PLDT Q3 2024 Earnings Report

PLDT EPS Results

• Actual EPS: $0.68
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

PLDT Revenue Results

• Actual Revenue: $933.44 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

PLDT Announcement Details

• Quarter: Q3 2024
• Date: 11/12/2024
• Time: N/A
• Conference Call Date: Tuesday, November 12, 2024
• Conference Call Time: 2:30AM ET

Philippine Long Distance Telephone Company (PLDT (NYSE:PHI)) is the largest integrated telecommunications provider in the Philippines, offering a comprehensive suite of fixed‐line, wireless, broadband Internet, and digital solutions to residential, enterprise, and government customers. Founded in 1928, PLDT has played a pivotal role in the development of the country’s communications infrastructure, evolving from a traditional operator of long‐distance telephone lines into a diversified digital services provider.

PLDT operates two main business segments: its fixed‐line and broadband operations under the PLDT brand and its wireless services through subsidiary Smart Communications. The company’s network assets include an extensive fiber‐optic backbone, mobile network with LTE and 5G coverage, as well as data centers and cloud platforms that support enterprise ICT solutions. PLDT also offers cybersecurity services, digital payment platforms, and managed services, positioning itself as a one-stop provider for connectivity and digital transformation.

Headquartered in Makati City, PLDT provides comprehensive communications services across the archipelago. Its senior leadership team is led by Executive Chairman Manuel V. Pangilinan and President and CEO Alfredo S. Panlilio, whose strategic initiatives focus on network modernization, product innovation, and expanding digital ecosystems. Through partnerships with global technology and content providers, PLDT continues to strengthen its service offerings and support the country’s shift towards a digital economy.

PLDT Q3 2024 Earnings Call Transcript

Key Takeaways

• Record 9M results: Net service revenues reached PHP144.9 B (+2% yoy) and consolidated EBITDA rose 3% to PHP80.7 B with margins steady at 52%.
• Core growth ex-legacy: Excluding legacy services, net service revenues climbed 5%, with mobile data, fiber and corporate data & ICT accounting for 88% of total revenues.
• Home segment acceleration: Fiber-only revenues grew 6% yoy, churn improved to 1.7%, and Q3 fiber installations hit 228,000—the highest since Q1 2023.
• Enterprise momentum: Enterprise revenues rose 4%, driven by corporate data & ICT (+6%) and ramped capacity at Santa Rosa data center (20 MW energized, 36 MW by 2024).
• Solid balance sheet: Net debt/EBITDA at 2.44× (target 2.0×), CapEx intensity down to 34%, CapEx guidance of DKK 75–78 B, 60% dividend payout and free cash flow pre-dividends targeted for 2025.

Presentation

[Melissa Vergel de Dios, Vice President, Chief Sustainability Officer, and Head of Investor Relations at PLDT Inc]

Afternoon, and thank you for joining us today to discuss the company's financial and operating results for the nine months of 2024. A copy of today's presentation is posted on our website. For those who have not been able to do so, you may download the presentation from www.pldt.com under the Investor Relations section. Kindly note that this briefing is being recorded. The podcast of this event will be available on our website after the call. A QR code for the presentation is on the screen and in the confirmation notices emailed to you.

[Melissa Vergel de Dios, Vice President, Chief Sustainability Officer, and Head of Investor Relations at PLDT Inc]

Joining us today is our Chairman, Mr. Manny Pangilinan, CFO and Chief Risk Officer, Mr. Danny Yu, Atty. Marilyn Victorino-Aquino, our Corporate Secretary and Chief Legal Counsel, and also here with us today is our new Investor Relations Head, Mr. Jake Baidwan, as well as other members of the PLDT Group's management team.

