LOCAL telecom firms are expected to report stronger earnings for the second quarter of this year, but an analyst’s report said the proposed Konektadong Pinoy Bill (KPB) may pose a risk to the market share of incumbent telcos.
The proposed bill is now up for President Ferdinand Marcos Jr.’s signature. It aims to deregulate the data transmission industry to promote healthy competition, improve connectivity in the underserved and geographically isolated areas (GIDAs), and make connectivity more affordable for Filipino consumers.
A BPI Securities Corp., Philippine Equities Research report on August 5 said that telco growth in the second quarter was driven by rising mobile data usage, expanding coverage and robust fintech growth.
The research further indicates that PLDT is expected to benefit from its 5G monetization strategy and the scaling up of enterprise ICT services. The profitability of digital bank Maya, which is partly owned by PLDT, is projected to improve further, supported by rising loan disbursements and margin expansion, with strong momentum seen in both deposits and lending volumes. The onboarding of a hyperscaler client at the Vitro Santa Rosa facility is also anticipated to drive corporate data growth.
For Globe, the report said it expects better core profit growth in the second quarter this year, driven by a rebound in mobile traffic and the expansion of GFiber Prepaid services. Corporate data growth is also expected to benefit from the commercial launch of the data center in Fairview.
For Converge ICT Solutions, the report said it expects the company to sustain its growth trajectory in the second quarter this year, driven by continued uptake of prepaid fiber products and low churn rates in postpaid services. It said Converge is expanding its port capacity and increasing penetration in underserved areas, particularly in the Visayas and Mindanao regions, where demand remains strong.
Meanwhile, the latest report from Unicapital Securities, Inc. (USI) said the proposed KPB may pose a risk to the market share of incumbent telcos.
“While the bill garnered mixed reactions across industry stakeholders, we see the enactment of the measure to intensify competition in the telco sector and accelerate network rollout in the unserved and underserved areas,” USI Research Analyst Peter Louise Garnace said.
The USI report said for incumbent players, “we believe that the KPB may pose risks to market share and regulatory moat. Nevertheless, we see the measure to open up opportunities. In our view, the impact will be asymmetric depending on each player’s network infrastructure, service quality, and ability to pivot toward an open-access business model.”
Based on USI’s analysis of the impact of the Konektadong Pinoy Bill on each telco company — using a scale from 1 to 3 where 1 indicates the least exposure and 3 indicates highly exposed — Converge, with a rating of 1.7, has relatively lower risk exposure compared to PLDT and Globe, which scored 2.0 and 2.3, respectively
