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Wednesday, January 22, 2020
Home Business Top Business Telco competition ‘stabilizing’ – Fitch

Telco competition ‘stabilizing’ – Fitch

 

COMPETITION in the Philippine telecommunications sector is “stabilizing,” as seen in the strong first-half financial performance reported by its two major players ahead of the entry of the third one, according to Fitch Ratings.

In a report released on Thursday, the global credit ratings agency said it expects the telco industry to continue performing robustly for the rest of 2019, projecting it to record mid-to-high single-digit growth in revenues.

Ayala-led Globe Telecom Inc. registered an 8-percent increase in revenues in the period, compared with Pangilinan-led PLDT Inc.’s 5 percent.

Despite this, Fitch Ratings is optimistic about PLDT’s capacity to bounce back, saying a “firmer recovery is underway” after its wireless business posted 6-percent growth year-on-year.

“We expect [that] PLDT will benefit from an acceleration of subscriber take-up in its fibre-broadband services, which had been affected since mid-2018 by a regulatory ruling on outsourced services,” the debt water said, adding that the P3-4 billion it earmarked to hire installation workers and technicians would help bolster its home broadband customer based.


Fitch Ratings also expects Globe to remain dominant in terms of service-revenue figures amid its “larger post-paid subscriber base and continued market-share gains in mobile.”

It noted, however, that Globe and PLDT should expect Dito Telecommunity Corp. to disrupt the market once it begins its operations.

“[C]ompetition is likely to intensify in the medium term with the entry of the third mobile operator Dito Telecommunity. Competition in the mobile sector is greater than in fixed-line, and therefore, we believe diversification into fiber broadband is advantageous for fixed-mobile convergence and in capturing the long-term demand for fibre backhaul,” Fitch Ratings said.

Dito, backed by Davao City-based businessman Dennis Uy’s Udenna Corp. and Chelsea Logistics and Infrastructure Holdings Corp. and Beijing-owned China Telecommunications Corp., bagged last month the permit and frequencies it needed to operate, officially making it the challenger to the so-called duopoly in providing telecommunication services in the country.

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Today’s Front Page January 22, 2020

Today’s Front Page January 22, 2020