basis of Financial Statement Preparation

The accompanying consolidated financial statements of the Group have been prepared on a
historical cost basis, except for certain derivative financial instruments that have been measured at
fair value.
The consolidated financial statements of the Group are presented in Philippine peso, the Group’s
functional currency, and all values are rounded to the nearest thousands, except when otherwise
indicated.
Statement of Compliance
The consolidated financial statements of the Group have been prepared in accordance with
Philippine Financial Reporting Standards (PFRS).
Basis of Consolidation
The accompanying consolidated financial statements include the accounts of the Parent Company,
DMPI, DCPL and DITSI.
The consolidated financial statements are prepared using uniform accounting policies for like
transactions and other events in similar circumstances. All significant intercompany transactions
and balances, including intercompany profits and unrealized profits and losses, are eliminated in
the consolidation.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group, and
continue to be consolidated until the date that such control ceases.
Significant Accounting Policies
Revenue Recognition
The Group provides wireless services and wireline voice and data communication services.
Revenue is recognized at the time of delivery of the products or services, and the collectibility is
reasonably assured.
Service revenue includes the value of all telecommunications services provided, net of free usage
allocations and discounts. Revenue is recognized when earned, and are net of the share of other
foreign and local carriers and content providers, if any, under existing correspondence and
interconnection and settlement agreements.
22
Revenue is stated at amounts billed or invoiced and accrued to subscribers or other carriers and
content providers, taking into consideration the bill cycle cut-off (for postpaid subscribers), and
charged against preloaded airtime value (for prepaid subscribers), and excludes value-added tax
(VAT) and overseas communication tax.
Service revenue
The Group’s service revenue includes the following:
• Subscribers
Revenue principally consists of: (1) per minute airtime and toll fees for local, domestic and
international long distance calls in excess of free call allocation, less prepaid reload discounts
and interconnection fees; (2) revenue from value added services such as short messaging
services (SMS) in excess of free SMS and multimedia messaging services (MMS), content
downloading and infotext services, net of payout to other foreign and local carriers and
content providers; (3) inbound revenue from other carriers which terminate their calls to the
Group’s network; (4) revenue from international roaming services; (5) fixed monthly service
fees (for postpaid wireless subscribers) and prepaid subscription fees for discounted
promotional calls and SMS; and (6) proceeds from sale of phone kits, subrscribers’
identification module (SIM) packs and other phone accessories.
Postpaid service arrangements include fixed monthly charges which are recognized over the
subscription period on a pro-rata basis. Telecommunications services provided to postpaid
subscribers are billed throughout the month according to the billing cycles of subscribers. As
a result of billing cycle cut-off, service revenue earned but not yet billed at end of month are
estimated and accrued based on actual usage.
Proceeds from sale of prepaid cards are initially recognized as unearned revenue shown under
Accounts Payable and Accrued Expenses account in the consolidated balance sheet. Revenue
is realized upon actual usage of the airtime value of the card, net of free service allocation.
The unused value of prepaid cards is likewise recognized as revenue upon expiration.
Interconnection fees and charges arising from the actual usage of prepaid cards are recorded as
incurred.
23
• Traffic
Inbound revenue and outbound charges are based on agreed transit and termination rates with
other foreign and local carriers and content providers. Inbound revenue represents settlements
received for traffic originating from telecommunications providers that are sent through the
Group’s network, while outbound charges represent settlements to telecommunications
providers for traffic originating from the Group’s network and settlements to providers for
contents downloaded by subscribers. Both the inbound revenue and outbound charges are
accrued based on actual volume of traffic monitored by the Group from the switch.
Adjustments are made to the accrued amount for discrepancies between the traffic volume per
the Group’s records and per records of other carriers. The adjustments are recognized as these
are determined and are mutually agreed-upon by the parties. Uncollected inbound revenue are
recorded as receivables from connecting carriers under Receivables - net account in the
consolidated balance sheet, while unpaid outbound charges are recorded as payables to
connecting carriers under Accounts Payable and Accrued Expenses account in the
consolidated balance sheet.
Nonservice revenue
Proceeds from sale of phone kits and SIM cards/packs received from certain mobile subscribers
are recognized upon receipt and are included under Nonservice Revenue account in the
consolidated statement of income.
Other revenue
Interest is recognized as it accrues (using the effective interest method that is the rate that exactly
discounts estimated future cash receipts through the expected life of the financial instrument to the
net carrying amount of the financial asset).
Deferred Subsidies
Subscriber acquisition costs pertaining to postpaid subscription, which primarily include handset
and phone kit subsidies, are deferred and amortized over the base contract period, which ranges
from 18 to 24 months from the date in which they are incurred. Deferred subsidies are shown
under Other Noncurrent Assets account in the consolidated balance sheet. The related
amortizations of subscriber acquisition costs are charged against current operations.
The Group performs an overall realizability test, in order to support the deferral of the subscriber
acquisition costs. An overall realizability test is done by determining the minimum contractual
revenue after deduction of direct costs associated with the service contract over the base contract
period. Costs are deferred and amortized, if there is a nonrefundable contract or a reliable basis
for estimating net cash inflows under a revenue-producing contract which exists to provide a basis
for recovery of incremental direct costs.
Cash and Cash Equivalents

Cash includes cash on hand and in banks. Cash equivalents are short-term, highly liquid
investments that are readily convertible to known amounts of cash with original maturities of three
months or less from dates of placement and that are subject to an insignificant risk of changes in
value.
24
Loans and receivables
Loans and receivables are nonderivative financial assets with fixed or determinable payments and
fixed maturities that are not quoted in an active market. They are not entered into with the
intention of immediate or short-term resale, and are not classified as other financial assets held for
trading, designated as available-for-sale (AFS investments or financial assets designated at fair
value through profit and loss (FVPL).
This accounting policy applies primarily to the Group’s trade and other receivables.
Trade receivables are recognized initially at fair value, which normally pertains to the billable
amount. After initial measurement, receivables are subsequently measured at amortized cost using
the effective interest rate method, less any allowance for impairment losses. Amortized cost is
calculated by taking into account any discount or premium on the issue and fees that are an
integral part of the effective interest rate. Penalties, termination fees and surcharges on past due
accounts of postpaid subscribers are recognized as revenue upon collection. The losses arising
from impairment of trade and other receivables are recognized under the Impairment Losses and
Others account in the consolidated statement of income. The level of allowance for impairment
losses is evaluated by management on the basis of factors that affect the collectibility of accounts.
Impairment of Financial Assets

