The Philippines’ largest, fully integrated telecommunications company PLDT Inc (PLDT) sustained its growth momentum in the third quarter, as customers flocked to the fastest, most reliable network with world-class connectivity, enabling and elevating digital lifestyles beyond COVID-19.
Enhancing PLDT’s existing solutions and services are PayMaya, the fintech arm of Voyager Innovations, and Maya Bank, a soon-to-be-launched digital bank authorized by the Bangko Sentral ng Pilipinas (BSP). With PayMaya, Maya Bank will promote a seamless digital banking experience among customers through its strong affiliation with PLDT and wireless arm Smart Communications Inc (Smart).
“The digital transformation of our country is at the top of the PLDT Group’s agenda,” said Manuel V. Pangilinan, Chairman of PLDT, Voyager Innovations, and PayMaya, “and establishing the digital bank is a huge step forward for Voyager and PayMaya. Maya Bank will be a key vehicle in hastening digital adoption among Filipinos through inclusive financial services.”
In the first nine months, PLDT’s Consolidated Service Revenues (net of interconnection costs) rose by 7%, or ₱9.3 billion, to ₱135.9 billion, driven by record-high service revenues of ₱46.0 billion in the third quarter. Also for the third quarter, EBITDA increased by 8% or ₱1.7 billion to a record-high of ₱24.5 billion, marking its fifth consecutive quarter of record growth. For the first nine months,
EBITDA increased by 8%, or ₱5.1 billion, to an all-time high of ₱71.1 billion. EBITDA Margin was at 51%.
Telco core income, excluding the impact of asset sales and Voyager Innovations, climbed 10% year-on-year, or ₱2.1 billion, to ₱23.1 billion in the first nine months of 2021, helped by lower tax rates.
PLDT remains on track to reach full year telco core income guidance of ₱30.0 billion. Reported net income declined by 4% or ₱0.8 billion to ₱18.8 billion, after taking into account revaluation losses due to the peso’s depreciation this year vis-à-vis the peso appreciation last year.
“As a true customer-centric and leading-edge technology company, our vision is to empower all Filipinos in building a stronger nation – securing a sustainable future for everyone by providing world-class connectivity. We will be relentless towards this vision, which inspires us to deliver more and better,” said Alfredo S Panlilio, President and CEO of PLDT and Smart.
Home: Strong 3Q growth, dominates fixed broadband market
Bolstered by strong market demand and responding quickly through aggressive expansion, PLDT’s fiber-to-the-home business delivered record breaking growth for the third quarter. Service revenues hit ₱9.0 billion, up 83% or by ₱4.1 billion from the same period in 2020 for its fiber business.
Total Home revenue grew 25% or ₱7.0 billion to ₱35.3 billion in the first nine months of the year, boosted by the record revenue increase in the third quarter, up 29% or ₱2.8 billion to ₱12.6 billion.
Total fiber capacity of PLDT Home now stands at 5.29 million ports. This is after the completion of 1.23 million fiber ports in 2021. Total target port build-out for the year remains at 1.7 million.
The improved service and the copper migration campaign also led to a reduction of churn. Total churn across legacy and fiber decreased to 1.5% churn rate compared to 2.1% in the first half of 2020. PLDT
expects this to decline further in the coming months as the migration program accelerates nationwide and connects more Filipinos to the fastest Fiber in the country.
PLDT Home added a record 324,000 fiber customers in the third quarter, ending September with a market leading fiber customer count of 2.09 million, and bringing total fixed broadband customers to 2.77 million.
Having already gained 802,000 new fiber subscribers in the first nine months, PLDT Home is on track to exceed one million net new fiber subscribers this year.
Individual: GigaLife App drives passions, purpose, powering digital adoption
Individual Wireless revenues grew 3%, or ₱2.0 billion, to ₱65.1 billion in the first nine months, despite challenging market conditions due to limited mobility, economic difficulties and competition. Data/broadband contributed 80% of the segment’s revenues, with mobile data users reaching 40 million and with Smart 5G growing its revenue contribution as Smart continues to expand its 5G network roll out. Smart 5G subscribers posted a triple-digit year-on-year growth, while data traffic on Smart’s 5G network more than doubled in the third quarter, up 116% from the second quarter of 2021. In the third quarter alone, average data traffic per month increased by nearly 20x versus the fourth quarter of 2020.
Mobile data revenues in the first nine months grew by 9% or ₱4.4 billion year-on-year, from ₱48.1 billion to ₱52.6 billion, as third quarter promos drove increase in usage. Total data traffic in the
first nine months grew 16% year-on-year to 2,458 petabytes. In the third quarter, monthly average data usage per subscriber was 7.7 GB, up 8% versus the second quarter.
