S&P affirms PLDT rating, notes revenue to be affected by third telco Dito

S&P Global Ratings on Monday affirmed PLDT’s BBB+ rating, but noted that at least 40 percent of its revenue could be exposed to competition due to the entry of third player Dito Telecommunity (Mislatel).

The telco is expected to maintain its “dominant position” in the fixed-line segment but some loss of its mobile subscribers is “inevitable,” S&P said in a statement.

But the telco is expected to preserve “substantial and meaningful” proportions of its wireless market share, it said.

“We expect the third licensed player Dito Telecommunity (formerly Mislatel) to compete on price on its slated market entry in the second quarter of 2020. Some loss of mobile subscribers for PLDT is inevitable, especially in the context of the Philippines’ price-sensitive market,” the credit rating firm said.

“About 40 percent of PLDT’s revenue will be exposed to this competition, as the third player will compete in the individual mobile space,” the statement said.

Dito, formerly known as Mislatel, is the consortium of Davao-based businessman Dennis Uy’s Chelsea Logistics and Udenna Corp with China Telecom. It acquired its license to operate last Monday, July 8.

In a statement, PLDT-Smart public affairs head Ramon Isberto said the telco’s revenues were distributed among its Home, Enterprise and Wireless consumer businesses, making its revenue stream “more resilient.”

Its Home and Enterprise businesses will not be affected by Dito’s entry, Isberto said.

“While our consumer wireless group, which generates about 40 percent of revenues, must contend with the entry of a new telco player, Home and Enterprise which account for about 50 percent of revenues do not face a similar situation,” Isberto said. 

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