Moody’s sees limited revenue growth for telco giant

MANILA, Philippines – PLDT Inc. is expected to register limited revenue growth until next year with expansion in data usage not seen sufficient to compensate for declines in text messaging and voice calls, Moody’s Investors Service said.

“PLDT faces some revenue headwinds, including intense domestic competition in the cellular space and a continued shift of users away from texting and international inbound calling to over-the-top options…,” Moody’s said in its report titled “Slowing but Still Healthy Revenue and EBITDA Growth Drive Stable Outlook.”

This, it said, would limit revenue growth to below one percent through 2017, the report dated Oct. 17 said.

While PLDT continues to make investments in promoting higher data usage, the debt watcher said growth in data and broadband are still not seen enough to outpace declines in international voice calls and short message services.

As of the first semester, PLDT’s revenues reached P85.28 billion, up slightly from the P85.19 billion in the same period a year ago. 

Its consolidated core income, meanwhile, went down six percent to P17.7 billion for the during the same period.

Net income for the January to June period reached P12.5 billion, 33 percent lower than the P18.7 billion in the same period a year ago. 

For this year, the telco has increased its capital expenditures (capex) to P48 billion from an earlier announced amount of P43 billion, to be able to spend for the utilization of new frequencies PLDT gained access to after acquiring half of San Miguel Corp.’s telco assets in May.

The bulk of PLDT’s capex is being spent to improve data coverage and capacity to deliver a wide array of digital services to cater to the customers’ needs.

PLDT is putting greater focus on digital services over the legacy services of voice and text messaging, to keep up with the subscribers’ changing lifestyle.

For most telecommunications players in the Asia-Pacific, Moody’s expects year-on-year average revenue growth of three to four percent over the next 12 to 18 months. 

Capital spending of telcos is also seen to rise slightly next year as operators continue to build out their LTE (Long Term Evolution) networks to accommodate larger volumes of data traffic. 

The PLDT Group had a total of 64.47 million subscribers as of end-June this year, down from the 68.86 million in the same period last year.