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DITO Telecom's Entry May Hurt 40% of PLDT Revenue in 2021

The country's highly anticipated entry of DITO Telecommunity in the Philippines as a new mobile service provider could have a huge impact on the leading telecom company PLDT Incorporated.

According to a global credit rater, the entry of DITO Telecom could affect an estimated 40 percent of brand revenue in the year 2021.

The global rating firm S&P Global Ratings said that the new telecom service providers could shake up the mobile network scene in the country, and will surely snatch customers away from the current giants namely PLDT and Globe Telecom.

S&P Global Rating firms said that they expect the third licensed telco player, DITO Telecommunity (formerly Mislatel) to compete on price on its slated market entry. Some loss of mobile subscribers for PLDT is indeed inevitable, expecially in the context of the Philippines' price-sensitive market.

"About 40 percent of PLDT's revenue will be exposed to this competition, as the third player will compete in the individual mobile space."

During the first quarter of 2019 PLDT's consolidated service revenues totaled P39.6 billion, which is up to five percent from 2018, most of this revenue came from wireless network services. PLDT's net income settled for P6.7 billion during the first three months of 2019, which is down three percent year-on-year.

The international debt watcher S&P said that PLDT is set to keep its dominance over the fixed- line segment such as telephone and broadband lines, but will likely have to spend more and incure bigger debts to upgrade its services, particularly converting to the fiber network.

DITO Telecom on their part has paid a ₱25.7 billion performance bond as it committed to provide internet service with a speed of 27 megabits per second (Mbps) to 37 percent of the population on its first year of operation.

The Philippines has an average mobile internet download speed of 7 Mbps and an average upload speed of 2.2 Mbps, international analytics company Opensignal said in a report last May.


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