PLDT Q2 2024 Earnings Call Transcript

Quartr
Provided by Quartr
August 13, 2024

There are 12 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 first half of twenty twenty four. 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. A podcast of the event will be available on our website after the call.

Operator

The QR code for the presentation is on the screen and in the confirmation notices e mailed to you. For today's presentation, we have with us our Chairman and CEO, Mr. Manny Pangilinan Mr. Danny Yu, our Chief Financial Officer and Chief Risk Management Officer Attorney Marilyn Aquino, our Corporate Secretary and Chief Legal Counsel as well as the business unit heads led by Mr. Jeremiah De La Cruz of Home Mr.

Operator

Giorgio Hendrano of Enterprise Ms. Christine Goh for the individual business and our Head of Network, Mr. Boc Jimenez. At this point, let me turn the floor over to Mr. Danny Yu to start the presentation.

Speaker 1

Good afternoon, everyone. Please allow me to present PLDT's financial and operating highlights for the 1st semester of 2024. Consolidated service revenues for the first half reached another milestone at R96.9 billion dollars or 3% higher than last year. On gross basis, service revenues were higher by 4% compared to the same period last year. Operating expenses marginally grew by 1% to DKK43 1,000,000,000, consolidated EBITDA rose by 3% to RMB53.9 billion, a semester high with EBITDA margin at 52%.

Speaker 1

Telco core income excluding the impact of asset sales in Maya expanded by 3% to RMB18 1,000,000,000. On segment basis, our individual business registered a BRL1.7 billion or 4% growth in revenues to RMB41.9 billion. The Enterprise segment recorded a 4% revenue upswing to RMB24 1,000,000,000. While our home revenues were marginally lower by RMB177 1,000,000 or 1% at RMB30 1,000,000,000, fiber only revenues were higher by 7% or 1,800,000,000 compared to the same period last year. Now on these slides, while it may appear that the headline service revenues rose by 3%, revenues have actually grown by 7% excluding the drag from legacy businesses.

Speaker 1

Thus growing segment now contribute 87% of our total business from last year's 83%. For the individual business, mobile data accounting for 89% of total segment revenues grew 8% year on year. This doubles the segment growth of 4%, which reflected the drag from the legacy SMS and voice. While the overall Home segment showed a marginal decline of 1% year on year, fiber only revenues which now represent 92% of the segment rose 7%. Unlike other telcos, PLDT voice continues to contribute albeit at a declining trend.

Speaker 1

Corporate data and ICT which were 72% of the total enterprise revenues were higher by 7% compared to the overall segment revenue increase of 4%. Now for more details of the respective business segments. Service revenues for the individual business grew by 4% in the 1st semester of the year, mirroring the same improvements in postpaid and prepaid. Mobile data underpinned the growth. Blended ARPU was higher by 14%, mainly due to the 11% rise in average usage and data traffic.

Speaker 1

The 2nd quarter saw a 4% rise in service revenues compared with the same period last year. However, it saw a dip versus the previous quarter due to limited customer mobility from school holidays and the rise in hit index. Notable for this segment is the increase in active mobile data users to 40,500,000 from 39,400,000 at the end of March. Usage per sub grew to 11.6 gigabytes up 11% year on year. Among the initiative to accelerate the mobile growth momentum are best value offers and geo targeted campaigns.

Speaker 1

We are complementing site rollouts and capacity expansions with program to transform our customer care into a tech driven center of excellence to enhance customer service. Next please. 92% of our home revenues are from fiber business, which registered a 7% year on year growth. As we mentioned last quarter, we started to accelerate port rollouts this year. In tandem with this, we focus on improving the pace of our fiber installations.

Speaker 1

There should be this should translate to higher gross adds moving forward. We're happy to report that from May to June, we saw a 20% increase in fiber installs. Home fiber ARPU remained at around 1500 level with lower price plans offered selectively in areas where we have spare capacity. PLDT Home has fiber plans that cater to a wide range of economic segments enabled by its integrated fixed and wireless network. This include gigabit fiber at the higher end, fiber only all banners for the mainstream and prepaid fiber and fixed wireless for the low end.

Speaker 1

Our increased focus on quality of service and quality acquisitions are driving significant improvements in churn. From 1.82% in the 1st quarter, fiber churn declined to 1.52% in the 2nd quarter. PLDT continues to enjoy strong brand equity and superior network quality making it a formidable competitor in the market. Next please. Our enterprise business operated against a backdrop where the overall industry experienced a slowdown as customer were more deliberate with their IT and data transformation decisions as they consider the impact of global trends, the fear of cloud and cyber threats.