[Melissa Vergel de Dios, Vice President, Chief Sustainability Officer, and Head of Investor Relations at PLDT Inc]

At this point, let me turn the floor over to Mr. Yu to begin the presentation.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

Good afternoon, everyone. Let me share with you highlights of PLDT's financial and operating results for the first nine months of the year. Our net service revenues for the first nine months hit a new high of PHP 144.9 billion, higher by 2% from last year. On a gross basis, service revenue grew by 4% compared to the same period last year. Operating expenses remained stable at PHP 64.2 billion. Consolidated EBITDA increased by 3% to PHP 80.7 billion, with margins steady at 52%. Telco core income, excluding the impact of asset sales and Maya, rose by 2% to PHP 26.6 billion.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

On a segment basis, our individual business recorded a PHP 1.5 billion, or a 2% rise in revenues, to PHP 62.1 billion. Our enterprise segment registered revenues of PHP 45.2 billion, 4% or PHP 1.3 billion higher than last year, while our home revenues were stable year-on-year at PHP 45.2 billion.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

Fiber-only revenues increased by 6%, or PHP 2.4 billion, to PHP 41.7 billion. We continue to highlight that there are underlying revenue streams registering stronger growth than the headline numbers. This reflects the drag from legacy revenues. Overall, excluding the impact of legacy revenues, net service revenues rose by 5%, with the growing segment revenues accounting for 88% of the total.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

For the individual business, mobile data, which represents 89% of total segment revenues, grew 5% year-on-year, more than doubling the segment growth of 2%, which reflects the drag from legacy SMS and voice. The overall home segment, on the other hand, remained stable year-on-year, but fiber-only revenues, which now account for 92% of the segment, actually grew by 6%. Corporate data and ICT accounting for 72% of the total enterprise revenues rose by 6% compared to the overall segment increase of 4%.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

Let me share more details of the respective business segments. Service revenues for the wireless business rose by 2% in the first nine months of 2024, with postpaid and prepaid revenues higher by 3% and 2%, respectively. Mobile data remained to be the growth driver, accounting for 89% of the segment revenues. Blended ARPU rose by 6%, mainly from a 7% rise in average usage and a 10% growth in data traffic.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

Notable for the segment is the continuing increase in active mobile data users to 41.2 million from 40.5 million as of the end of June. We are currently revitalizing the mobile data playbook to reaccelerate the segment's performance. Part of this includes subscriber acquisition through continued site rollout, capacity expansion, and geo-targeted campaigns, upselling to higher value offers, and further stimulating usage through enhanced service offers and improved customer service.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

Fiber revenues, which account for 92% of our home business, continue to rise steadily, having registered a 6% year-on-year growth. We continue to focus on managing churn and accelerating fiber installations. Improvement in service delivery continues to register industry-leading fiber churn levels of 1.7% in nine months of 2024 from 1.91% in nine months of 2023. Fiber installation capacity continues to ramp up, with Q2 2024 fiber installed of 228,000, the highest since the first quarter of 2023.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

Home fiber ARPU remain at around the 15,000 level, with lower price plans offered selectively in areas where we have disparate capacity. There has been a strong market adoption of new broadband products, which include a Fiber Unli-All Bundle, lower-priced postpaid Fiber plan, and a home Wi-Fi 5G plan.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

Other network initiatives include leveraging our fiber and mobile networks to grow the segment, including expanding in green and brownfield areas, as well as building and multi-dwelling unit fiberization. PLDT continues to enjoy strong brand equity and superior network quality, making it a formidable competitor in the market. Growth in the enterprise is driven by continued focus on pushing enterprise solutions.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

The Enterprise segment registered a 4% growth, with Corporate data and ICT being the growth drivers, having grown 6% during the period. Included among the revenue streams that recorded improvements were core connectivity, higher ICT revenues from managed IT services, cybersecurity solutions, data center, and cloud services, plus A2P messaging services. Locators in our Santa Rosa data center, energized in July have started to come on board. Approximately 20 MW of a 36 MW IT load capacity are expected to be available by the end of 2024.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

The Vitro Santa Rosa data center is well-positioned to capture growth from a hyperscale and AI data center demand ahead of competition. Amid pressure from higher costs to operate, total OpEx for the period was marginally higher by PHP 300 million, as we continue to identify and extract operating cost efficiencies. EBITDA at the end of September 2024 rose by 3% to PHP 80.7 billion on the back of higher revenues. EBITDA margin was steady at 52%. Telco core income for the first nine months of 2024 grew by 2% to PHP 26.6 billion, reflecting the impact of higher EBITDA, partly offset by higher depreciation and financing costs.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

On a reported basis, PLDT income rose 1% to PHP 28.1 billion. Our share in losses from Maya continues to decline, with Maya on track to achieve bottom line breakeven towards the end of 2024.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

PLDT's balance sheet remains healthy, with net debt to EBITDA of 2.44 times as of the end of September. We remain focused on bringing down leverage to the 2.0 times level, which we expect to attain with the anticipated increase in EBITDA, reduction in CapEx, and with the balance of the tower sales proceeds. Discussions for the potential monetization of our data center business are still ongoing.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

Gross debt stood at PHP 272.6 billion, of which 14% are dollar-denominated and 5% unhedged. The average interest cost for the period stood at 5% pre-tax, with the average life of debt at 6.7 years. Total CapEx amounted to PHP 52.3 billion at the end of September, consisting of network and IT CapEx of PHP 46.7 billion and business CapEx of PHP 5.7 billion. CapEx intensity, or CapEx to service revenue, stood at 34% for the period versus 37% in 2023.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

Of the remaining PHP 33 billion commitment, net of advances to major vendors, the remaining commitment has been reduced to PHP 4.2 billion. For 2024, our CapEx guidance is PHP 75 billion-PHP 78 billion, consistent with our aim to continue to reduce CapEx . The increase in the number of unique 5G devices and 5G data traffic continues into 2024, which we expect to be sustained as the price of 5G devices trends downward. 5G adoption is one of the emerging growth streams of our individual business.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

Moving on to Maya, our fintech investment. Maya Bank continues to be the Philippines' number one digital bank based on deposit balances, which grew by 52% to PHP 36 billion at the end of September. The bank continues to register robust growth within bank customers and borrowers. Loans disbursed live to date stood at PHP 67 billion at the end of September.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

Maya takes pride in its unmatched speed to market, delivering multiple high-tech banking products for consumers, SMEs, and microenterprises. With the Landers Cashback Everywhere Credit Card, a collaboration between Maya and Landers, Maya delivered the first digital bank credit card in the market. As mentioned earlier, Maya is on track to turn bottom line positive towards the end of 2024. We're also pleased to report that PLDT's score in the S&P Global Corporate Sustainability Assessment jumped by 13 points to 71%, the highest in the Philippines as of November 2024.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

In October, PLDT also secured a PHP 2 billion social loan from HSBC for the expansion of its fiber network to reach the fourth and sixth-class municipalities. This is in line with its commitment to narrow the digital divide and support the government's initiative to connect the unconnected. Our outlook for 2024 continues to be one of guarded optimism.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

We expect revenues from our data and broadband businesses to grow by mid-single-digits, excluding the impact of legacy revenues. With our continued pursuit of operating efficiencies and cost rationalization, our EBITDA is anticipated to grow by mid-single-digit. Telco core for 2024 is expected to land north of PHP 35 billion. In line with our commitment to lower the CapEx headline number and CapEx intensity over time, our CapEx guidance for 2024 remains at PHP 75 billion-PHP 78 billion.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

We remain committed to a 60% dividend payout, to bringing leverage back to our target 2.0 times net debt to EBITDA level, and achieving positive free cash flow before dividends by 2025. Thank you.

[Melissa Vergel de Dios, Vice President, Chief Sustainability Officer, and Head of Investor Relations at PLDT Inc]

So, we're now ready to take your questions. You may type your questions in the Q&A box at the upper right side of the screen.

[Melissa Vergel de Dios, Vice President, Chief Sustainability Officer, and Head of Investor Relations at PLDT Inc]

You may also click the raise hand button and wait for your name to be called before you unmute your microphone. You may also send your questions via email to pldt_ir_center@pldt.com.ph. Please indicate your name and company name so we can get back to you for any additional information. We have a raised hand from Luis Hilado. Luis, you may unmute your mic.

[Luis Hilado, Head of Philippines Research at Citi]

Hi, good afternoon, and thanks for hosting the call. Congratulations on the results. We just had three questions. The first one is, we noticed that fixed line voice continues to be quite healthy in this quarter, just like the prior quarter. If you could remind us what's driving that? Second question is if we could get an update for the timeline of the data center stake sale and whether you've made a decision whether to sell a majority stake or a minority stake.

[Luis Hilado, Head of Philippines Research at Citi]

And last one is financing costs seem to be up double-digit Q-Q and year-on-year. Is there any one-off reason for that?

[Melissa Vergel de Dios, Vice President, Chief Sustainability Officer, and Head of Investor Relations at PLDT Inc]

No, Jeremiah, take the first question.

[Jeremiah de la Cruz, Senior Vice President and Head of Consumer Business at PLDT Inc]

Yes, so good afternoon. It's Luis, is it? Yes. Sorry, I'll start by addressing, I think, your first question, which was fixed line voice. And the question was around what's actually driving that continued sort of revenue stream on the voice side. So that's predominantly, there's two parts of voice revenue. One is voice that's coming through from our corporate subscribers. And with that has actually remained quite steady. If you look at the total number of voice on top of that, the decline that we're seeing quarter on quarter, year on year has actually plateaued out now. So it is now into the long tail component.

[Jeremiah de la Cruz, Senior Vice President and Head of Consumer Business at PLDT Inc]

But the second part of voice is actually we do have some voice in our fiber business as well. As you would know, in our Unli-All product, which is our 1399 package, we have an unlimited telephony, unlimited broadband, five mobile SIMs, as well as Cignal Pay TV. So when you factor all of that in, we actually do have a voice allocation as part of that package. And that's why you'll see actually voice remain as part of the overall portfolio. And sometimes actually you'll see it grow a little bit because it's predominantly an allocation basis.

[Luis Hilado, Head of Philippines Research at Citi]

Thanks, Jeremiah. That's pretty clear.

[Jeremiah de la Cruz, Senior Vice President and Head of Consumer Business at PLDT Inc]

Thank you.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

Discussion on data centers are still ongoing. We hope to complete this by mid-end of next year. Remember, this requires PCC approval. Then to your last question, what was, sorry, what was your last question again?

[Melissa Vergel de Dios, Vice President, Chief Sustainability Officer, and Head of Investor Relations at PLDT Inc]

Financing costs.

[Luis Hilado, Head of Philippines Research at Citi]

Yes, financing costs for the quarter seem to be up double digit.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

Generally, financing costs, the increase in financing costs is mainly due to the increase in the average interest rate by 50 basis points. Plus, of course, towards the third quarter, we also had additional loan of about PHP 15 billion.

[Luis Hilado, Head of Philippines Research at Citi]

Thanks, Danny. Very clear. Thanks, Melissa.

[Melissa Vergel de Dios, Vice President, Chief Sustainability Officer, and Head of Investor Relations at PLDT Inc]

Thanks. Thanks, Luis. There's a question on the status of the tower sales. What is the outlook on the completion of the sale? What's the tower sales at any moment?

[Kat Abelarde, President and CEO at PLDT Global Corporation]

Well, we're still, we're in the process of trying to sell a majority of the towers that are still not, that have not been purchased, but have been covered by existing contracts. So that's for the rest of the year.

[Kat Abelarde, President and CEO at PLDT Global Corporation]

You can, well, I think we will be able to sell more or less 90% of the remaining towers that we contracted to the last two common tower providers that we have engaged in, engaged with. And but we continue to sell other sites that we have covered in previous contracts. And so that's the, but we may have to do that until next year. But for this year, we will close around 90% of the towers that we have contracted with the last two common tower providers. Thanks, Jeremiah.

[Melissa Vergel de Dios, Vice President, Chief Sustainability Officer, and Head of Investor Relations at PLDT Inc]

There's a question on wireless. Can you describe the competitive situation in the wireless space? Mr. Martirez.

