Sitio Royalties Q1 2024 Earnings Call Transcript

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Provided by Quartr
May 9, 2024

There are 10 speakers on the call.

Operator

Good afternoon and thank you for joining us today to discuss the company's financial and operating results for the Q1 of 2024. A copy of today's presentation is posted on our website. For those who have not been able to answer, you may download the presentation at www.plt.com under the Investor Relations section. Kindly note that this briefing is being recorded. A podcast of this event will be available on our website after the call.

Operator

A QR code for the presentation is on the screen and if the confirmation notices emailed to you. For today's presentation, we have with us our Chairman and President, Mr. Manny Pangidina Sir Danny Yu, Chief Financial Officer and Chief Risk Management Officer, Ernie Pangadellakino, our Corporate Secretary and Chief Legal Officer, Mr. Orlando Weyha, Founder and CEO of IIIF Philippines as well as other members of the PLDT Group's management team. At this point, let me turn the floor over to Mr.

Operator

Yoo to begin the presentation.

Speaker 1

Good afternoon, everyone. Allow me to share with you PLDT's financial and operating results for the Q1 of 2024. Consolidated service revenue for the Q1 grew by 3% to 48,700,000,000 year on year. On gross basis, service revenues were higher by 5% compared to the same period last year. Expenses grew moderately by 1% to TWD21.4 billion.

Speaker 1

Consolidated EBITDA rose by 5% to 27,300,000,000 with EBITDA margin stood at 52%. Telco core income excluding the impact of asset sales in Maya, expanded by 8% to 9,300,000,000. Next, please. On segment basis, the strongest growth was registered by our individual or mobile business having grown 7% to or 1,300,000,000 to 21,100,000,000 in the Q1. The enterprise segment recorded a 3% revenue increase to R12.1 billion.

Speaker 1

While Home segment revenues were stable year on year at R15 billion, Fiber revenues were higher by 7% or 900,000,000 compared to the same period last year. Let me now go through the segments in greater detail. On this slide, we highlight that while the headline service revenue growth stood at 3%, the actual improvement excluding the drug from legacy revenues stands at 8%. In the individual segment, mobile data accounting for 88% of the total segment revenues grew by 11% year on year versus segment growth of 7% which reflected the impact of the drag from legacy SMS and voice. Fiber only revenues which account for 92% of home segment revenues rose 7% while the overall home segment revenue were stable year on year.

Speaker 1

Corporate data and ICT, the growing revenue streams under the enterprise segment were higher by 8% stronger than the overall segment revenue increase of 3%. Next, please. Service revenues for the individual segment jumped 7% in the Q1 reflecting strong data monetization. Blended ARPU was higher by 21% compared with a 10% rise in average usage. Note that the seasonal quarter on quarter dip in the Q1 was lower than the dip in the same quarter last year.

Speaker 1

Other indicators of improvement in segment performance are the increase in mobile data users to 39,400,000, an 11% growth in mobile data revenues and a 7% rise in each of prepaid and postpaid revenues. Among the initiatives to accelerate growth are lacking in customers for longer periods, driving retention with eSIMs, growing the adoption of 5 gs and a structured price laddering for prepaid. Next, please. 92% of revenues of the home segment are now from the fiber business. Fiber only revenues continued to improve recording a 7% rise year on year to RMB13.7 billion.

Speaker 1

Home fiber ARPU saw improvement year on year and remained at around the 1500 level. Increased focus on quality of services helped reduce churn. Fiber churn improved to 1.82 percent for the Q1 of the year. PLDT is of the view that there are unserved and underserved markets in the home broadband space. These include new areas, potential customers at the lower end of the market as well as niche markets at the higher end.

Speaker 1

PLET continues to leverage its unique advantage of having an integrated network which enables it to offer a suite of fixed and wireless services at different price points to cater to different segments of the market. PLDT continues to enjoy strong brand equity and superior net worth quality making it a formidable competitor in the market. Next. While the Enterprise segment registered a 3% year on year growth in the Q1 of the year, the growth from corporate data and ICT were stronger at 8%. The growth drivers were core connectivity which grew 2% due to higher fiber and managed IT data revenues, Higher ICT revenues from cloud services, EPLDT managed services, as well as technical solutions.

Speaker 1

Worth noting is the growing revenue contribution from A2P or application to phone services which are the SMS OTP or one time password messages related to online transactions. Included in our enterprise offers are differentiated SD1, managed networking and IoT platform portfolio of services. We also continue to expand our capabilities in AI and Cloud. The Santa Rosa data center remains on track with the first 10 megawatts capacity expected to come on stream by July this year. Pooled capacity is expected to be a year ahead of competition, making EPLDT well positioned to serve the existing robots' demand from hyperscalers.

Speaker 1

Total cash opex was moderately higher by 600,000,000 in the 1st quarter, offset by decreases in cost of services, provisions and subsidies resulting in a minimal 1% rise in total OpEx. The company remains focused on extracting operation efficiencies as well as cost management. Consolidated EBITDA for the 1st 3 months of 2024 rose 5% to 27,300,000,000 setting a new record mainly from higher revenues. EBITDA margin stood at 52%. 2024 registered a strong start with telco core income for the quarter of 9 point 3,000,000,000 higher year on year by 8% from 8,600,000,000 in 2023, reflecting the impact of higher EBITDA partly offset by higher financing costs and tax provision.

Speaker 1

On reported basis, PLDT income expanded by 9% to 9,800,000,000 mainly from derivatives and tower sales gains. Note that our share in losses from Maya for the quarter stood at about 400,000,000 lower than last year and consistent with the expectation of Maya's bottom line breakeven in the last quarter of 2024. PLDT's balance sheet remains healthy with net debt to EBITDA at the end of the quarter at 2.29 times, marginally better than the end of 2023. We remain focused on achieving our target leverage of 2.0 times, which we expect to attain with the anticipated increases in EBITDA, reduction in CapEx, and with the balance of the tower sales proceeds. Gross debt amounted to RMB257 billion of which 15% are dollar denominated and 5% unhedged.

Speaker 1

Interest cost for the period stood at 4.8 percent pre tax while the average life of debt is 6.9 years. Next, total CapEx for the quarter stood at 15,700,000,000 consisting of network and IT CapEx of 14,100,000,000 and business CapEx of 1,600,000,000. CapEx intensity stood at 30% for the quarter. Of the 33,000,000,000 commitment net of advances to major capex vendors, the remaining commitment has been reduced to 10,300,000,000. For 2024, our CapEx guidance is 75,000,000,000 to 78,000,000,000 consistent with our aim to continue to reduce CapEx.

Speaker 1

The growth in the number of unique 5 gs devices and 5 gs data traffic continues in 2024. As mentioned earlier, growing 5 gs adoption is one of the growth levers of our individual business. SMAS was recently awarded 5 gs Coverage Experience Award by OpenSignal.

Speaker 2

I'll

Speaker 1

turn you over to Shailesh for Maya.

Speaker 2

Thank you, Danny. So Maya continues to be at the forefront of driving digital financial services in the Philippines. And we achieved a very strong growth by leveraging our robust ecosystem across both consumers and enterprise by putting Maya Bank, our digital bank at the heart of it. Within 2 years of launch, now Maya Bank is the largest digital bank in the Philippines And this was achieved through a delivery of innovative banking solutions by leveraging our very large and diverse customer base comprising both various consumers and also various enterprises. Some key figures to share.

Speaker 2

By the end of March 2024, we had 3,400,000 depositors. This was nearly double of the number that we had at the end of quarter 1 in 2023. Our deposit balance grew to Ps. 29,000,000,000, which was again a substantial increase of over 40% from the same period last year. And importantly, our loan disbursement from the launch of our loans has caused now the 34,000,000,000 dollars mark in terms of total loans disbursed.

Speaker 2

To give some more color across the segments, on the enterprise side where we provide end to end merchant acquiring and payment processing solutions, we continue to solidify our status as the Philippines payment backbone by enabling large, small and micro businesses to accept digital payments. To give you some idea of our size and scale, Maya processes 45% of all transactions by count and 49% by value for QRPH, the common QR standard in the Philippines in the Q1 of 2024. We have now started providing banking services to the various businesses, allowing merchant partners to open their business deposit account digitally and offering uncollateralized short term working capital loans to the merchants of up to Ps. 2,000,000 on the back of the payments business with us. On the next slide, for the consumer side of the business, we are the pioneers for high engagement banking, which gives customers a high interest rate on their savings account on the back of them doing a lot of their activity on payments, transactions, bills payment and the likes of that, which gives us deep insight into their behavior and goes into then our credit scoring models.

Speaker 2

Combined with a strong update on our new product Time Deposit Plus, As I mentioned, we've seen a big growth in our deposit base to 3,400,000 customers. As of December 2023, based on the data published by ESP, the Central Bank, Maya accounted for 51% of the depositor base of the digital banks in the Philippines. Now Maya Credit has been at the forefront of providing fast, convenient, short term unsecured loans for customers and we have introduced new lending products like personal loans, which are of longer durations. These loans are now being offered for mobile device financing for smart customers and to PLDD home subscribers. We continue to further drive financial inclusion across the Philippines, but signing up with for loan channeling deals with partners who are qualified and certified digital lenders in the Philippines, starting with the Fintech lending company, Global Fintech Lending Company, Talat, and we will continue to expand other such partnerships.

Speaker 2

So overall, we continue to see month on month and quarter on quarter strong performance and continue to see strong revenue growth and with the control on expenses, a reduction in the cash burn with the eye of getting to positive cash by the end of this year.

Speaker 1

Our outlook for 2024 is one of optimism. We anticipate mid single digit growth underpinned by robust increases in data and broadband revenues across the business segments. Supported by the expected top line growth and continuous focus on operating efficiencies and cost management, we expect EBITDA to grow by its mid single digit as we attempt to expand EBITDA margin beyond the current level. We're also looking to end 2024 with a telco core north of 35 1,000,000,000. Consistent with our commitment to lower the CapEx headline number and CapEx intensity over time, our CapEx guidance for 2024 is 75,000,000,000 to 78,000,000,000.

Speaker 1

This includes fresh CapEx for the year and the deliveries of prior year's commitments. Reiterate our commitment to a 60% dividend payout and our continued focus on deleveraging back to our target of 2.0 times net debt to EBITDA and achieving positive free cash flow after dividends, which we expect by 2026.

Operator

May you also send your questions via email to plttircenterpldt.com.pubs. Please indicate your name and company name so we can get back to you for any additional information you may Would you characterize the competitive landscape in the wireless

Speaker 3

Respond to the question on the wireless space and the competitive landscape, we see continued push for service quality. We can sense that from the growth in the network build, not just from smart, but from the other place in the industry. 2nd, there's also a lot of emphasis now on ensuring that we remain relevant to customers. There are some behavioral shifts that we are seeing with respect to the customer base. We understand that if we look at time, place and occasion of use for mobile data with the current issues on hit index, employment and all the macroeconomic indicators, we now have to take a look at offers that promote longer validity, probably higher bandwidth and understanding especially those customers who have probably difficulties and who are on 15 or 30 payday kind of schedule.

Speaker 3

So we have to accommodate these requirements of the customers in order to provide not just value but to ensure better CX over time.

Operator

Ranjan, you may unmute your mic.

Speaker 4

Hi, can you hear me? Hello. Hi. Can you hear me?

Operator

Yes. We can hear you, Ranjan. Okay.

Speaker 4

Hi, thank you for the presentation. It's Ranjan from JPMorgan. Two questions from my side. Firstly, on your guidance on telco core income of MXN 35,000,000,000 or more, you've already achieved Ps. 9,300,000,000.

Speaker 4

So is it possible to tighten the guidance further like not a $35,000,000,000 is a pretty wide range. Like how should we be thinking about it? Will it be $36,000,000 $37,000,000 $40,000,000 If you can give some more color around this. And secondly, on your guidance of positive free cash flow after dividends in 2025, But if you think of 2024, would you be positive free cash flow before dividends? Thank you.

Speaker 1

For your first question, I think we have to consider the seasonality of the revenues. So for now, we're still looking at north of 35,000,000,000. So what was the second question? Sorry, Raja, I didn't hear that quite clearly. Free cash flow.

Speaker 5

We showed free cash flows in the Q1. So is it likely

Speaker 4

So the question is like, can you expect PLED to be free cash flow positive before dividends in 2024?

Speaker 5

But maybe I should step in, let's say? Ranjan. Ranjan. You're with JPMorgan?

Speaker 4

Yes, that's right.

Speaker 5

Okay. Well, certainly, mathematically, you're correct, right? But of course, the word doesn't work to perfection in terms of mathematics. Clearly, the internal target is higher than the $35,000,000,000 that you have indicated. I think we'll get give you a better fix on the numbers once we announce our first half results sometime in late August.

Speaker 5

But the internal targets are certainly approximate the numbers that you have indicated. So we're certainly shooting for a number that is higher than 35 $1,000,000,000 indeed so far if you could get if the wireless business maintains a momentum, it established since the Q4 this last year and the Q1 this year then that will help. I think we need to get the home broadband going, starting the 2nd quarter and the enterprise as well. We could achieve a greater level of those for these 3 revenue streams for the balance here. 2nd part is actually the best quarters typically for smart and for the industry.

Speaker 5

So, certainly with strides to achieve the numbers, close enough to the numbers that you have indicated. And yes, the free cash flows, it's likely that we will produce free cash flows before dividends for the whole year. And if you're successful in disposing of some who are interested in data center, I think that you'll have to get picture as well.

Speaker 4

Got it. Thank you.

Operator

Yu Wei?

Speaker 6

Hi, good afternoon. Thanks for hosting the call and congrats on the results. Three questions from me, please. The first one on the mobile side, just a bit of color. As you've mentioned, the blended ARPU higher 21% year on year and only 10% due to usage.

Speaker 6

Could you remind us, was this driven by subscribers moving up to higher plans? Or did you reduce promotional items which effectively increased your yield? Second question is on the fixed on the broadband business side. Just looking at Slide 31, you had net growth because of fixed wireless, which offset the net disconnections at fiber. Is this only migration essentially internal migration or is it essentially really fixed wireless is driving growth and there's net disconnections at the fixed broadband side?

Speaker 6

And last question is related to the data center monetization that you've seen in the press. If it does push through, would you look to reinvest all of the funds or do you think you'll allocate some for in a special dividend or the like?

Speaker 3

Louis, I guess a quick answer to the question on mobile ARPUs. So yes, we have seen over 22% growth in ARPU and this attributed to 2 things. We have seen the growth in mobile data revenues. I think it's already been mentioned earlier. And second, I think we have increased the number of daily active customers who are reloading.

Speaker 3

So that comes on the back end of number 1, increased 5 gs devices latched onto the network. We have seen practically a growth of over 60% on latched devices in the last 6 months and we will continue to do that. 2nd, there's a lot of impetus behind network build and resiliency and we are ensuring that we are able to reduce LTE congestion where majority of our customers still reside. So I hope that answers your question.

Speaker 6

Yes, it does. Thanks.

Speaker 1

Can you repeat your second question? Sorry, we didn't get.

Speaker 6

Oh, yes. On the fixed broadband side, on slide 30 one, you're showing net growth in broadband subs, but that's largely because of fixed wireless offsetting fixed wireless growth offsetting the fiber disconnections. Is that internal migration between fixed to fixed wireless or that's really a picture of the real picture?

Speaker 7

Hi, Louis. I'll take that question. Sorry, let me put my camera on. I'll take that question if that's okay. Firstly, fixed wireless actually saw a 4% growth in its base in the Q1.

