PLDT allots ‘record’ P50-B capex for 2018

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The PLDT logo is displayed at its main building in Makati City. INTERAKSYON FILE PHOTO

MANILLA – PLDT, Inc. is setting aside a record high capital expenditure budget of least P50 billion next year, as it works on improving its network amid the looming entry of a third telecommunications player.

“We will announce a historic high capex next year, north of P50 billion,” PLDT Chairman, President and CEO Manuel V. Pangilinan told reporters on Wednesday.

Next year’s capital spending is up by nearly a third from this year’s P38 billion, and will be used to finance the telecommunications giant’s network expansion and improvement of mobile and fixed-line services.

“We’ll make sure that we’ll future-proof our network,” Pangilinan said.

PLDT, he said, is “trying to get ready in case it happens as early as the first quarter,” referring to the entry of China Telecommunications Corporation (China Telecom), the third player chosen by the Chinese government to invest in the Philippines.

China Telecom’s local partner, however, has yet to be determined, since the Constitution limits foreign ownership in certain industries such as telecommunications to 40%.

President Rodrigo R. Duterte has said he wants a third telecommunications provider to start operating by the first quarter, which would challenge the duopoly of PLDT and Globe Telecom, Inc. in the country.

Reuters reported that China Telecom is still studying the plan to invest in the Philippines.

“China Telecom is currently having a preliminary study on the investment opportunity in the Philippines and no concrete plan has been determined yet,” a company spokeswoman was quoted by Reuters as saying.

FUNDING

Pangilinan said PLDT’s capex for 2018 will be funded through the sale of assets.

“Well, the normal level of around P40-ish billion, the EBITDA (earnings before interest, taxes, depreciation and amortization) can handle that. The incremental capex of around P10 billion, we’ll fund through the sale of assets. We still have receivables from MPIC from the sale of Beacon, so we might sell some of that,” he said.

PLDT has remaining receivables worth P15 billion from parent Metro Pacific Investments Corp. with respect to shares of Beacon Electric Asset Holdings, Inc. and a 6.1% stake in German startup Rocket Internet SE valued at P12 billion.

Pangilinan last November said PLDT upgraded its recurring core profit guidance to P22 billion from the original P21.5 billion, after the nine-month tally rose 5% year on year to P17.36 billion from P16.55 billion.

PLDT has invested around P300 billion or nearly $6 billion in the last decade for its fixed and wireless network infrastructure, which now has 150,000 kilometers of fiber optic cables.

In October, PLDT said it is investing around P7 billion ($136.7 million) in a new Trans-Pacific cable system called Jupiter. The system will be built and operated by a consortium of global firms including Amazon and Facebook.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls.