Telcos seen to report better results in 2024 amid growing demand


By Ashley Erika O. Jose, Reporter

LISTED telecommunications and information and communications technology (ICT) companies are expected to post better results in 2024, driven by the strong demand for digital services and as firms roll out their expansion plans.

“The telco stocks — their earnings are up. Telcos will always do better. They continue to invest in their expansion. They will not invest billions in their expansion if they do not expect more subscribers,” Philippine Stock Exchange, Inc. (PSE) President and Chief Executive Officer Ramon S. Monzon said in an interview on the sidelines of the BusinessWorld Forecast 2024 economic forum last week

For the third quarter, all listed telecommunications and ICT companies recorded lower attributable net income despite recording higher revenues for the period. Still, almost all of them recorded better profits for the cumulative nine-month period.

“The Philippine ICT/telco industry is expected to continue to grow in [the fourth quarter] of 2023, driven by strong demand for digital services from both consumers and businesses,” Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said in a Viber message.

Pangilinan-led PLDT Inc. reported P9.43 billion in attributable net income for the third quarter, down 12% from P10.71 billion a year earlier, citing a challenging economic environment.

In the third quarter, the company’s combined revenues rose by 1.9% to P52.32 billion from P51.35 billion in the same period last year.

Year to date, the company saw its attributable net income climb by 1.4% to P27.88 billion from P27.5 billion a year ago.

For the nine months to September, the company recorded combined revenues of P156.36 billion, up 2.8% from P152.13 billion in the same period last year, its financial report showed.

Globe Telecom, Inc. also recorded lower earnings for the third quarter, with its attributable net income declining by 27% to P4.97 billion from P6.81 billion a year ago.

It recorded consolidated revenues of P44.27 billion for the quarter, a 3.2% increase from P42.88 billion a year ago, amid strong service revenues.

The listed telecommunications and ICT companies’ growth will hinge on their expansion plans, Mr. Monzon said.

PLDT together with its wireless subsidiary Smart Communications, Inc. has committed to explore emerging technologies for its network enhancement.

In early November, Globe announced that it had secured a total of P12 billion loan which it will use to fund its capital expenditures as it also works to ramp up its 5G deployment.

For the third quarter, Converge ICT Solutions, Inc. logged an attributable net income of P2.08 billion, 3.7% lower than P2.16 billion last year. Its consolidated revenues increased to P8.89 billion, up by 5.5% from P8.43 billion last year.

Meanwhile, DITO CME Holdings Corp. trimmed its net loss to P4.29 billion from a loss of P5.9 billion. Its total revenues climbed to P3.11 billion, expanding by 54% from the P2.02 billion last year.

Next year, telecommunications and ICT companies are projected to deliver higher profits, Mr. Arce said, thanks to the expected growth in the industry.

“However, profitability will also be affected by a number of factors, including, but not limited to, the level of competition in the industry, the cost of network upgrades, and the regulatory environment,” he added.

Some catalysts that could drive growth in the industry will be the continued expansion of the country’s digital economy and the accelerated rollout of 5G technology, Mr. Arce said.

However, cybersecurity attacks may derail this projected growth as cyberattacks may persist and are also expected to increase in the coming years.

“Increased digitization efforts by the many businesses and industries, government, and other institutions would also benefit the industry,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The need to boost telco connectivity in many underserved areas is seen to help benefit the sector, Mr. Ricafort said, adding that these efforts would eventually increase firms’ consumer base as they work towards their digitization initiatives.


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