Speaker 7

So we actually had 14,000 net customers for the fixed wireless business, so that was a growth. Also from a fiber perspective, our operational reports will actually show a growth also from our fiber business to the tune of about 37,000 net adds, excluding a one off cleanup that we actually executed for a cohort of customers that we were actually treating for an extended period of time. So there's actually not a drag from fixed wireless to fiber or any specific sort of migration between the two technologies. We are seeing fixed wireless start to improve. In fact, if you look at quarter 1 year on year, it's down to about $30,000,000 down year on year.

Speaker 7

So we'll start this as fixed wireless continues to grow its base, we'll start to see that actually come through on a positive basis. The drag in the home business is really coming through from our legacy business. So that's the legacy VSL, VVDSL as well as our voice business. Thanks.

Speaker 1

It's very clear. Louis, to your third question. So any proceeds will likely be used to pay off debts. So, I don't think there'll be special dividends for now.

Speaker 5

Okay. Thanks. I think it's fair to say that the proceeds from a sell down of the data center will go towards debt reduction. There have been commentaries by the, ratings agencies, Moody's and S and P about the debt or its position of PLP and of course the free cash flow aspects as well. So remindful fact that the bulk of the proceeds from any sell down for that.

Speaker 5

Now, of course, shareholders like yourselves, I suppose, so we will take a look depending on the quantum of the cash that we get, the principal consideration debt reduction. If it's a fair amount of money that we get cash that we get then we should be

Operator

able to

Speaker 5

Hopefully we could, issue.

Operator

No, it's from There's a question in the Q and A box from Herman Delapas. May I ask for the reason for the huge jump in mobile data traffic in the first quarter?

Speaker 3

Yes, I think we've already answered in part earlier. 2nd, I think just want to emphasize aside from installed devices which have grown in a big way particularly for 5 gs, I think on LTE, we're also seeing a decongestion of LTE use, especially those at the high cap bandwidth utilization. And I think that's a focus for us to move such high demand customers to 5 gs. Very soon, aside from network build, we'd like to in coordination with our vendor partners push for a device upgrade so that we will see a better utilization overall for the network. While we continue to invest in capacity, we also would like to make sure that there's a corresponding utilization to improve payback.

Operator

I think your second question is already answered. What do you see in terms of ARPU for the mobile segment, if you wanted to add to that, please?

Speaker 3

Yes. We have seen a growth of over 21% for both brands of smart prepaid, and we are confident that this will continue to grow in the next 6 months.

Operator

Is that okay? Sorry, that was from Herman. There's a raised hand from Jonte. Jon, you jump

Speaker 8

Hi. Thanks, Melissa. Thank you for the opportunity. Just two quick follow-up questions. First is on broadband.

Speaker 8

I see on Slide 6 that the churn rate for fiber was actually stable. So it would have implied that because net adds were negative, gross ads for fiber weren't as much as it was in the second half of last year. So maybe we could provide some color on why is that the case? I'll stop that first.

Speaker 7

I actually don't have that particular slide in front of me, but we actually did record a positive net adds for fiber. As I mentioned, net of the one time cleanup, we actually had 37,000 net adds for the fiber business. You will see there that churn has actually been stable with that one time cleanup. However, when you look at reversing the one time cleanup and you look at the operational or the organic churn that's actually happening, we have seen an improvement in our churn levels. So we are actually seeing an improvement in our churn levels as customers are actually looking to stay longer.

Speaker 7

This is something we want to continue to build on as we start to ramp up our rollout and also start to ramp up our new customer acquisitions.

Speaker 8

Thanks, Jeremiah. Just a quick follow-up. I'm just trying to make sense of the revenue growth in the Q1. So home broadband was, as you said, flat. So how to which would you ascribe this this trend?

Speaker 7

Sure, John. So the growth the growth is actually okay. Sorry, John, to answer your question, the growth that you're seeing or the growth that we derive from the net adds and the activities are actually being shown in your fiber business. So the fiber business grew at a rate of 7% or MXN900,000,000 year on year. It's really being dragged down at the moment with the decline in our copper business or our legacy businesses that relate primarily to copper as well as voice.