Speaker 1

Nonetheless, the Enterprise segment recorded a 4% revenue rise with corporate data and ICT being the underlying growth drivers having grown 7% in the 1st semester. Among the revenue streams that registered improvements were core connectivity and higher ICT revenues from Managed IT Services, Cybersecurity Solutions and Cloud Services. Included in our enterprise offers are differentiated SD WAN, managed networking, IoT platform and a portfolio of services. We also continue to expand our capabilities in AI and cloud. The Santa Rosa data center was energized in July with 20 megawatts of IT load capacity expected to be available by the end of 2024.

Speaker 1

This makes VITRO Santa Rosa well positioned to capture growth from hyperscale and AI datacenter demand ahead of other operators. Despite cost pressures from inflation and high cost to operate, total OpEx was marginally higher by only 1% or 600,000,000 in the 1st semester, reflecting our continuing pursuit of operational efficiencies and cost rationalization. Consolidated EBITDA for the 6 months of 2024 grew 3% to DKK53.9 billion, a semester high driven by higher revenues. EBITDA margin stood at 52%. Telco core income for the first half of twenty twenty four rose by 3% to BRL18 1,000,000,000 reflecting the impact of higher EBITDA, partly offset by higher depreciation and financing costs.

Speaker 1

On reported basis, PLDT income was stable at 18 achieve bottom line breakeven in the last quarter of this year. The Board of Directors approved a payout of an interim dividend of 50 per share, representing 60% of our Telco core income for the first half of twenty twenty four, consistent with our dividend policy. Record date is set for August 27, while payment is scheduled for September 11. PLDT's balance sheet remains healthy with net debt to EBITDA of 2.38x at the end of June. We continue to target taking leverage to the 2.0x level, which we expect to attain with anticipated increase in EBITDA, reductions in CapEx and with the balance of tower sales proceeds.

Speaker 1

We also remain actively engaged in discussions with potential investor for our data center business. Gross debt stood at RMB265.4 billion of which 15% are dollar denominated and 5% unhedged. The average interest cost for the period stood at 4.9% pretax, while the average life of debt is 6.85 years. Total CapEx amounted to DKK35.1 billion consisting of network and IT CapEx of R32.7 billion and business CapEx of R2.4 billion. CapEx intensity or CapEx to service revenue stood at 34% for the 1st semester versus 41% in 2023.

Speaker 1

Of the DKK33 1,000,000 commitment net of advances to major CapEx vendors, the remaining commitment has been reduced to DKK4.4 billion. For 2024, our CapEx guidance is BRL75 1,000,000,000 to BRL78 1,000,000,000 consistent with our aim to continue to reduce CapEx. The increase in the number of unique 5 gs devices and 5 gs data traffic continues into 2024, which we expect to be sustained as the price of 5 gs devices trends lower. 5 gs adoption is one of the emerging growth streams of our individual business. Now moving to Maya, our FinTech investment.

Speaker 1

MayaBank continues to be the country's number 1 digital bank on the back of the company's exceptional growth in deposit, credit and merchant acquiring. At the end of June 24, Mayabank's strong product appeal was reflected in the remarkable growth in customers to $4,000,000 Deposit balances rose to $32,800,000,000 driven by Maya's innovative products and higher interest rates linked to everyday spending. Life to date, Maya Bank disbursed a total of BRL46.8 billion in loans and had 1,200,000 borrowers, a 133% growth year on year. Maya has scaled its lending business with Maya Banks turning cash flow positive in the Q2 of the year. Maya offers the widest range of loan products among the digital banks catering to both consumers and MSMEs.

Speaker 1

Year on year, consumer loans grew 2.7 times, while MSME loans rose by 6.7 times. Complementing these are lending solutions to key partners such as device financing for PLDT and Smart. Maya Bank expects to further expand its loan book through strategic initiatives such as loan channeling with Thala. Finally, Maya continues to enter into partnerships that supports its financial inclusion objectives. Now for the guidance, our outlook for 2024 continues to be one of optimism.

Speaker 1

We affirm our previously announced guidance that includes mid single digit top line growth under been by robust increases in data and broadband revenues. With our continuing pursuit of operating efficiencies and cost rationalization, our EBITDA is anticipated to grow by mid single digit as we aim to expand EBITDA margin beyond the current level. Telco core for 2024 is expected to land north of R35 1,000,000,000. Consistent with our commitment to lower CapEx headline number, our CapEx guidance for 2024 remains at €75,000,000,000 to €78,000,000,000 including fresh CapEx for the year and the deliveries of prior year's commitments. We remain committed to a 60% dividend payout to working to bring leverage back to our target of 2.0x net debt to EBITDA level and achieving positive free cash flow after dividends.

