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By Ashley Erika O. Jose, Reporter
PHILIPPINE telecommunications companies (telcos) are gearing up for some modest growth this year. Even though the first nine months showed softer results, the holiday season and steady demand for mobile data and broadband are lending a helping hand. Just a heads-up: performance is expected to differ among the players, say analysts.
“By the end of the year, listed Philippine telcos should see some modest growth, but the pace and quality will really vary between them,” mentioned Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., in a Viber message on Tuesday.
“We anticipate mixed results, driven by a steady growth in subscribers, although softer ARPU (average revenue per user) growth will slightly dampen things due to increasing competition,” Andrei Jorge G. Soriano, a research associate at China Bank Securities Corp., shared in an email on Monday.
He also pointed out some risks to keep an eye on, like the impacts of recent regulatory restrictions on online gaming payments via e-wallets, which were imposed in August and might influence the fourth-quarter outcomes.
According to COL Financial Group, Inc. Equity Research Analyst Paolo Miguel Manansala, Converge ICT Solutions, Inc.—the listed fiber provider—is likely to see year-on-year growth. Meanwhile, Globe Telecom and PLDT might struggle due to shrinking ARPUs and stronger competition from DITO Telecommunity.
“Globe and PLDT’s mobile division could face challenges because of their declining ARPUs, indicating consumers are spending less. Plus, DITO’s growing competition is making things tougher,” he added.
On a brighter note, broadband demand is expected to stay stable. “We’re looking forward to a boost in earnings during the holiday season, which could carry over into the first quarter of next year. However, these companies usually face higher costs at year-end, which may balance out any gains,” Mr. Manansala explained.
Mr. Arce emphasized that established telcos benefit from their size, strong positions in mobile data and broadband, and growing non-voice revenues like enterprise solutions and data centers.
“However, increasing competition, especially from DITO, along with cost pressures could limit growth. If seasonal trends go well, I see potential for Globe to have a stronger Q4. Their enterprise solutions might pick up, and data traffic could surge during the holidays. Still, Globe’s core net income has shown some weakness: in Q1 2025, normalized profits dropped sharply due to rising financing and depreciation costs,” he mentioned.
In the latest quarterly update, telcos reported slowed growth amid falling revenues. DITO CME Holdings Corp., the force behind DITO Telecommunity Corp., posted a net loss of P6.29 billion in Q3, a drop from the P998.05 million profit a year ago, influenced by climbing expenses. Gross revenue fell to P5.26 billion, down 24.35% from P4.23 billion last year, while gross costs rose to P8.26 billion from P7.53 billion. For the first nine months of the year, DITO CME trimmed its net losses to P9.65 billion from P11.05 billion, with revenues rising 25.28% to P14.92 billion from P11.89 billion.
Meanwhile, Globe’s net income dipped 12.79% in Q3 to P5.25 billion from P6.02 billion, and revenues slipped 1.68% to P44.36 billion from P45.12 billion. For the nine-month period, net income dropped 14.04% to P17.69 billion from P20.58 billion, with total revenues falling slightly to P131.59 billion from P134.74 billion. Mobile revenues still made up 65.48% of total revenues at P86.17 billion.
PLDT Inc. reported a net income of P6.93 billion in Q3, down 28.26% from P9.66 billion last year, as increased costs outweighed revenue gains. Revenues grew slightly to P53.71 billion from P53.36 billion, while expenses jumped to P42.36 billion from P39.62 billion. For the nine months ended in September, total revenues rose 1.45% to P163.28 billion from P160.94 billion, while expenses increased 3.61% to P123.39 billion from P119.09 billion. The nine-month net income fell 10.69% to P25.07 billion, with core income declining 4.97% to P25.26 billion.
Converge ICT Solutions, Inc. managed to increase its Q3 net income by 1.03% to P2.95 billion from P2.92 billion last year, while gross revenues leaped 7.39% to P11.19 billion from P10.42 billion. For the first nine months, net income rose 8.4% to P8.90 billion from P8.21 billion, with nine-month revenues reaching P32.97 billion, an increase of 10.12% from P29.94 billion. The residential services segment brought in P27.75 billion, and enterprise services contributed P5.22 billion.
Looking ahead to 2025, Converge is keeping a revised full-year revenue growth target of 10-12%, down from an earlier estimate of up to 16% due to delays in launching new enterprise solutions and workforce challenges.
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