Speaker 7

So if you exclude that out, you actually look at the just the fiber business alone, you'll actually see that is growing at a rate of 7% per year.

Speaker 8

Okay, thanks. And if I understood it correctly, I guess the drag from the copper business was more than in this quarter than in the second half of last year, just to complete the picture.

Speaker 7

Can you hear me?

Speaker 5

Yep.

Speaker 7

Yes. Yes, there is. I think sorry, John, I think you're echoing. Yes, there is the drag. It is reflecting actually more than it has been in the past And we'll be looking to actually address that as we start to ramp up and reaccelerate our deployment of our fiber ports.

Speaker 7

And we look to ramp up our new customer acquisitions. In the past, you'll actually have seen our fiber business growing at very, very high rates like 20%, 30%, even 40%, so much higher than any of the which actually, I guess, offset any of the drag that we would have got from our legacy business. But given we are reaccelerating our fiber deployment, starting this year, We'll look to actually get that. Okay.

Speaker 8

Thank you. That's very clear. Just one very quick follow-up housekeeping question. I see depreciation in the Q1 relatively flat from last year. Is it safe to assume, call it, the sub $12,000,000,000 per quarter depreciation except 4Q?

Speaker 1

It's most likely to to increase. It's it's gonna increase slightly, towards the latter part of the year, mainly due to newly capitalized assets and ROEs. So it's going to be slightly higher than the current level.

Speaker 8

Okay. Thank you very much. And again, congrats on the results.

Operator

Thanks, John. There is a question emailed. What is the rationale for Radius acquisition?

Speaker 9

Thank you very much for that question. So, essentially, it's, very important to leverage the strategic synergies that we can get from both, PLDT, enterprise, PLDT home, and the Rages business. Regis is known to have a very strong enterprise brand. We we we aim to be able to make the journey simpler and secure by design, data connectivity, options. So we can leverage both the LDT's network and Raintiffs network to provide better experiences for our customers.

Speaker 9

And, you know, it also helps with our CapEx that we don't need to build in the same place. From a consumer perspective, it's something that, there are best practices and ranges that we can leverage within the home business. We're seeking better executions from a strategic synergy perspective, both from a rollout perspective platforms. They have a prepaid platform that we're looking to see if we can leverage within the group. And, and just more of these stories will continue as we get deeper into the Radius engagement.

Operator

Sorry, Justice.

Speaker 5

Well, maybe just to add a bit more color to this thing. The radius has been as you know, it relied on the well, it's a sister company of PLTT because it's a wholly owned subsidiary of NARAL. It has been a bit of a pain point when it initiatives that are independent of or contrary even to the interests of PLDT like having some CapEx to build this fiber, marketing to both individuals and to enterprises without coordinating the enterprise. So it's quite best that we get coordinated on the home broadband front. As George indicated, Regis is quite that they have a good fiber network in Bismill, Metro Manila in certain parts of the franchise areas of Meralta.

Speaker 5

And number 2 is very strong enterprise based. So it's best we thought that from our group perspective that they stay coordinate on the they get coordinated on the enterprise front. It has shown losses on the consumer front on the individuals on or itself, not the enterprise side in a hit. What we want to do is to migrate the own customers of Radius to the home broadband of DST because in any way homes sorry, Radius is losing money on the home front. That should happen.

Speaker 5

He completed the investment last week. And I think Joe just responded someone from Enterprise to help manage the Aegis business stakeholder in terms of approaching and attacking the home broadband market, both the individual homes and the employees.

Operator

Another question has been emailed. Any color that you can give on the competitive landscape for the home business?

Speaker 7

So the landscape is, I guess, remains to be quite competitive. I think everybody has been looking at the different moves from competition, whether they're the main ones or also from some of the informal competition from P2P players, right? There's definitely pressure when you look at it from price points coming down, and looking at increased speeds at certain data allowances and also the introduction of prepaid. So it is a highly competitive environment. We're being quite careful in the way that we approach the market.