[Melissa Vergel de Dios, Vice President, Chief Sustainability Officer, and Head of Investor Relations at PLDT Inc]

Well, hi. Thank you for having me, guys.

[Mark David Martinez, VP at PLDT Inc]

On that question, let me start by giving my philosophy that while the situation is one where I would say is oversubscribed, the Philippines being a 110 million population subscription of phones numbering over 130 million makes it oversubscribed. And in your banking terms, probably you call it overbanked, isn't it? So, in a situation like that, I think it doesn't make sense that players in this space compete on the basis of subscriber acquisition because that is going to be costly, that is destructive, and it's not healthy.

[Mark David Martinez, VP at PLDT Inc]

In my view, what players should be doing is adding value in their offerings so that way we all contribute to expanding the market. Then we just leave it to those who work the hardest to get their fair share. That's my mantra going in. If there are any questions, I would love to answer.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

Mr. Reyes, Danny and John.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

Hi. Thank you for the opportunity. Just one quick follow-up, actually, on mobiles. So, the overall revenue actually dipped sequentially, and I think your competitor ascribed that to the impact of typhoons. I was wondering whether you saw the same for PLDT. More importantly, I think the net subscriber, there were net subscriber reductions also in the third quarter. So, any color on that would be very helpful. Thank you.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

Well, I wish I can say that weather is a cause for problems in business, but I'm not one who would like to say that. I think it's a matter of, it's a matter of planning. It's planning your network, planning your business. So we don't have to blame the weather if we fall flat on our business. Does that make sense?

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

Yeah, sure. But I think quarter and quarter, there was a dip in mobile revenue. So I was wondering what you think might have caused that also. And there was, I think, 500,000 subscribers which churned out on a net basis. Any explanation for that would be helpful. Thank you.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

Well, generally, I think the other major player and us suffered the same kind of decline. But in our case, more than that, we did suffer a few a month where in a series of days within that month, September, that is, we had problems with network outages. So we've looked into that. We've made some quick fixes, but I think we are still going to make sure that we continue to have a more structural fix moving forward. So far, so good. It hasn't come back. And cross fingers.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

We'd like to end the rest of the year on a high note.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

Thank you.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

Thank you, John. Next question on enterprise, on the data center. What is the takeoff of the new data center in Santa Rosa? Jojo.

[Joseph Ian Gendrano, Senior VP and Head of Enterprise at PLDT Inc.]

Sure. Good afternoon. Thank you for the question. So, we've opened Vitro Santa Rosa, our 11th DC. And with on track, we fitted out for 20 MW of capacity before the end of the year and leading up to 36 megawatts by next year. So, the DC is open. We have interest from enterprise customers and hyperscalers. We already have an anchor tenant testing in Vitro Santa Rosa. So there's already an active customer.

[Melissa Vergel de Dios, Vice President, Chief Sustainability Officer, and Head of Investor Relations at PLDT Inc]

There's a question on the outlook for CapEx for 2025.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

For CapEx for this year is around PHP 75-78 million. We're still in the planning stage right now. So, we still don't have the number for 2025.

[Melissa Vergel de Dios, Vice President, Chief Sustainability Officer, and Head of Investor Relations at PLDT Inc]

You went with Maya. Are they on track to become profitable? And what is the timeline for an IP?

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

They committed to have a P&L breakeven by December of this year. So, I guess they're going to be profitable the whole year of 2025. IPO timeline. There is no definite timeline for the IPO. Any more questions?

[Melissa Vergel de Dios, Vice President, Chief Sustainability Officer, and Head of Investor Relations at PLDT Inc]

There's a question that was received in the email about the breakdown of our other expenses. We will deal with that offline and will send the required information. A question from home or on home. What accounts for the vendor or record-breaking installs for the quarter? Jeremiah.

[Jeremiah de la Cruz, Senior Vice President and Head of Consumer Business at PLDT Inc]

Thank you for that question. Actually, it's multiple factors that have actually helped drive the improvement in our home business. I think at the beginning of this year, we mentioned this at the very, very get-go, which was reaccelerating our rollout.