The Group assesses at each consolidated balance sheet date whether there is objective evidence that a
financial asset or group of financial assets is impaired.
• Assets carried at amortized cost
If there is objective evidence that an impairment loss on financial assets carried at amortized
cost (i.e. receivables) has been incurred, the amount of the loss is measured as the difference
between the asset’s carrying amount and the present value of estimated future cash flows
discounted at the asset’s original effective interest rate. Time value is generally not
considered when the effect of discounting is not material. The carrying amount of the asset is
reduced through the use of an allowance account. The amount of the loss shall be recognized
in the consolidated statement of income.
The Group first assesses whether objective evidence of impairment exists individually for
financial assets that are individually significant, and individually or collectively for financial
assets that are not individually significant. If it is determined that no objective evidence of
impairment exists for an individually assessed financial asset, whether significant or not, the
asset is included in a group of financial assets with similar credit risk characteristics and that
group of financial assets is collectively assessed for impairment. Assets that are individually
assessed for impairment and for which an impairment loss is or continues to be recognized are
not included in a collective assessment of impairment.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can
be related objectively to an event occurring after the impairment was recognized, the
previously recognized impairment loss is reversed. Any subsequent reversal of an impairment
loss is recognized in the consolidated statement of income to the extent that the carrying value
of the asset does not exceed its amortized cost at the reversal date.
25
The Group performs a regular review of the age and status of these accounts, designed to
identify accounts with objective evidence of impairment and provide the appropriate
allowance for impairment losses. The review is accomplished using a combination of specific
and collective assessment approaches, with the impairment losses being determined for each
risk grouping identified by the Group.
(a) Subscribers
Full allowance is provided for trade receivables from permanently disconnected wireless
and wireline subscribers. Permanent disconnections are made after a series of collection
steps following nonpayment by postpaid subscribers. Such permanent disconnections
generally occur within a predetermined period from statement date.
Effective January 1, 2005, the allowance for impairment losses is determined based on the
results of the net flow to write-off methodology. Net flow tables are derived from
account-level monitoring of subscriber accounts between different age brackets, from
current to 1 day past due to 120 days past due. The net flow to write-off methodology
relies on the historical data of net flow tables to establish a percentage (net flow rate) of
subscriber receivables that are current or in any state of delinquency as of reporting date
that will eventually result in write-off. The allowance for impairment losses is then
computed based on the outstanding balances of the receivables as of consolidated balance
sheet date and the net flow rates determined for the current and each delinquency bracket.
For active residential and business wireline voice subscribers, full allowance is generally
provided for outstanding receivables that are past due by 90 and 120 days, respectively.
Full allowance is likewise provided for receivables from wireline data corporate accounts
that are past due by 120 days.
Regardless of the age of the account, additional impairment losses are also made for
wireless and wireline accounts specifically identified to be doubtful of collection when
there is information on financial incapacity after considering the other contractual
obligations between the Group and the subscriber.
Prior to January 1, 2005, the Group made use of percentages as set up by management to
be applied on the trade receivables. A review of the aging and status of trade receivables,
designed to identify accounts to be provided with allowance, is performed regularly.
(b) Traffic
Provisions for impairment losses are made for accounts specifically identified to be
doubtful of collection regardless of the age of the account.
26
Inventories
Inventories are valued at the lower of cost and net realizable value (NRV). NRV is the estimated
selling price in the ordinary course of business less the estimated costs necessary to make the sale.
NRV for handsets and accessories, and wireline telephone sets is the selling price in the ordinary
course of business less direct costs to sell, while NRV for SIM packs, call cards, spare parts and
supplies consists of the related replacement cost. In determining the NRV, the Group deducts
from cost 100% of the carrying value of slow-moving items and nonmoving items for more than
one year. Cost is determined using the moving average method.
Property and Equipment

Property and equipment are carried at cost less accumulated depreciation, amortization and
impairment losses, if any.
The initial cost of an item of property and equipment comprises of its purchase price and any cost
attributable in bringing the asset to its intended location and working condition. Cost also
includes: (a) interest and other financing charges on borrowed funds used to finance the
acquisition of property and equipment to the extent incurred during the period of installation and
construction; and (b) asset retirement obligations (ARO) specifically for property and equipment
installed/constructed on leased properties.
Subsequent costs are capitalized as part of property and equipment only when it is probable that
future economic benefits associated with the item will flow to the Group and the cost of the item
can be measured reliably. All other repairs and maintenance are charged against current
operations as incurred.
Projects under construction are transferred to the related Property and Equipment account when
the construction or installation and related activities necessary to prepare the property and
equipment for their intended use are completed, and the property and equipment are ready for
service.
Depreciation and amortization of property and equipment commence, once the property and
equipment are available for use and are computed using the straight-line method over the
estimated useful lives (EUL) of the assets regardless of utilization.
The EUL of property and equipment of the Group follows:
Telecommunications equipment:
Tower 15 years
Switch 10 to 15 years
Outside plant facilities 10 to 20 years
Distribution dropwires 5 years
Cellular facilities and others 3 to 10 years
Buildings 25 years
Leasehold improvements 5 years or lease term whichever is shorter
Investment in cable systems 15 years
Facilities under finance lease 15 years
Vehicle and work equipment 5 to 15 years
27
The EUL of property and equipment are reviewed annually based on expected asset utilization as
anchored on business plans and strategies that also consider expected future technological
developments and market behavior to ensure that the period of depreciation and amortization is
consistent with the expected pattern of economic benefits from items of property and equipment.
When an item or property and equipment is retired or otherwise disposed of, the cost and the
related accumulated depreciation, amortization and impairment losses, if any, are removed from
the accounts and any resulting gain or loss is credited to or charged against current operations.
Asset Retirement Obligation