As limited mobility confined customers to their homes, revenues from Smart’s fixed wireless solutions grew 88%, or ₱1.2 billion, to ₱2.5 billion. Fixed wireless subscribers breached the one million mark,
increasing 24% versus end-2020.
Key to Smart’s sustained year-on-year growth has been the massive adoption of the GigaLife App. A powerful engagement platform, it allows subscribers to check their balances, monitor app usage and
easily discover Smart’s library of services. The GigaLife App is envisioned as the “operating system” for a Smart subscriber as it allows linking of different accounts, offers an integrated rewards program and, through GigaPay, links their PayMaya wallet for in-app transactions such as buying load, subscribing to promos, and paying bills. The GigaLife App now has over 10 million users in just a year since its launch in September 2020.
Enterprise: Driving record quarterly revenues in wireless, ICT, catalyzing digital ecosystems, hyperscalers, IoT, Fintech
Catalyzing the establishment and growth of digital ecosystems in the Philippines, encompassing Artificial Intelligence (AI), Internet of Things (IoT), Fintech, and hyperscalers, PLDT Enterprise (ePLDT) recorded the highest ever quarterly revenues for its wireless and ICT businesses, led by BizLoad, broadband, co-location, and cloud services.
Enterprise segment’s revenues grew by 2% or ₱0.6 billion to ₱31.1 billion in the first nine months. In the third quarter, the segment’s revenue grew 2% or ₱0.2 billion to an all-time high of ₱10.7 billion.
The PLDT Group, through ePLDT, will build the first hyperscaler data center in the Philippines, designed to serve massive power and IT requirements of global tech giants.
The new hyperscaler data center, to ground break next year and completed by the first quarter of 2024, will have more power capacity than PLDT’s network of 10 globally certified VITRO data centers combined. It will be telco neutral and will incorporate sustainability in its design and operations.
Supporting this bid to become a hyperscaler hub is PLDT’s current international cable network of 15 global subsea cable systems with total capacity of 19 Tbps. The completion of the Jupiter Cable system slated in Q2 2022 would further increase PLDT’s international capacity to 60 Tbps.
In anticipation of the immense potential of IoT in the Philippines, PLDT and Smart have launched the Internet of Possibilities, a Philippine-first platform allowing enterprises to accelerate IoT initiatives. Powered by Nokia’s Worldwide IoT Network Grid, the platform will enable enterprises to have full control and visibility of up to hundreds of thousands of interconnected IoT devices, unlocking new use cases. Jumpstarting PLDT and Smart’s broad program to develop world-class 5G technology use cases for industry and enterprises, global port operator ICTSI is set to operate the
Philippines’ first 5G-enabled ‘intelligent’ ports.
PayMaya: Unlocking growth with a digital bank license for Maya Bank, integrating into PLDT’s broader digital ecosystem
PayMaya is the only fintech company in the Philippines operating an end-to-end digital financial services ecosystem with a widely used consumer e-wallet app, the most extensive on-ground agent network via Smart Padala, and the largest non-bank enterprise payments processing business. PayMaya usage surged during the COVID19 pandemic, reaching over 41 million registered users across its consumer platforms at the end of September.
Last September, the Bangko Sentral ng Pilipinas granted a digital banking license to Maya Bank. The digital bank’s primary focus will be the largely unbanked and underserved consumers and micro-, small-, and medium-sized enterprises (MSMEs). It will leverage on PayMaya’s successful track record and ready base of consumers and MSMEs, as well as its widest digital payments touchpoints and strong enterprise partnerships.
Through its strong affiliation with PLDT and Smart, Maya Bank will also promote a seamless digital banking experience among customers.
Maya Bank will launch by the first quarter of 2022.
“Driving relevant digital innovations, including extending the benefits of digital payments and e-commerce to more Filipinos, is part of our commitment to bring world-class services to our customers,” Panlilio said. “We have integrated financial services into our digital ecosystem by maximizing the synergies among PLDT, Smart, and PayMaya.
And that is just the beginning. We will eventually expand this to include other customers, including those we provide with home broadband,” he added.
Network build-out supporting digital lifestyles
To support this expanded digital ecosystem, PLDT and its mobile unit Smart continued their network buildout, bringing total capital expenditures to ₱63.3 billion for the first nine months. PLDT and Smart are on track to meeting the 2021 full-year capex guidance of at least ₱88 billion.
Network upgrades continue to represent the bulk of capital expenditures, as the Group ensures consistent delivery of superior customer experience. As of the end of September, PLDT’s extensive fiber infrastructure totaled about 615,000 kilometers, up 17% from end-June and 43% from year end 2020, allowing the potential delivery of fixed broadband connectivity to an estimated 12.7 million homes passed, or more than half of total Filipino households.
This infrastructure complements Smart’s 5G network expansion, supporting 6,400 live 5G sites, surpassing the initial target of 3,800 5G base stations this year. Meanwhile its LTE network covers 96% of the population from Batanes to Tawi-Tawi. As of endSeptember, Smart’s base stations reached over 72,600.
