By Ashley Erika O. Jose, Reporter
LISTED telecommunications and information and communications technology (ICT) companies may post strong financial results for the first quarter but may face challenges related to cybersecurity and industry changes, according to analysts.
“The Philippines is undergoing a notable transformation marked by a strategic pivot towards digital services. Looking ahead, the industry faces looming threats that could impact short-term profitability. Despite these challenges, there are several factors that could drive sustained growth,” Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said in a Viber message on Wednesday.
For the first quarter of the year, listed telco and ICT companies are likely to sustain growth mainly due to their innovative and diversified services, he said. “Continued innovation and diversification into digital services beyond traditional telecommunication offerings could attract new customers and increase revenue streams.”
Companies’ efforts to ramp up its infrastructure investments and improvement of broadband coverage are also catalysts for growth, he noted. “Reforms aimed at fostering an environment conducive to foreign investment (align) with the industry’s aggressive rollout of 5G (fifth-generation) technology.”
“This push for advanced connectivity promises to revolutionize communication infrastructure within the country, enhancing the overall digital experience for consumers and businesses alike,” he added.
For Cristina S. Ulang, head of research at First Metro Investment Corp., the expansion of 5G and migration pose risks to companies and contribute to a somewhat bleak outlook for the sector.
“Telcos’ growth is limited by high market saturation and affordability issues facing 5G migration,” she said.
For Regina Capital Development Corp. Head of Sales Luis A. Limlingan, telcos will sustain their growth as the industry is less sensitive to the impact of volatile macroeconomic conditions.
“Companies will likely sustain the growth they have experienced from the last few years, since these industries are less sensitive to the headwinds the market has been experiencing,” he said.
Mr. Arce from Globalinks noted that the industry is likely to face impacts from cybersecurity challenges and various changes within the sector.
“Several catalysts are expected to propel industry growth, including the ongoing expansion of the country’s digital economy and the swift implementation of 5G technology,” he said. “Despite these positive prospects, the industry faces a potential obstacle in the form of cybersecurity attacks, which may persist and escalate in the coming years.”
“This push for advanced connectivity promises to revolutionize communication infrastructure within the country, enhancing the overall digital experience for consumers and businesses alike,” he added.
In 2023, Pangilinan-led PLDT Inc. saw its attributable net income more than double to P26.61 billion from P10.49 billion previously on lower expenses and higher top line.
The company’s combined revenues expanded by 3% to P210.95 billion from P204.36 billion in the same period in 2022, while the its gross expenses declined by 24% to P158.47 billion from P209.43 billion previously.
Ayala-led Globe Telecom, Inc. recorded a core net income of P18.92 billion, 1.3% lower than the P19.17 billion in 2022 due to lower revenues.
Globe saw full-year service revenues of P162.33 billion, marking a 4.5% increase compared to the P107.52 billion recorded a year earlier.
Despite the recorded lower core net income in 2023, Globe is expecting low-to-middle digit revenue growth driven by its business segments.
For 2023, Converge recorded a 22.3% climb in its net income to P9.1 billion as consolidated revenues climbed by 5% to P35.4 billion.
DITO CME Holdings Corp. has yet to release its 2023 financial results.