The Group is legally required under various lease contracts to restore leased property to its
original condition and to bear the cost of dismantling and deinstallation at the end of the contract
period. The Group estimates the costs of the obligations and capitalizes the present value of such
costs as part of the balance of the related Property and Equipment accounts which are depreciated
on a straight-line basis over the EUL of the related property and equipment or the contract period,
whichever is shorter.
Debt Issuance Costs

Debt issuance costs were amortized using the effective interest method and unamortized debt
issuance costs are offset against the related carrying value of the loan in the consolidated balance
sheet. When a loan is paid, the related unamortized debt issuance costs at the date of repayment
are charged against current operations (see accounting policy on Financial Instruments).
Prior to January 1, 2005, upfront fees and other related expenses incurred in connection with loan
drawings are capitalized by the Group, as part of the cost of the related projects and are amortized
using the straight-line method over the term of the loan following the settlement of said projects.
Income Taxes
Current tax
Current tax assets and liabilities for the current and prior periods are measured at the amount
expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used
to compute the amount are those that are enacted or substantially enacted as of the consolidated
balance sheet date.
Deferred income tax

Deferred income tax is provided using the balance sheet liability method on all temporary
differences, with certain exceptions, at the consolidated balance sheet date between the tax bases
of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognized for all taxable temporary differences, with certain
exceptions. Deferred income tax assets are recognized for all deductible temporary differences
with certain exceptions, and carryforward benefits of unused tax credits from excess minimum
corporate income tax (MCIT) over regular corporate income tax and unused net operating loss
carryover (NOLCO), to the extent that it is probable that taxable income will be available against
which the deductible temporary differences and carryforward benefits of unused tax credits from
excess MCIT and unused NOLCO can be utilized.
28
Deferred income tax assets are not recognized, when it arises from the initial recognition of an
asset or liability in a transaction that is not a business combination, and at the time of transaction,
affects neither the accounting income nor taxable income or loss. Deferred income tax liabilities
are not provided on nontaxable temporary differences associated with investments in domestic
subsidiaries and interests in joint ventures. With respect to investments in foreign subsidiaries,
deferred income tax liabilities are recognized except where the timing of the reversal of the
temporary differences can be controlled and it is probable that the temporary difference will not
reverse in the foreseeable future.
The carrying amounts of deferred income tax assets are reviewed at each consolidated balance
sheet date and reduced to the extent that it is no longer probable that sufficient taxable income will
be available to allow all or part of the deferred income tax assets to be utilized. Unrecognized
deferred income tax assets are reassessed at each consolidated balance sheet date, and are
recognized to the extent that it has become probable that future taxable income will allow the
deferred income tax asset to be recognized.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to
the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that
have been enacted or substantively enacted as of consolidated balance sheet date.
Provisions
Provisions are recognized when: (a) the Group has a present obligation (legal or constructive) as a
result of a past event; (b) it is probable (i.e. more likely than not) that an outflow of resources
embodying economic benefits will be required to settle the obligation; and (c) a reliable estimate
can be made of the amount of the obligation. Provisions are reviewed at each consolidated
balance sheet date and adjusted to reflect the current best estimate. If the effect of the time value
of money is material, provisions are determined by discounting the expected future cash flows at a
pre-tax rate that reflects current market assessment of the time value of money and, where
appropriate, the risks specific to the liability. Where discounting is used, the increase in the
provision due to the passage of time is recognized as an interest expense in the consolidated
statement of income. Where the Group expects a provision to be reimbursed, the reimbursement is
recognized as a separate asset but only when the reimbursement is virtually certain.
Borrowing Costs
Borrowing costs are recognized as expense when incurred.
Borrowing costs are capitalized if these are directly attributable to the acquisition, construction or
production of a qualifying asset. Capitalization of borrowing costs commences when the activities
for the asset’s intended use are in progress and expenditures and borrowing costs are being
incurred. Borrowing costs are capitalized until the assets are ready for their intended use. These
costs are amortized using the straight-line method over the EUL of the related property and
equipment. If the resulting carrying amount of the asset exceeds its recoverable amount, an
impairment loss is recognized. Borrowing costs include interest charges and other related
financing charges incurred in connection with the borrowing of funds. Premiums on long-term
debt are included under the Long-term Debt account in the consolidated balance sheet and are
amortized using the effective interest rate method.
29
Leases
The determination of whether an arrangement is, or contains a lease, is based on the substance of
the arrangement at inception date, and requires an assessment of whether the fulfillment of the
arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a
right to use the asset. A reassessment is made after inception of the lease only if one of the
following applies:
(a) there is a change in contractual terms, other than a renewal or extension of the arrangement;
(b) a renewal option is exercised or an extension granted, unless that term of the renewal or
extension was initially included in the lease term;
(c) there is a change in the determination of whether fulfillment is dependent on a specified asset;
or
(d) there is a substantial change to the asset.
Where a reassessment is made, lease accounting shall commence or cease from the date when the
change in circumstances gave rise to the reassessment for any of the scenarios above, and at the
date of renewal or extension period for the second scenario.
Group as lessee
Finance leases, which transfer to the Group substantially all the risks and benefits incidental to
ownership of the leased item, are capitalized at the inception of the lease at the fair value of the
leased property or, if lower, at the present value of the minimum lease payments and included
under Property and Equipment account in the consolidated balance sheet, with the corresponding
liability to the lessor included under Long-term Debt account in the consolidated balance sheet.
Lease payments are apportioned between the finance charges and reduction of the lease liability so
as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges
are charged directly as interest expense.
Capitalized leased assets are depreciated over the shorter of the EUL of the assets and the
respective lease terms.
Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are
classified as operating leases. Operating lease payments are recognized as an expense in the
consolidated statement of income on a straight-line basis over the lease term.
Selling, Advertising and Promotions Expenses