The network buildout reinforces Smart’s dominance in 5G, widening its lead over rivals and underpinning its claim as the Philippines’ fastest and most extensive mobile network. Ensuring seamless delivery of more data-driven services, PLDT is on track to expanding its domestic network capacity to 92 Terabits per second (Tbps) by the end of the year, ensuring the seamless delivery of more data-driven services in the country ahead of demand, providing the best possible experience to its customers.
Smart has consistently been recognized for its network superiority by independent thirdparty firms such as Ookla®, Opensignal and umlaut.
PLDT, on the other hand, has set the benchmark for internet speeds in the Philippines with its consistent wins as the ‘fastest fixed network’, according to Speedtest Awards™, presented by Ookla®.
PLDT also clinched the Most Outstanding Company in the Philippines award under the Telecommunications Services Sector category of Asiamoney’s 2021 Outstanding Companies Poll. Over 1,071 fund managers, analysts, bankers and ratings agencies took part in the voting. Over 5,787 votes were received for publicly listed companies across 13 markets in Asia.
Sustainability: Connection, Conservation, Concern and Commitment
Sustainability is core to how PLDT runs its businesses and a key pillar of its transformation. Under Environment, PLDT’s sustainability agenda includes efforts to reduce PLDT’s carbon footprint by using new technologies in its network rollout. These include deploying carbon fiber towers and green towers using fuel cell technology that emit less carbon dioxide, while also achieving cost and operational efficiencies with minimal downtime, supporting PLDT’s priorities on elevating customer experience and achieving cost efficiencies.
The ongoing upgrade of PLDT’s copper facilities to fiber allows PLDT to operate a network that uses less energy. A fiber network uses at least seven times less energy than a copper network. PLDT has also embarked on using electric vehicles as part of its Green Fleet Program.
Under the Social pillar, PLDT’s efforts toward digital inclusion are positioned alongside initiatives promoting a safe online environment for all. As part of its commitment, PLDT has maintained robust and extensive cybersecurity and data privacy solutions, reinforcing safe spaces online. In the third quarter, PLDT blocked a record of nearly 90,000 online child abuse links and sites hosting explicit content involving minors, doubling down on its efforts to quash the unprecedented proliferation of online sexual abuse and exploitation of children or OSAEC, a phenomenon spurred by the COVID-19 lockdowns.
PLDT also continues to foster inclusion, whether it be providing a safe workplace that embraces diversity, or financial inclusion through PayMaya. Enabling marginalized communities through technology, Smart’s corporate social responsibility programs and advocacies such as School-in-a-Bag and FarmSmart provide digital tools and training for remote learning communities and farmers nationwide, helping ensure no one is left behind in the increasingly digital new normal.
With respect to the Governance pillar, PLDT has always been committed to the highest standards of business ethics and corporate governance requirements among Philippine corporates. PLDT’s listing on the NYSE has required the company to also comply with the US Securities and Exchange Commission’s (SEC) governance standards, including Sarbanes Oxley Act Section 404 requirements for internal controls over financial reporting.
In June 2021, PLDT separated its Chairman and CEO roles with the appointment of Al Panlilio as President and CEO. The PLDT Board is currently composed of mostly independent directors and non-executive directors with a wide range of business experience, including three female directors out of the 13 members.
PLDT also has Board committees with specific mandates to oversee Data Privacy and Information Security, and Corporate Sustainability.
These initiatives are aligned with PLDT’s Sustainability Principles, which are anchored on 4C’s: Connection, Conservation, Concern and Commitment, highlighting PLDT’s focus on connecting Filipinos, managing environmental impact, and advocating for an inclusive culture.
Conclusion
PLDT President Al Panlilio expressed his pride and satisfaction at the Company’s results to-date, stating “We are cautiously optimistic that as the economy reopens, we are best positioned to serve our customers through the new normal, as evidenced by our strong results for the first nine months of 2021. While all business units continue to show solid performance, this is more apparent in the Home business, where we pushed record installations in recognition of the connectivity needs of our customers.”
As quarantine restrictions further ease, PLDT Chairman Manuel V Pangilinan underscored the Company’s commitment to sustaining its radical leadership amid rapidly shifting patterns of business, underpinned by world-class customer experience and enablement of enterprises’ digitalization.
“In many ways, we have to adopt revolutionary aspects of leadership, adapting to abrupt changes where really needed, while maintaining the values that are important to the Company,” Pangilinan said. “At the center of it all is the customer experience. In the old days, the value of companies was defined mainly by traditional metrics. Nowadays, companies are measured on two additional metrics which define their market value: Sustainability and Digitalization. These are no longer options but imperatives.” (Press Release)