[Jeremiah de la Cruz, Senior Vice President and Head of Consumer Business at PLDT Inc]

2023, we saw some challenges, and we actually had a very, very minimal rollout in 2023. In 2024, we have actually picked that up, and we have actually been able to roll out just over 400,000 ports, of which we're starting to see the impact from a revenue perspective. Combined with the rollout that we've actually reaccelerated, the second one is we've been able to increase the sales capacity, so coupled with more ports to be able to sell in new selling areas, we've been busy working with our sales partners to be able to ramp up the selling capacity, and we're starting to see that actually flow through as well.

[Jeremiah de la Cruz, Senior Vice President and Head of Consumer Business at PLDT Inc]

Finally, the other major factor is in the second quarter, we made some major interventions, so we had a restructure in terms of our channel partner commissions and our engagement with our sales partners.

[Jeremiah de la Cruz, Senior Vice President and Head of Consumer Business at PLDT Inc]

We also launched some new products. So you would have seen an enhanced Unli All product proposition where we provided more value, greater speeds, and actually started to include mobile as part of the overall bundle. Second, we also introduced the 899 value plan. So it's the first time that we've actually been introducing a sub-1,000-peso plan from PLDT. And the third, we introduced prepaid fiber.

[Jeremiah de la Cruz, Senior Vice President and Head of Consumer Business at PLDT Inc]

So I think the combination of all of those things have actually helped drive an improvement in our uptake in the third quarter. It's still far from where we want it to be. The marching orders are very, very clear, and that's continued to ramp up to previous higher levels. And that's what we actually anticipate moving forward.

[Jeremiah de la Cruz, Senior Vice President and Head of Consumer Business at PLDT Inc]

We are expecting to see an increase in our installations, obviously making sure that some of the weather does permit and are not hampered with some of the adverse typhoons, etc. We are expecting and anticipating a continued ramp-up in the home business going into 2025.

[Melissa Vergel de Dios, Vice President, Chief Sustainability Officer, and Head of Investor Relations at PLDT Inc]

Next question is, could you provide more color on the press release this morning about the investment in Bayad? Jeremiah?

[Kat Abelarde, President and CEO at PLDT Global Corporation]

We are increasing the investment in Bayad to 67%. So we are investing an additional 57% in Bayad. That investment will require BSP approval and PCC approval. We do not expect that to be implemented until after the second half of next year. That is supposed to help in the development of the current payment gateway of Bayad, which is what we basically need for the Kayana business that we are building.

[Kat Abelarde, President and CEO at PLDT Global Corporation]

Thank you, Jeremiah. Next question is on the.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

I can request cut to additional explanation on the commercial intent for Kayana.

[Kat Abelarde, President and CEO at PLDT Global Corporation]

Hey, hi, so this is Kat Abelarde. I think a couple of months ago, we did mention our initial investment in Bayad. At that point, it was just 10%. We made that investment alongside the full acquisition of MultiPay, another of our payment companies that exist within the group. Now, within the past three months, we are very happy with what we saw, and we feel that there is greater synergy that we can derive by bringing all of our payment companies or fintech companies together.

[Kat Abelarde, President and CEO at PLDT Global Corporation]

We understand that that's going to take some time, and that really is part of a longer process, but we want to start in Bayad as our first mover into a bolder stance in the fintech space. Just to mention that PLDT's interest in Kayana is moving forward.

[Melissa Vergel de Dios, Vice President, Chief Sustainability Officer, and Head of Investor Relations at PLDT Inc]

45%, yes. Next question is on DITO. What is the impact of DITO on your operations? Mr. Boy.

[Butch Jimenez, COO at PLDT Inc]

What's the impact of DITO on the operations or on the market?

[Melissa Vergel de Dios, Vice President, Chief Sustainability Officer, and Head of Investor Relations at PLDT Inc]

In our business.

[Butch Jimenez, COO at PLDT Inc]

In our business. Well, with DITO being a challenger, which I think, unfortunately, he comes in as a challenger at this time when he's challenging two major players when the whole industry is overbuilt. It would have been a different story if he comes in challenging existing major players when, let's say, the penetration rate is maybe 50% or less. But he's coming in at a time when it's overbuilt. So, anything he does will always be destructive.