Selling, advertising and promotions expenses are charged against current operations as incurred.
Foreign Currency Transactions

The functional and presentation currency of the Group is the Philippine Peso. Transactions
denominated in foreign currencies are recorded in Philippine Peso based on the exchange rates
prevailing at the transaction dates. Foreign currency-denominated monetary assets and liabilities
are translated to Philippine Peso at exchange rate prevailing at the consolidated balance sheet date.
30
Foreign exchange differentials between rate at transaction date, and rate at settlement date or
balance sheet date of foreign currency-denominated monetary assets or liabilities are credited to or
charged against current operations.
Loss Per Share

Loss per share is computed by dividing net loss applicable to common stock by the weighted
average number of common shares issued and outstanding during the year.
Segment Reporting
The Group’s major operating business units are the basis upon which the Group reports its primary
segment information. The Group’s business segments consist of: (1) wireless communication
services, (2) wireline voice communication services, and (3) wireline data communication
services. The Group generally accounts for inter-segment revenue and expenses at agreed transfer
prices.
Contingencies
Contingent liabilities are not recognized in the consolidated financial statements. They are
disclosed unless the possibility of an outflow of resources embodying economic benefits is
remote. Contingent assets are not recognized in the consolidated financial statements but
disclosed when an inflow of economic benefits is probable.
3. Cash and Cash Equivalents
This account consists of:
2007 2006
(In Thousand Pesos)
Cash on hand and in banks P97,473 =233,247
P
Money market placements 317,359 98,965
P414,832 =332,212
P
Cash in banks earns interest at the respective bank deposit rates. Money market placements are
made for varying periods depending on the immediate cash requirements of the Group, and earn
an average interest of 4.34% in 2007.
31
4. Receivables
2007 2006
(In Thousand Pesos)
Trade receivables:
Subscribers P3,373,977 =3,277,371
P
Connecting carriers 372,307 392,675
Agents and others 121,558 194,905
Other receivables 427,320 146,426
4,295,162 4,011,377
Less allowance for impairment losses:
Trade receivables:
Subscribers 2,652,925 2,473,699
Connecting carriers 56,887 56,887
Other receivables 13,151 13,151
2,722,963 2,543,737
P1,572,199 =1,467,640
P
Changes in allowance for impairment losses on trade and other receivables follow:
2007 2006
(In Thousand Pesos)
Balance at beginning of year P2,543,737 =2,302,735
P
Provision for impairment losses 179,226 241,002
Write-off - –
Balance at end of period P2,722,963 =2,543,737
P
5. Inventories
2007 2006
(In Thousand Pesos)
At NRV:
Handsets, phone kits and accessories P38,971 P56,566
=
Spare parts and supplies 151,655 143,484
190,626 200,050
At cost
SIM cards and call cards 34,577 34,179
P225,203 =234,229
P
32
6. Property and Equipment
Property and equipment are classified as follows:
For the Period Ended September 30, 2007 (Unaudited)

Tele- Investment Facilities Vehicle Projects
communication Buildings and in Cable Under and Work Under
Equipment Land Improvements Systems Finance Lease Equipment Construction Total
Cost (In Thousand Pesos)
Balance at beginning of year =
P32,327,473 =
P475,805 =
P3,628,413 =
P758,847 =
P4,419,920 =
P4,753,643 =
P25,362,887 =
P71,726,988
Additions 24,119 - 10,722 - 109,566 226,752 5,170,212 5,541,371
Others (51,329) - - - - - - (51,329)
Balance at end of period 32,300,263 475,805 3,639,135 758,847 4,529,486 4,980,395 30,533,099 77,217,030
Accumulated Depreciation
and Amortization
Balance at beginning of year 13,839,579 – 1,162,856 69,771 3,395,262 3,442,354 – 21,909,822
Depreciation and amortization 1,550,143 – 118,225 26,330 236,628 254,115 – 2,185,441
Others (51,329) – – – – – – (51,329)
Balance at end of period 15,338,393 – 1,281,081 96,101 3,631,890 3,696,469 – 24,043,934
Net Book Value P
=16,961,870 P
=475,805 P
=2,358,054 P
=662,746 P
=897,596 P
=1,283,926 P
=30,533,099 P
=53,173,096
For the Year Ended December 31, 2006 (Audited)

