Sky Cable purchase to boost PLDT growth

PLDT Inc.’s 2024 prospects will likely receive a boost from steady growth of its core businesses and the anticipated earnings contribution from its acquisition of broadband company Sky Cable Corp., Maybank Investment Banking Group said.

The buyout of the Lopez-owned Sky Cable’s broadband business and related assets is expected to add up to 350,000 subscribers to the Pangilinan-led telco, Maybank said in a report.

Sky Cable majority owner ABS-CBN and PLDT last month disclosed that the Philippine Competition Commission had approved the P6.75-billion deal, bringing the transaction closer to completion. “The acquisition was initially expected to close by the fourth quarter of 2023. We [will] make revenue adjustments to reflect the timing changes,” the investment bank noted.

Maybank also forecast that PLDT would book a 5.0 percent year-on-year increase in enterprise revenues this year as the first phase of its data center expansion is expected to be operational by the middle 2024.

The telco’s growth last year, Maybank noted, was weighed down by the “discontinuance of legacy voice or data contracts with the DepEd (Department of Education) as classes fully returned to faceto-face settings.”

The investment bank also expects PLDT to have closed 2023 with a 13-percent rise in mobile average revenue per user, which would partly offset an 18-percent drop in the number of its mobile subscribers following implementation of the SIM card registration law.

“Data revenue [is expected] to lead growth at 5.3 percent for FY23E (fiscal year 2023 estimate) on increasing data usage and smartphone penetration, plus increased demand for fixed-line,” the bank added.

PLDT is also forecast to have incurred lower equity losses in its digital financial app Maya in 2023 compared to the P3.2 billion recorded a year earlier, Maybank said.

As of end-September last year, PLDT saw a 1.0-percent increase in net income to P27.9 billion from P27.5 billion in the same period in 2022.

Excluding the impact of asset sales and Maya, core income during the period would have amounted to P26.1 billion, up 2.0 percent from P25.6 billion.

Stiffer mobile competition, which could lead to price cuts or an increase in marketing expenses, and the later-than-expected achievement of profitability for Maya, were the downside factors seen for the telco’s growth this year, Maybank said.

PLDT shares last Thursday closed down 0.38 percent to P1,295 apiece.