[Butch Jimenez, COO at PLDT Inc]

But there is an elegant way of addressing this because now with technology, you can have real targeting. You can be very selective. And that's exactly what we have been doing.

[Butch Jimenez, COO at PLDT Inc]

So, but credit to DITO, they have taken their own bounds of play. But we made sure that they did not overstep the bounds. We hope that we have carried out the message. We've sent the message to them enough that the way to compete is basically to add value, to make customers happy, and to expand the market. And hopefully, in due time, they will actually align with it.

[Melissa Vergel de Dios, Vice President, Chief Sustainability Officer, and Head of Investor Relations at PLDT Inc]

Thank you. Next question. What are your initiatives around AI?

[Joseph Ian Gendrano, Senior VP and Head of Enterprise at PLDT Inc.]

Thank you for the question. So, AI continues to be a focus for the company. We see two main use cases or two main buckets, areas where it can really help the PLDT group. First one is it improves our ability to deliver exceptional customer experiences. So, we have a couple of, say, AI bots in the environment that help us be more efficient in collecting dues, for example.

[Joseph Ian Gendrano, Senior VP and Head of Enterprise at PLDT Inc.]

And we continue to work with the various business units to ensure that we nurture up-and-coming use cases, be it voice or text-based or even video. The second area where AI is important is around operational efficiency. There's a couple of areas that we're targeting, but a lot of that is actually hinged on our OSS transformation initiatives that should enable us to be more efficient in many areas with regards to network operations, things like accuracy and facilitation of how we roll out, identifying faults in the network, proactively doing troubleshooting.

[Joseph Ian Gendrano, Senior VP and Head of Enterprise at PLDT Inc.]

And so there's a lot of good work that's being done throughout the company so that we can continue to nurture the power of AI. Next question is also for you, Joe.

[Melissa Vergel de Dios, Vice President, Chief Sustainability Officer, and Head of Investor Relations at PLDT Inc]

What are the plans for a new data center? So we've opened the 11th. We are looking already for the 12th location.

[Joseph Ian Gendrano, Senior VP and Head of Enterprise at PLDT Inc.]

So yeah, we will build ahead of demand and continue to expand. Please raise your hand or chat with your tech questions in the chat box if you have any questions. We'll do a final round. There are no questions in the queue.

[Joseph Ian Gendrano, Senior VP and Head of Enterprise at PLDT Inc.]

There are no further questions. I'll hand over the floor to Mr. Yu to give his concluding remarks. Or Jimenez, our COO for PLDT, to give the concluding remarks.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

Good afternoon. On behalf of MVP, I'd just like to thank everybody who joined the call today. I think we have a very challenging 2024, but looking forward to 2025, we expect a more robust performance for both PLDT and Smart. And we're seeing that in our second-half numbers and our second-half growth. And so we look forward to being able to share with you our plans for next year during the next call.

[Danny Yu, CFO and Chief Risk Officer at PLDT Inc]

But as Mr. Pangilinan said earlier, just a couple of more days, still Christmas. So Merry Christmas to everybody. That concludes today's briefing.

[Melissa Vergel de Dios, Vice President, Chief Sustainability Officer, and Head of Investor Relations at PLDT Inc]

As always, should you have any further questions or clarifications, please reach out to PLDT Investor Relations at PLDT_IR_Center@PLDT.com. Thank you for your.

Participants

Executives

• Butch Jimenez, COO
• Mark David Martinez, VP
• Joseph Ian Gendrano, Senior VP and Head of Enterprise
• Danny Yu, CFO and Chief Risk Officer
• Melissa Vergel de Dios, Vice President, Chief Sustainability Officer, and Head of Investor Relations
• Jeremiah de la Cruz, Senior Vice President and Head of Consumer Business
• Kat Abelarde, President and CEO

Analysts

• Company Representative
• Luis Hilado, Head of Philippines Research at Citi