Tele- Investment Facilities Vehicle Projects
communication Buildings and in Cable Under and Work Under
Equipment Land Improvements Systems Finance Lease Equipment Construction Total
Cost (In Thousand Pesos)
Balance at beginning of year =
P32,143,128 =
P475,670 =
P3,567,271 =
P758,847 =
P4,419,920 =
P4,612,238 =
P21,173,529 =
P67,150,603
Additions 184,345 135 61,142 – – 141,280 4,185,360 4,572,262
Others – – – – – 125 3,998 4,123
Balance at end of year 32,327,473 475,805 3,628,413 758,847 4,419,920 4,753,643 25,362,887 71,726,988
Accumulated Depreciation
and Amortization
Balance at beginning of year 11,757,916 – 1,002,173 44,033 3,079,758 3,071,533 – 18,955,413
Depreciation and amortization 2,060,646 – 160,683 – 315,504 370,821 – 2,907,654
Others 21,017 – – 25,738 – – – 46,755
Balance at end of year 13,839,579 – 1,162,856 69,771 3,395,262 3,442,354 – 21,909,822
Net Book Value =
P18,487,894 =
P475,805 =
P2,465,557 =
P689,076 =
P1,024,658 =
P1,311,289 =
P25,362,887 =
P49,817,166
33
Facilities under Finance Lease
The Parent Company previously leased certain telecommunications facilities covering local
exchange facilities under Financial Lease Agreements (FLA) for a period of 30 years, at the
end of which the ownership of the facilities automatically transfer to the Parent Company. In
2003, the Parent Company availed of its option under the FLA to purchase the leased
facilities. Following the decision of the arbitration body, the facilities were acquired.
7. Other Noncurrent Assets
2007 2006
(In Thousand Pesos)
Deferred subsidies P
=691,296 =530,287
P
Security deposits 121,454 99,650
Others 582,220 405,608
P
=1,394,970 =1,035,545
P
Changes in deferred subsidies follow:
2007 2006
(In Thousand Pesos)
Balance at beginning of year P
=530,287 =398,594
P
Deferral of subsidies 618,812 563,141
Amortization (457,803) (431,448)
Balance at end of period P
=691,296 =530,287
P
Security deposits relate to the Group’s leased buildings, cellsite lots and commercial spaces.
These will be collected in full at the end of the lease terms subject to adjustments by the
lessor to cover damages incurred on the properties.
34
8. Accounts Payable and Accrued Expenses
2007 2006
(In Thousand Pesos)
Accrued expenses P
=5,173,329 =4,915,605
P
Trade payables 2,595,368 2,652,213
Unearned revenue 453,202 332,519
Payables to connecting carriers 147,793 182,354
Obligations under finance lease 0 2,475,540
Others 922,896 441,299
P
=9,292,588 =10,999,530
P
Accrued expenses and other payables include accruals for interest and various expenses.
Unearned revenue represents proceeds from sale of prepaid cards and airtime values through
the over-the-air reloading services which were initially recognized as unearned revenue by
the Group. Revenue is recognized upon the actual usage of the airtime value of the card, net
of free service allocation. The unused value of prepaid card is likewise recognized as
revenue upon expiration.
Payables to connecting carriers represent interconnection fees due to other carriers for the
charges on voice and data transmissions which enable the Group’s subscribers to reach
subscribers of other networks.
9. Bonds Payable
Parent Company Zero Coupon Convertible Bonds

On December 8, 2003, the Parent Company issued Zero Coupon Convertible Bonds Due
2013 (DIGITEL Bonds) with face value of US$31.1 million and issue price of US$10.0
million. As of September 30, 2007 and December 31, 2006, the outstanding balance of the
DIGITEL Bonds amounted to = P941.6 million (US$20.9 million) and =
P976.8 million ($19.9
million), respectively.
35
The DIGITEL Bonds are redeemable at the option of the Parent Company, in whole or in
part, at the end of each year starting one year after the issue date and every year thereafter at
the following redemption dates and values:
Redemption Date Redemption Value (a)

End of 1st year from issue date US$35.29
End of 2nd year from issue date 38.75
End of 3rd year from issue date 42.63
End of 4th year from issue date 46.97
(a)
Per US$100 of face value
Alternately, the bondholders will have the right to convert the DIGITEL Bonds into common
shares of the Parent Company at redemption date. The number of conversion shares to be
received by the bondholders upon exercise of the conversion right is equivalent to the total
redemption value which the bondholders would have received if the DIGITEL Bonds were
redeemed multiplied by the Philippine Peso-US Dollar exchange rate for the relevant date
divided by the =
P1 par value. Unless previously converted, purchased and cancelled or
redeemed, the DIGITEL Bonds shall be converted into the common shares of the Parent
Company at the end of the tenth year after the issue date. In January 2006, the conversion
options expired due to an amendment made on the bond agreement.
The DIGITEL Bonds constitute direct, unconditional, unsubordinated and unsecured

obligations of the Parent Company and shall at all times rank pari passu and without
preference among themselves and at least equally with all other present and future
unsubordinated, unsecured obligations of the Parent Company, except as may be preferred by
virtue of mandatory provision of law.
The bondholders have the option, through a resolution approved by 75% of the face value of
the DIGITEL Bonds then outstanding, to require a lien on unencumbered assets of the Parent
Company not subject to a dispute, valued at approximately US$200.0 million, subject to the
limitations, conditions and restrictions of a Mortgage Trust Indenture (MTI). The MTI will
be administered by a Security Trustee appointed in accordance with the MTI.
Proceeds from the sale of the DIGITEL Bonds were used to partially fund the purchase of
equipment for GSM Project Phases 1 and 2 valued at approximately US$200.0 million with
completion of approximately 681 cellular sites covering key urban cities nationwide pursuant
to a PA issued by the NTC.
36
DCPL Zero Coupon Convertible Bonds
In November 2004, DCPL issued Zero Coupon Convertible Bonds Due 2013 (DCPL Bonds)
with face value of US$590.1 million and issue price of US$190.0 million. JG Summit
Philippines, Ltd., a related party, fully subscribed to the DCPL Bonds. As of September 30,
2007 and December 31, 2006, the outstanding balance of the DCPL Bonds amounted to
=11.8 billion (US$242.5 million) and =
P P11.7 billion ($225.4 million), respectively.
The DCPL Bonds bear a yield-to-maturity of 12%. The DCPL Bonds are exchangeable into
shares of the Parent Company, and are redeemable at the option of DCPL, in whole or in part,
starting one year after the issue date and every year thereafter at the following redemption
dates and values:
Redemption Date Redemption Value (a)

End of 1st year from issue date US$36.06
End of 2nd year from issue date 40.39
End of 3rd year from issue date 45.26
(a)
Per US$100 of face value
Alternately, the bondholder will have the right to convert the DCPL Bonds into common
shares of the Parent Company at redemption date. The number of conversion shares to be
received by the bondholders upon exercise of the conversion right is equivalent to the total
redemption value which the bondholders would have received if the DCPL Bonds were
redeemed multiplied by the Philippine Peso-USD exchange rate for the relevant date divided
by the P
=1 par value.
In order to exercise the conversion or exchange, the holder must submit to DCPL, with a
copy to the Parent Company, a duly completed and executed Exchange Notice. DCPL and
the Parent Company shall respectively transmit in writing to the subscriber/holder their
consent or objection, within three days from their respective receipt of the Exchange Notice.
The DCPL Bonds constitute direct, unconditional, unsubordinated and unsecured obligations
of DCPL and shall at all times rank pari passu and without preference among themselves.
The bondholder has the option to require a lien on certain assets of the Parent Company in
which case, the Parent Company and bondholder shall, within a reasonable time, execute an
MTI.
37
10. Long-term Debt

