PHILIPPINE telecommunications (telco) companies are expected to see modest growth this year while maintaining a strong credit profile, driven by continued data and broadband expansion, according to financial research firm CreditSights.
“Overall, we are comfortable with the resilient credit profiles of both Globe and PLDT, underpinned by their leading mobile and broadband market positions in the Philippines,” CreditSights said.
Pangilinan-led PLDT recorded a 21.4% increase in attributable net income for 2024, reaching P32.31 billion, fueled by all-time-high service revenue growth.
Consolidated revenue rose 2.8% to P216.83 billion from P210.95 billion in 2023, primarily driven by higher service revenues.
Telco core income, which excludes the impact of asset sales and losses from Maya Innovations Holdings, increased by 2.3% to P35.14 billion from P34.34 billion in 2023.
Meanwhile, Ayala-led Globe posted a full-year core net income of P21.50 billion for 2024, marking a 13.6% increase from P18.92 billion in 2023.
Its consolidated revenue grew 2% to P165.02 billion from P162.33 billion a year earlier.
PLDT and Globe saw sluggish revenue growth last year, CreditSights said, adding that mobile data remained a key growth driver for both telcos, supported by evolving consumer data consumption habits and rising smartphone adoption.
CreditSights expects Globe and PLDT’s credit metrics to grow modestly by about 0.1x to 0.3x this year.
Revenue and EBITDA (earnings before interest, taxes, depreciation, and amortization) growth for both firms is expected to remain in the low- to mid-single digits, as competition in mobile and broadband intensifies with DITO Telecommunity Corp.’s expansion.
The financial research firm noted that tight competition in mobile and broadband will be mitigated by Globe and PLDT’s data center revenues.
For instance, ST Telemedia Global Data Centres (STT GDC) Philippines’ 33-megawatt (MW) data center is expected to be operational by mid-2025, while PLDT’s VITRO Sta. Rosa was completed in 2024.
PLDT continues to explore options for selling a minority stake in its data center business.
The company previously engaged Japan’s Nippon Telegraph and Telephone (NTT) for a potential sale of up to 49% of its data center business, but the deal was eventually dropped.
PLDT also ended negotiations with fund manager CVC Capital Partners for the sale of its data center unit.
To date, PLDT, through its subsidiary ePLDT, Inc., operates 11 data centers, including the 50-megawatt hyperscale data center in Sta. Rosa, Laguna.
At the local bourse on Monday, PLDT shares rose by P3, or 0.22%, to close at P1,363 apiece, while Globe shares declined by P10 to P2,096 per share.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., holds a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Ashley Erika O. Jose