Speaker 7

We've been able to hold our ARPUs quite high now over the period of high level of commoditization. But we will start to look at how we address the different segments of the market. There's 2 ways to grow. Actually, there's 3 ways to grow. 1 is you expand your base in your network.

Speaker 7

The second one is you switch customers from competitive networks. And the third one is actually attacking different segments within your existing footprint. So we'll be looking to actually have an attack on all three fronts this year. And so we'll be very careful with the way that we do that so that it is value accretive and something that doesn't destroy value and actually cannibalize our base.

Operator

Any updates on the DC sale at the center?

Speaker 5

Well, I think it's fair to state that the discussions with several parties that have expressed interest in investing in our data centers, it responds the whole spectrum, right? The principal point of discussion we've had is with NTT DOCOMO, who was very keen to invest into data centers. But on and they gave us sort of values that we expect to fetch for the data centers, which is north of $1,000,000,000 And the however, the condition that they wanted to have is that they would have a majority, the ability to consolidate data centers and that sort of stopped in our role because we think that it has a good future for PLT to be able to control and a significant portion of executive interest in the data centers is not to our interest. And we told DOCOMO that they are investors in PLDT. So they should be able to accommodate what this is in the best interest of PLT after all the shareholders said.

Speaker 5

Besides, I think if we do away with the consolidation data centers, we could lose approximately MXN 5,000,000,000 or MXN 6,000,000,000 of revenues when we do the best majority interest in data centers. And that's the course more explaining with you guys, right? Why did our revenues drop by $5,000,000,000 or $6,000,000,000 trying to avoid that. So we've talked to other private equity funds who may be willing to take a significant minority interests. The values that we received are less about DOCOMO are prepared to pay.

Speaker 5

So we have to ponder very soberly about whether that's something we would like to have or to take an alternative form alternative approach by adopting to REIT. That's something I think they're quite serious about because that's fairly close enough to the total number of valuation and accommodates the interest of PLDT in terms of being able to continue to consolidate, continue to manage the data centers and expand the way to see it. And we would hope to get a partner that can add value added to the revenue line and to the expansion of the data centers. We're learning about how the REIT operates and that we know that, for the for the value of the rate to grow in the future that we do have to expand the disaster data centers. So that's fine.

Speaker 5

That's fine with us, which means that we are in many ways persuaded to adopt an expansive mode in our data center business, which we like. So we hope that we could tell you towards the end of June which route we will take. So those are the 3 available possibilities or options for us to generate cash from divestment of our interest somewhere in the S and E equity centers.

Operator

There's a question on the tariff. Any updates on the DigiCode? So, Frog, we're pleased with that we have been moving along very well. A lot of our focus has really been around the data portion of the group, of the MBTI book. So we have managed to already look into and we're very pleased with the type of data that we're seeing.

Operator

So we've managed to stand up what we call data sandboxes. These are like mini experience centers for the telco, for Meralco, as well as for the toll base. Next in line now is trying to figure out a way on how we can cross pollinate the data. Right? And the thesis is once we can do this, then it will actually showcase new insights into our customer base.

Operator

These insights now should allow us to service them better, should allow us to come up with new products and the like. Are there any other questions? There's a question from Steven Oliveras. How much of the tower sale deals are we looking at for this year?

Speaker 1

We already received around RMB 84,000,000,000 out of the total RMB98,000,000,000. So we have yet to transfer around 1088 towers. So if we get to sell this or transfer this, then that's around $14,000,000,000 if we get to transfer all this year.

Operator

Any other questions? There are no further questions. I'll now turn the floor over back to Mr. Palijinan for his closing remarks.

Speaker 5

Thank you to begin with. Thank you to all of you for joining us this afternoon, listening to our presentation. Pleasure to answer your questions. We look forward to talking to you again towards the end of August, right, for the first half results of we'll be taking a better fix, full year numbers and special due to this.

Operator

Thank you. And that's, thank you for joining us today. Have a good afternoon.

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