2007 2006
Philippine
Peso Philippine Peso
USD Equivalent USD Equivalent
(In Thousands)
Loans from foreign banks US$123,110 P
=5,511,857 US$100,299 =
P4,895,103
Liability under minimum capacity purchase
agreement 1,500 67,560 4,500 220,703
Suppliers’ credits 193 8,724 734 35,980
124,803 5,588,141 105,533 5,151,786
Less current portion 24,801 1,107,774 22,999 1,121,771
US$100,002 P
=4,480,367 US$82,534 =
P4,030,015
11. Other Noncurrent Liabilities
2007 2006
(In Thousand Pesos)
Accrued project costs P
=3,740,252 =1,637,957
P
ARO 247,556 228,176
Pension liabilities 117,663 90,105
P
=4,105,471 =1,956,238
P
Accrued project costs represent costs of unbilled materials, equipment and labor which are
already eligible for capitalization as of September 30, 2007 and December 31, 2006.
Determination of costs to be capitalized is based on the contract price multiplied by the
percentage of shipped materials and/or delivered services.
12. Equity
Details of the Parent Company’s common stock follow:
2007 2006
Authorized shares 9,000,000,000 9,000,000,000

Par value per share P
=1.00 =1.00
P
Issued shares 6,356,976,300 6,356,976,300
38
13. Other Income - net
2007
Interest income on: (In Thousand Pesos)
Short-term placements P
=7,272
Due from related parties 1,910
Cash in banks 836
Others (4,855)
P
=5,163
14. Network-Related Expenses
2007
(In Thousand Pesos)
Rentals P
=666,340
Repairs and maintenance 409,838
Utilities 379,136
Staff costs 204,124
Taxes and licenses 125,704
Outside services 112,333
Professional fees 8,736
Others 149,202
P
=2,055,413
15. General and Administrative Expenses
2007
(In Thousand Pesos)
Staff cost P
=582,085
Marketing and selling expenses 398,337
Outside services 149,782
Utilities 100,014
Others 486,930
P
=1,717,148
39
16. Financing Costs and Other Charges
2007
(In Thousand Pesos)
Interest expense P
=1,648,958
Accretion of ARO (Note 11) 19,381
Others 8,995
P
=1,677,334
Interest expense is incurred from the following:
2007
(In Thousand Pesos)
Long-term debt (Note 10) P
=765,008
Others 883,950
P
=1,648,958
17. Registration with Board of Investments (BOI)
The Parent Company is registered with the BOI as an expanding operator of public
telecommunications services and IGF-2 on a nonpioneer status with a registered capacity of
786,000 lines covering the areas of Regions I to V and the Cordillera Autonomous Region.
Under the terms of its registration, the Parent Company is entitled to income tax holiday
(ITH) for three to six years on income derived from certain areas, additional deduction of
labor expenses for five years but not simultaneous with the ITH, employment of foreign
nationals for five years and unrestricted use of consigned equipment. However, the Parent
Company is subject to certain requirements such as: (a) maintaining a base equity of at least
25%, (b) filing of specialized financial reports with the BOI, and (c) the need for prior
approval for the (i) issuance of stock convertible into voting stock, (ii) repurchase of its own
stock, (iii) investment in, extension of loans or purchase of bonds in substantial amount from
any enterprise other than those bonds issued by the Philippine government, (iv) expansion of
its capacity, with or without incentives, and (v) transfer of ownership or control of the Parent
Company.
The Parent Company is registered with the BOI as a new operator of telecommunications
systems on nationwide CMTS-GSM communication network on a pioneer status with a
registered capacity of 553,451 lines. Consequently, the Parent Company became entitled to
the following incentives: (1) ITH for six years which is reckoned from January 2003 or from
the actual start of commercial operations, whichever comes first, but in no case earlier than
the date of registration; provided however, that the Parent Company has complied with the
infusion of the minimum investment cost of = P1.0 billion not later than four years from the
date of its registration. In case of failure to comply with the said investment requirement,
BOI shall be constrained to automatically amend the project’s status of the registration from a
pioneer status (entitled to six years ITH) to a nonpioneer status (entitled to four years ITH).
Prior to availment of ITH incentive, the Parent Company shall submit proof of compliance
with the Tree Planting Program of BOI, (2) allowable additional deduction from taxable
40
income of fifty percent of the wages for the first five years from the date of registration,
corresponding to the increment in the number of direct labor for skilled and unskilled workers
in the year of availment as against the previous year if the project meets the prescribed ratio
of capital equipment to number of workers set by BOI of not more than US$10,000 to one
worker, and provided that this incentive shall not be availed of simultaneously with the ITH,
(3) unrestricted use of consigned equipment, and (4) employment of foreign nationals in
technical, supervisory or advisory positions for five years from the date of registration.
On October 10, 2003, the BOI registration was transferred to DMPI subject to the following
conditions: (1) submission of a resolution duly approved by the BOD accepting all the terms
and conditions imposed by the BOI on the registration, (2) start of the period of availment of
incentives of the DMPI from the date of the registration, and (3) compliance with other
requirements/conditions as may be imposed by the BOI. In relation to the incentives from
BOI, DMPI is required to maintain a 75:25 debt to equity ratio within a specific period as
prescribed by the BOI.
On December 14, 2006, the Group was registered with the BOI as a new operator of
infrastructure and telecommunications facilities (i.e. 3G telecommunications system) on a
pioneer status with a registered capacity of 950 base transceiver stations (BTS) and 378 BTS
for DMPI and the Parent Company, respectively. The acceptance of the terms and conditions
of the approval of registration states that the Group reserves the right through due process, to
appeal entitlement to ITH after the issuance of the Certificate of Registration. As of
September 30, 2007, the Group has not filed an appeal for ITH entitlement under the new
registration.
Under the terms of the registration, the Group is entitled to the following fiscal and non-fiscal
incentives:
a. For the first 5 years from the date of registration, the Group shall be allowed an
additional deduction from taxable income of 50% of the wages corresponding to the
increment in the number of direct labor for skilled and unskilled workers in the year of
availment as against the previous year, if the project meets the prescribed ratio of capital
equipment to the number of workers set by BOI of US$10,000 to 1 worker.
b. The Group shall be allowed the employment of foreign nationals in supervisory, technical
or advisory positions for a period of 5 years from date of registration. The president,
general manager and treasurer of foreign-owned registered firms or their equivalent shall
not be subject to the limitations set in the registration.
c. The Group shall be given tax credit equivalent to the national internal revenue taxes and
duties paid on raw materials and supplies and semi-manufactured products used in
producing its export product and forming part thereof for 10 years from start of
commercial operations. The request for amendment of the date of start of commercial
operations for purposes of determining the reckoning date of the 10-year period shall be
filed within 1 year from date of committed start of commercial operations.
d. The Group shall be entitled to simplification of Bureau of Customs’ (Customs)

