Metro Manila (CNN Philippines, November 9) — Telecommunications companies in the Philippines will ramp up investments this 2021 as they hasten network rollouts with Dito Telecommunity set to further tighten up competition, Fitch Ratings has forecasted.
The credit rating agency said capital expenditures (capex) of the country’s current telcos is “likely to be driven higher” in the coming year, projecting a 20 to 25 percent increase.
“PLDT Inc. and Globe Telecom, Inc. are accelerating their network rollout in mobile and fibre broadband in the coming quarters, ahead of Dito Telecommunity’s entry in March 2021,” noted Fitch Ratings in a press statement.
Dito earlier vowed to cover more than 80 percent of the Philippine population in five years’ time, initially eyeing to cater to 37 percent of the populace in its first year. The Dennis Uy-owned company is expected to provide 27 megabits per second (mbps) of internet speed under its certificate of public convenience and necessity.
Fitch Ratings likewise noted that Converge ICT Solutions and NOW Telecom “presently have niche target markets,” which are fibre broadband and fixed wireless service, respectively.
“Nevertheless, we expect competition to intensify in the medium term as new entrants expand coverage,” it added.
Common tower policy also to boost capex
Another factor the rating agency cited is the set of guidelines issued by the government for the usage of common cell towers.
“The country’s new common-tower policy is also likely to hasten tower builds and access to cell-sites, which were previously held up by the lengthy regulatory approval process for permits,” said Fitch Ratings.
The DICT issued the long-awaited guidelines in June in a bid to help companies enhance their mobile network services.
Dito likewise noted earlier it has already completed over 1,500 cell towers worldwide ahead of its technical audit this coming January. With an additional 2,000 towers by the end of 2020, the third telco player’s coverage would expand from 37 percent to around 47 to 49 percent of the population just in its first year.
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Ramping up capex
Fitch Ratings also observed that the Philippines has one of the highest capex/revenue ratios in the Asia-Pacific region pegged at around 40 percent and this seems to have worked in PLDT’s favor.
“PLDT’s heavy capex investments over the past few years and the reallocation of 2G spectrum to 4G have improved network quality and coverage, contributing to increased revenue share since 4Q19 at the expense of Globe,” it remarked.
The Manny Pangilinan-led firm bested the industry this July to October, its fourth quarter of doing so in a row, driven by wireless and fibre-broadband services amid the pandemic, Fitch Ratings added.
Globe, meanwhile, saw quarterly revenue slightly fall with dampened mobile revenue, the rating agency noted.
The Ayala-owned firm has said previously it has earmarked ₱50.3 billion in capital expenditure to boost and expand its network this year.
