PLDT hikes capex to P70B for 2019

By Denise A. Valdez
PLDT, Inc. is raising its capital expenditure (capex) by a fifth to at least P70 billion for this year, mostly to fund its network expansion plans.
Manuel V. Pangilinan, chairman, president and chief executive officer of the listed telecommunications giant, and chairman of Metro Pacific Investments Corp. (MPIC), told reporters on Friday the whole group will record a bigger budget for this year.
“I don’t know what the aggregate number is… But if you add the group’s capex, it’s going to be more than a hundred billion this year… PLDT alone will account for at least P70 billion,” Mr. Pangilinan said when asked about MPIC’s capex for 2019.
A P70 billion capex will be 21% higher than the “record” P58 billion capex for 2018. Around 54% of last year’s budget was dedicated to its wireless business and 46% to fixed broadband.
Mr. Pangilinan said higher capex for PLDT will be used for expansion projects such as the rollout of fourth generation (4G) and fifth generation (5G) networks.
“(The capex is) mainly (for) fiber-to-the-home (FTTH) on the fixed side. And for the wireless, it’s making complete substantially our 4G and start constructing the 5G network. So it’s a continuous exercise,” Mr. Pangilinan said.
He also said the government’s initiative to encourage common tower providers will reduce the burden on telcos to build their own cell sites.
“I think it will help our capex, although it’s not a very significant amount of money, but it will help our capex somewhat. So we’re willing to cooperate with these new tower companies,” the PLDT chief said.
Fitch Ratings said in a November report it expects telcos PLDT and Globe Telecom, Inc. to invest higher this year because of the entry of a “third telco” — the Mislatel Consortium.
“Fitch expects this to temper revenue growth and raise the capex pressure on PLDT Inc. (BBB/Stable) and Globe Telecom, Inc. (BBB-/Stable),” the credit rater said then.
Globe had a capex of $950 million (about P49.8 billion) last year. While it has not disclosed its 2019 capex yet, Globe President, Ernest L. Cu previously said they were eyeing a budget “close to it (2018 capex)” for this year.
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