procedures for the importation of equipment, spare parts, raw materials and supplies.
41
e. The Group shall be entitled access to Customs Bonded Manufacturing Warehouse
(CBMW), subject to Customs’ rules and regulations and provided that the Group exports
at least 70% of the production output.
f. The Group shall be exempted from wharfage dues, any export tax, duty, imposts and fees
for a 10 year period from date of registration.
g. The Group shall be allowed importation of consigned equipment for a period of 10 years
from date of registration, subject to the posting of re-export bond.
h. The Group shall be exempted from taxes and duties on imported spare parts and
consumable supplies for export producers with CBMW exporting at least 70% of
production.
i. The Group may also qualify to import capital equipment, spare parts and accessories with
exemption on the related duties from date of registration up to June 16, 2011, pursuant to
Executive Order No. 528 and its implementing rules and regulations.
Under the specific terms and condition of the BOI registration as a new operator of
infrastructure and telecommunications facilities, the Group must increase its subscribed and
paid-up capital stock by at least =
P1,576,631,445, and must submit proof of compliance prior
to availment of incentives.
The Group must submit to the BOI a quarterly report on actual investments, employment and
sales pertaining to the project. Said report will be due within 15 days from end of each
quarter, starting on the date of registration. The Group must also submit to the BOI an annual
report of its actual investments, taxes paid and employment within 1 month following the end
of each fiscal year. Furthermore, the Group must submit a proof of compliance with the Tree
Planting Program of the BOI.
18. Loss Per Share
The following reflects the loss and share data as of September 30, 2007 used in the loss per
share computations:
(In Thousand Pesos, Except Weighted

Average Number of Common Shares
and Loss Per Share Figures)
Net loss P228,991
Weighted average number of common
shares 6,356,976,300
Loss per share P0.0360
42
19. Segment Reporting
The Group’s operating businesses are organized and managed separately according to the
nature of the services provided, with each segment representing a strategic business unit that
serves different markets.
The Group derives its revenue from the following reportable services:
• Wireless communication services - represents cellular

telecommunications services that allow subscribers to make and receive domestic long
distance and international long distance calls to and from any place within the coverage
area. Revenue principally consists of one-time registration fees, fixed monthly service
fees, revenue from value-added services such as text messaging, proceeds from sale of
handsets, SIM cards and other phone accessories, and per minute airtime and toll fees for
basic services which vary based primarily on the monthly volume of calls, the network at
which the call terminates and the time at which the call is placed.
• Wireline voice communication services - represents fixed line

telecommunications services, which offer subscribers local, domestic long distance and
international long distance services, in addition to a number of value-added services in
various service areas covered by the PA granted by the NTC (see Note 1). Revenue
principally consists of fixed monthly basic fees for service and equipment, one-time fixed
line service connection fees, value-added service charges and toll fees for domestic and
international long distance calls.
• Wireline data communication services - represents a variety of

telecommunications services tailored to meet the specific needs of corporate
communications. These include leased lines and internet services.
The Group’s segment information as of September 30, 2007 follows:
Wireless Wireline Voice Wireline Data

Communication Communication Communication
(In Thousand Pesos)
Revenue 3,394,768 5,101,797 356,073 (117,782) 8,734,857
Net income (loss) (442,841) 93,483 120,367 - (228,991)
Segment assets 30,445,336 57,849,151 2,194,972 (30,195,229) 60,294,230
Segment Liabilities 22,737,604 48,646,028 1,676,740 (17,332,255) 55,728,117
Segment assets of the Group do not include net deferred tax assets while segment liabilities
do not include income tax payable and net deferred tax liabilities.
43
20. Other Matters
Key Performance Indicators
Management assessed the Company’s performance based on the following key performance
indicators:
September 30
2007 2006 % change
Revenues (P’000) 8,734,857 7,808,490 11.9%
EBITDA margin a 24.8% 27.1% (8.5%)
b
EBIT margin (11.3%) (10.9%) (3.5%)
Cash flow provided by (used in) operating
activities (P’000) (815,544) 1,884,409 (143.3%)
Net Debt to equity ratio c 10x 9x
a
EBITDA is defined as Earnings Before Interest, Taxes, Depreciation, Amortization and Other
Income/Charges. EBITDA is computed by deducting cost and expenses (excluding Depreciation and
Amortization, Impairment on a joint venture, Equity on net loss, Financing charges, and Provision for
income taxes) from net service and non-service revenues. EBITDA margin is calculated by dividing
EBITDA over net service and non-service revenues.
b
EBIT is defined as Earnings Before Interest, Taxes, and Other Income/Charges. EBIT is computed by
deducting cost and expenses (excluding Impairment on a joint venture, Equity on net loss, Financing charges,
and Provision for income taxes) from net service and non-service revenues. EBIT margin is calculated by
dividing EBIT over net service and non-service revenues.
c
Net debt is derived by deducting cash and cash equivalents and short-term investments from long-term debt.
Net debt to equity ratio is computed by dividing net debt (excluding accounts payable and accrued expenses,
income tax payable, deferred tax liabilities and due to related parties and other noncurrent liabilities) to total
equity. JG Summit Philippines, Ltd., a related party, fully subscribed to the P10.2 billion (US$190.0 million)
DCPL Bonds.
Dividends
The Company historically has not paid cash dividends on the Shares. Any payment of cash
dividends on the Shares in the future will depend upon the Company’s earnings, cash flow,
financial condition, capital investment requirements and other factors, including certain
restrictions on dividends imposed by the terms of the Company’s credit and loan agreements.
Other Matters
a. Any known trends, demands, commitments, events or uncertainties that will have a
material impact on the issuer’s liquidity.
- We are not aware of any known trends, demands, commitments, events or
uncertainties that will have a material impact on the issuer’s liquidity.
- The Company has not defaulted in paying its currently maturing obligations. In
addition, obligations of The Company are guaranteed up to a certain extent by
The Company’s majority stockholders.
44
b. Any events that will trigger direct or contingent financial obligation that is material to the
company, including any default or acceleration of an obligation.
- We are not aware of any events that will trigger direct or contingent financial
obligation that is material to the company, including any default or acceleration
of an obligation.
c. All material off-balance sheet transactions, arrangements, obligations (including

