PLDT to meet ‘increasing expectations and criticisms’ with CAPEX boost

14 Nov 2017

Filipino telecoms heavyweight PLDT Inc. has revealed it is considering upping its capital expenditure budget for FY 2018 to above that set out currently in its 2017 guidance – PHP46 billion (USD900 million) – as it looks to respond ‘to increasing expectations and criticisms being levelled against the industry about network quality’. In a statement, the telco confirmed that while it can sustain its current CAPEX levels via operating cash flow, to maintain its levels of debt, any higher spend would have to be funded elsewhere – possibly through the sale of assets. PLDT said: ‘One option is to consider PHP46 billion as the normative CAPEX level to support our various network initiatives to further expand the reach of PLDT’s home broadband network as well as enhance the coverage and capacity of our 3G/LTE network across the country’.

Chairman and CEO Manuel Pangilinan noted that the company’s capital expenditure guidance for 2017 remains at PHP38 billion, with an additional PHP15 committed already this year. However, he confirmed a forecast that the works ‘will be finished in 2018’. PLDT’s FY 2018 is not yet set in stone, but it will provide guidance when it announces full-year results in March 2018.

PLDT Inc. reported net income of PHP21.942 billion in January-September 2017, up 38% from PHP15.900 billion in the corresponding year-earlier period, as core income climbed by 7% to PHP23.189 billion. The telecommunications and digital services provider said its increased bottom line was bolstered by the sale of its subsidiaries Beacon Electric Asset Holdings Inc. and SPi Technologies, and noted that nine-month revenues slipped 5% to PHP119.066 billion from PHP125.386 billion and EBITDA rose 7% to PHP49.129 billion; EBITDA margin was 43%, compared to 38% in 9M16. Operationally speaking, mobile businesses Smart Communications and Sun Cellular closed out 30 September 2017 with a total of 58.218 million mobile users, down 11% on an annualised basis, of which 55.651 million are pre-paid (down 11%) and 2.567 million post-paid (down 18%). The number of fixed broadband users stood at over 1.903 million, including 1.651 million fixed line broadband and 251,897 wireless home broadband connections. The company also reported more than 2.614 million fixed voice telephony lines at end-September, up 9% y-o-y from 2.405 million in the same month of 2016.