Speaker 1

Thank you.

Operator

We're now ready to take your questions. For those online, you may type your questions in the Q and A box in the upper right side of the screen. You may also send your questions via e mail to pldtir centerpldt.com.ph. Please indicate your name and company name so we can get back to you for any additional information you may need. Allow me now to take questions from the floor for those who are here with us at the venue.

Operator

It's a question from Arthur Pineda. Arthur?

Speaker 2

Hi. Can you hear me?

Operator

Just a sec, Arthur. We'll work on the deck on the volume. Could you try that again?

Speaker 2

Hi. Can you hear me now? Hello?

Operator

Arthur, let's try it again.

Speaker 2

Can you hear me?

Operator

If you can speak a little louder, we can hear you a little faint, but yes, we can.

Speaker 2

Okay. Is this better?

Operator

Better. Thank you.

Speaker 2

Okay. Thank you. Yes, several questions, please. Firstly, on Maya, can you please clarify the comment on Maya Bank turning cash flow positive? Do you mean that Maya Bank itself has turned profitable in 2Q?

Speaker 2

I'm not familiar with the concept of bank turning cash flow positive. So I'm just needing to clarify that. Second question I had is with regard to the data center. Previously, there were talks of monetization plans for that asset. Is that still a route that the company is pursuing?

Speaker 2

And third question I had is with regard to mobile revenues. When we look at this, it seems to have slowed down versus 1Q's momentum. What's dragging down the momentum on ARPUs?

Operator

On the cash flow for Maya, is he 1

Speaker 3

here? Mayabank.

Speaker 1

Yes, that's correct. MayaBank is now cash flow positive, but not Maya as a whole. We're talking only of Maya or Maya Bank.

Operator

[SPEAKER RAMON ALVAREZ

Speaker 2

PEDROSA:] Sorry, because the concept of the bank on cash flow is a bit different when we think of banks because it is in the business of cash. So when we think of that, are you referring to Maya being Maya Bank being profitable? Is that how we should interpret this?

Speaker 3

[SPEAKER BIJAN MOSSAVAR RAHMANI:] Well, let me banks always have cash, right? If you don't have cash, then you're in trouble. So from a cash standpoint, I think the loan to deposit ratio of MayaBank is about anywhere between 20% to 22%. As of last count, deposits are about 32,800,000,000. Loans on books are anywhere between 6,000,000,000 to 7,000,000,000 only.

Speaker 3

So they have cash. Now from a profit standpoint, I believe they are profitable on their own because what my holdings or whatever the parent company is have allocated certain of their overhead expenses down to the bank. So it's not clear to us to be honest whether to what extent they're profitable on their own without allocation of head office overhead. Arguably, some of those expenses like IT, which they understand service part of the IT requirements of the bank are operated out of head office. So the market basis for adjusting expenses down to the bank.

Speaker 3

But I think from a contribution to head office expenses, it is already positive on an accounting basis, right? And yes, I think that's the short answer.

Operator

And then on the data center question, sir?

Speaker 3

But as Danny said, taken in the round, it is cash flow negative because principally the digital wallet is still negative from a cash flow standpoint and accounting standpoint in terms of P and L, right? So but their losses, minus losses consolidated was down to RMB1.9 billion for the first half from BRL6 billion last year. So that's a significant improvement and two things, one is Maya expects to breakeven on an accounting basis and cash flow positive in the month of December this year. And the losses will drop from the first half of BRL1.9 billion down to about BRL500 1,000,000 for the second half of this year. So the total losses will be about BRL2.4 billion accounting wise and still cash flow negative taken for the whole year, but at least EBITDA well, they will be EBITDA positive by December and accounting equilibrium by December, right?

Operator

2nd question, sir, was on the data center monetization, whether that is still on?

Speaker 3

Well, there are ongoing discussions. And I think we're down to the short strokes. We're down to 2. The valuation has been agreed. And it's a combination of old shares or existing shares and new shares.

Speaker 3

So PLDT will sell a portion of our outstanding shares in vitro, which is the parent of the data centers to this particular foreign investor. And there will be new shares issued to bring new money into vitro for two things. The new investor wants debts to be reduced somewhat. And the other bit is that the substantial portion of the new funds injected in vitro will fund the expansion of vitro in respect of Phase 2 of the Santa Rosa hyperscaler data center and future data center. So in the medium term, VITRO does not need to borrow because there's quite a substantial injection of funds into VITROW to fund the expansion plans of VITROW.

Operator

The last question had to do with what seems to be a slowdown in mobile. Christine?

