PLDT to shut down 3G network

Integrated telecommunications giant PLDT Inc. announced to shut down its 3G or third generation network next year to optimize current frequencies and give way to newer mobile technologies.

In a virtual press briefing held Thursday, August 4, 2022, PLDT chief finance officer Annabelle L. Chua said that the decision to let go of older 3G network came after the company noted a sharp decline of users, which is now used only by four percent of its total mobile users.

According to Chua, the traffic now is dominated by LTE—a common based to easy 5G migration. She added that PLDT intends to sunset 3G technology to provide better connectivity services to both prepaid and post paid subscribers.

While the company is ready to shut down the 3G network, along with the readiness of users, PLDT and Smart president Alfredo Panlilio admitted that what remains to be a challenge is to usher the 3G users to LTE and ultimately to use 5G.

One of the solutions being considered, Panlilio said is to provide affordable 4G and 5G enabled handsets, working hand in hand with device vendors. Another solution, is for PLDT and Smart together with its fintech arm Maya to come up with affordable credit access or perhaps a subsidy for easier device change.

FIRST HALF REVENUES

Surmounting increasingly tough economic conditions, PLDT Inc. grew Consolidated Service Revenues (net of interconnection costs) by five percent or P4.4 billion to an all-time high of P94.3 billion in the first half of 2022.

In the second quarter of 2022, Consolidated Service Revenues grew by six percent six percent to P47.9 billion, showing robust growth despite more difficult market conditions as the Company notched a fifth quarter of sequential improvements.

Sustained quarteron-quarter growth in data and broadband, which grew by 10% or P6.6 billion to P74.9 billion in the first half, contributed 79 percent to consolidated service revenues.

Consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) in the first six months grew 8% or P3.9 billion year-on-year to P50.5 billion, another all-time high, crossing the P100-billion mark for the last 12-month.

According to Panlilio, PLDT is on track to meet its 2022 targets.

Service Revenues are expected to post a midsingle digit growth.

“Home broadband will lead this growth, with Enterprise also expected to register stronger performance, underpinned by ICT. And although Wireless faces tough market conditions, it should benefit from the continued opening up of the economy,” Panlilio said reiterating that improved customer experience is one of the key transformational goals in PLDT’s aspirational 2025 vision and strategy. Under which the company is also establishing new ways of working and a much higher pace of execution.

“All these are in support of our mission to provide better connectivity for all in an enhanced digital ecosystem, accelerating Filipinos’ pivot to their digital lifestyles,” Panlilio added.

In April,

PLDT announced the signing of Sale and Purchase Agreements in connection with the sale of 5,907 telecom towers and related passive telecom infrastructure, the largest ever acquisition of assets in the Philippines by international investors.

Following this, PLDT announced on 1st June that its subsidiaries Smart and Digitel Mobile Philippines, Inc. have successfully achieved First Closing by completing the sale of 3,012 telecom towers, representing more than half of the towers being monetized. The corresponding cash consideration of approximately P39.2 billion has been received.

The Second Closing was concluded on 1st August with the completion of the sale of 1,013 towers, with the corresponding cash consideration of ?13.2 billion also received.

The Group has to date completed the sale of 4,025 telecom towers representing 68 percent of the towers portfolio subject to the sale. PLDT’s gain on the First Closing stood at

P12.6 billion in the first half of the year. PLDT anticipates additional closings over the next few months based on the number of towers being transferred. Final closing is expected by the fourth quarter of 2022.

OUTLOOK

Manuel V. Pangilinan, PLDT chairman expects the company to outperform, against a very challenging environment, saying “we expect stronger headwinds in the second half, with higher inflation impacting our customers’ pockets as well as our own operating costs.”

“With so much pressure on growth, it is imperative that we stay focused on our strategic initiatives and managing costs. As to full year profit guidance, we maintain Telco Core Income at P33.0 billion, albeit some upside may be possible as portions of proceeds from the Towers sale are used to pay down debts in the second half,” Pangilinan concluded.

PLDT has already spent P46 billion of its planned P85 billion capital expenditure from January to June 2022.