MANILA, Philippines — Integrated telco PLDT Inc. is speeding up the shutdown of some of its legacy equipment, such as 2G and 3G, as it looks to focus its network on LTE and 5G moving forward.
The STAR learned that PLDT chairman Manuel V. Pangilinan informed shareholders in a special briefing on Wednesday that the telco giant plans to accelerate the depreciation of legacy assets like 2G, 3G and VDSL.
PLDT is hoping to deploy the 5G assets it ordered in the past four years that contributed to its budget overspend worth P48 billion.
PLDT has confirmed The STAR’s report that it failed to maximize the 5G assets it procured from multiple sources, including Ericsson and Huawei.
As reported, the telco giant said that the market adoption for 5G remains slow given the price of buying 5G phones.
“The deferment of 5G rollout was in relation to the tepid market adoption of 5G handsets given that these are still not affordable for most of the Philippine prepaid market,” PLDT said.
The Pangilinan-led telco is keeping these 5G assets, as it expects demand for 5G to rise in the future. It is also intending to repurpose some of the 5G equipment for LTE use.
“These 5G assets in the warehouses are not to be written off. Those 5G assets could either be repurposed for 4G/LTE or deployed when 5G adoption picks up. Mr. Pangilinan made reference to possible write-offs of older equipment that serve the 2G, 3G and legacy transport elements of our network,” it added.
Documents showed that PLDT started ordering 5G assets one after the other in 2019 to raise its competence with the emergence of Dennis Uy’s Dito Telecommunity Corp. and Dennis Anthony Uy’s Converge ICT Solutions Inc.
After purchasing 5G equipment, however, PLDT found itself in a dilemma as to where to deploy them, as the imports arrived at the onset of the pandemic in 2020.
At that time, customers were stripped of cash due to work stoppage as a result of the COVID-19 lockdowns.
PLDT even had to cancel network buildup deals with Ericsson and Huawei for the delivery of at least 61 towers and 54 towers, respectively.
It is also asking vendors to provide it with relief for the payment of assets covered by the cost overrun.
Last week PLDT reported that its capital expenditures in the past four years totaled P379 billion, including an estimated budget overrun of P48 billion.
To deliver commitments to shareholders and settle its payables to suppliers, PLDT seeks to borrow up to P45 billion in 2023 and 2024 with the goal of returning to free cash flow by 2025 at the earliest.