PLDT slashes capex by P20 billion in 2020, virus delays 5G rollout

Ralf Rivas
PLDT mobile revenues jump 40% as people stay at home, but the company posts lower earnings due to higher expenses in the 1st quarter of 2020

MANILA, Philippines – Telecommunications giant PLDT will be slashing its capital expenditures (capex) for 2020 by around P20 billion, as the coronavirus pandemic disrupts global supply chains.

In a virtual briefing on Thursday, May 7, PLDT chairman Manny Pangilinan said capex may fall from P83 billion to around P60 billion due to lockdown restrictions.

Executives also said the rollout of the highly anticipated 5G technology will be pushed back toward the latter part of the year.

Despite the challenges, PLDT posted strong revenue growth of 9% to P41.5 billion in the 1st quarter of 2020, as people used up more data while holed up in their homes. 

Mobile revenues jumped nearly 40%, driven by higher video streaming, social media usage, and people using productivity tools for work-from-home arrangements.

Subscribers consumed 636 petabytes in the 1st quarter, double than during the same period last year and 26% higher than in the 4th quarter of 2019.

“Moving forward, there will be likely some softening of revenue growth in the 2nd quarter this year. But overall, we expect revenues to stay on the growth path versus last year,” Pangilinan said.

Telco core income was lower by 5% to P6.9 billion due to higher depreciation and financing costs, which in turn resulted in greater capex for the 1st quarter.

“The solid performance of our major business groups in 2019 flowing smoothly into the 1st quarter of 2020 provides us the firm footing needed to face the tough trials created by the pandemic in 2020 and beyond,” said Alfredo Panlilio, Smart president and chief executive officer and PLDT chief revenue officer.

Meanwhile, mobile wallet business PayMaya posted strong year-on-year growth across all its businesses, as Filipinos embraced cashless transactions.

PayMaya CEO Orlando Vea said there was an increase in transaction volumes for previously cash-heavy sectors such as pharmaceuticals and groceries as Filipinos shop for essentials.

This, along with the recovery of e-commerce, were able to offset the downturn in volume from travel and leisure. – Rappler.com

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.