contingent obligations), and other relationships of the company with unconsolidated
entities or other persons created during the reporting period.
- We are not aware of any material off-balance sheet transactions, arrangements,
obligations (including contingent obligations), and other relationships of the
company with unconsolidated entities or other persons created during the
reporting period.
d. Description of any material commitments for capital expenditures, general purpose of

such commitments, expected sources of funds for such expenditures.
- DMPI has a commitment to construct, install, operate and maintain a nationwide
CMTS using GSM technology. Accordingly, DMPI entered into a supply
agreement with foreign suppliers including their local affiliates for Phases 1 to 6
of the said project.
e. Any known trends, events or uncertainties that have had or that are reasonably expected
to have a material favorable or unfavorable impact on net sales/revenues/income from
continuing operations.
- We are not aware of any known trends, events or uncertainties that have had or
that are reasonably expected to have a material favorable or unfavorable impact
on net sales/revenues/income from continuing operations.
f. Any significant elements of income or loss that arise from issuer’s continuing operations.
- We are not aware of any significant elements of income or loss that arises from
the issuer’s continuing operations.
g. Seasonal aspects that have material effect on the FS.

- We are not aware of any seasonal aspects that have material effect on the FS.
45
AGING OF ACCOUNTS RECEIVABLE
SEPTEMBER 30, 2007
(In Thousand Pesos)
Consolidated
Current P 587,010
61 - 90 days 14,322
91 - 120 days up 119,720
Total P 721,051
Add: Connecting carrier (net) and others 851,147
Total Receivables and others (net) P 1,572,199
Note: Aging on Connecting Carrier is not applicable.
46

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DIGITAL TELECOMMUNICATIONS PHILS., INC.

(63-2) 397- 8888

SEC FORM 17-Q

ITEM 1. FINANCIAL STATEMENTS

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

OVERVIEW OF THE BUSINESS

DIGITEL comprised of the following business segments:

• Wireline Services – Primarily provided through the Parent Company, it continues to

Wireline Communications – Voice Services

¾ NETVantage DSL provides subscribers uninterrupted high-speed internet connection for

¾ IP-VPN or Virtual Private Network is DIGITEL’s most reliable, flexible, scalable,

Wireline Communications – Data

In its commitment to provide subscribers innovative services at affordable prices, SUN

Service and nonservice revenues 2,820,840 3,018,957 346,509 (117,782) 6,068,524

Service and nonservice revenues 2,192,553 3,478,602 281,766 (113,865) 5,839,056

Wireline Data Communication

The wireless communications business posted an improvement in service and non-service

September 30, 2007 December 31, 2006 Increase (Decrease)

Consolidated Balance Sheets

Total assets 61,272,838 56,784,998 4,487,840 8

Consolidated Statements of Income

Revenues 8,734,857 7,808,490 926,367 12

Consolidated Statements of Cashflows

Exchange Rates Php per US$

Derivative assets comprising mainly of derivatives embedded in foreign currency

Property and equipment, net of accumulated depreciation, amounted to P53,173.1 million as

DIGITEL’s financing requirements were covered by both internally-generated funds and

Consolidated Financial Statements

LIABILITIES AND EQUITY

8,734,857 7,808,490 3,047,314 3,842,558

COSTS AND EXPENSES

(Unaudited) For the Period Ended September 30, 2007

(Unaudited) For the Period Ended September 30, 2006

For the Nine Months ended

CASH FLOWS FROM INVESTING ACTIVITIES

CASH FLOWS FROM FINANCING ACTIVITIES

NET INCREASE (DECREASE) IN CASH AND CASH

The Parent Company owns 100% of the following companies:

• Digitel Information Technology Services (DITSI), Inc. which is incorporated in the

2. Summary of Significant Accounting Policies

Basis of Financial Statement Preparation

Significant Accounting Policies

Cash and Cash Equivalents

Impairment of Financial Assets

• Assets carried at amortized cost

Property and Equipment

The EUL of property and equipment of the Group follows:

Asset Retirement Obligation

Debt Issuance Costs

Deferred income tax

(d) there is a substantial change to the asset.

Selling, Advertising and Promotions Expenses

Foreign Currency Transactions

Loss Per Share

3. Cash and Cash Equivalents

This account consists of:

This account consists of:

This account consists of:

Property and equipment are classified as follows:

For the Period Ended September 30, 2007 (Unaudited)

For the Year Ended December 31, 2006 (Audited)