Speaker 4

So it's true. There is actually a slowdown in the mobile revenues in quarter 2, but a lot of that has to do with the industry as well. So if you recall, in quarter 1, we actually had a growth an industry growth of somewhere in the 6% to 7%. But in quarter 2, growth was just at 3% to 4%. It's linked to the early closure of classes as well because there was a change in the school calendar.

Speaker 4

So with classes being cut short much earlier, there is actually limited mobility, plus of course the heat and the temperature was actually not to our favor. But we are seeing a lot of momentum coming 3rd quarter. So we expect actually the growth to bounce back.

Operator

Next set of questions from Jonathan.

Speaker 5

Hi Melissa, can you hear me?

Operator

Yes, we can. Thanks, Jan.

Speaker 5

Thank you. Three questions for me. Maybe best if I go over them 1 by 1. First is on home broadband. It's 1% growth, but I understand you published record net adds and stable fiber ARPU.

Speaker 5

So I suspect the gap would mostly come from the legacy business is my understanding correct as in a decline in the legacy business.

Speaker 6

Hi, John. Thanks for the question. You are correct actually. If you look at our fiber business, our fiber business actually had 39,000 net adds as well as 7% year on year growth. So we actually saw a total of about ARS 911,000,000 in the 2nd quarter alone for our fiber business.

Speaker 6

The gap that you're seeing is actually the decline in our legacy business. So a lot of that is in our copper, our VVDSL as well as our old copper lines and some voice calling. So it's all of those legacy businesses that are actually dragging down the overall performance for home. But barring all of those legacy revenues, if you look at really only the future revenues, in particular fiber, which is the area most contested in the market, we are seeing a 7% year on year growth.

Speaker 5

Thank you. And a quick and follow-up to that.

Speaker 3

[SPEAKER PIERRE YVES LESAICHERRE:] Yes. Yes, there

Speaker 6

was a 1,900,000,000 total drop in our legacy revenues.

Speaker 3

DSO exports. Yes. So we're down to 1,600,000,000. Pesos in revenue terms for the legacy. And we think that the rate of the time in any would be modest discount

Speaker 7

hit the bottom of the curve.

Speaker 3

So the growth in home broadband should be more transparent to you. Yes. So, with the consequences of our legacy assets.

Speaker 6

Did that answer your question, John?

Speaker 5

Yes, very much. Thank you. A quick follow-up is Your

Speaker 3

close to net installs are better for the months of July and so far in August. I think the close installs are higher in the first one and a half months, second half compared to the average of the 1st 6 months?

Speaker 6

Yes, that's correct, Venuti. We are actually seeing an increase, a significant increase on a month to month basis. We saw that increase coming through from June, as well as continuing to go through in July, as well as August. That coupled with an improvement with our overall churn performance, as Danny had mentioned, churn in the Q1 was 1.8%. Churn in the Q2 has actually gone down 1.5%.

Speaker 6

So those two things actually coming together, we'll actually see momentum in the home business actually picking up and we'll see a much, much stronger second half of this year. [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] And on the network side,

Speaker 3

we have to add ports. [SPEAKER UNIDENTIFIED COMPANY

Speaker 8

REPRESENTATIVE:] Yes. To complement the growth in the second half of Home, we're seeing an acceleration of ports rollout as well. So if you combine their strength in installs and the lower churn and now more ports for the second half, you will see the acceleration of the performance of Home for the second half of the year.

Speaker 3

So consequences on the expansion of our transport network as well with an expansion because the anticipated growth in traffic from better installs in this area.

Speaker 8

And I think one of the things that should be underscored is that the performance in 2024, if we end strong, is going to give us an even stronger performance in 2025. One of the reasons why 2024 was a little bit subdued in the first half was because 2023, we pretty much slowed down both the installs and the rollouts and that affected our first half revenue. But if you see the acceleration in the second half, the impact of that in 2025 is actually going to be quite big. So we're preparing for a stronger 2025 and we want to make sure that we do not lose the momentum of what we have in the second half of the year. So that 25% should be a stronger performance for home.

Speaker 5

Thank you for the very comprehensive responses. 2nd is maybe on prepaid fiber unit economics because I understand in the past you mentioned that this did not make sense to roll out or build. So maybe an update whether there was update about the change in strategy and whether this business can be a potential profit driver for PLPT moving forward?

Speaker 6

Sure. Look, the prepaid fiber economics are definitely challenging, right? I mean, one of the big things that is different about the fiber business as well as our mobile business is the amount of CapEx required to actually connect the customer in the first instance. So that's clearly a big difference between fiber economics as well as mobile. Where we started with prepaid fiber was actually within the existing base.

Speaker 6

So customers that were either having difficulties with regards to their financial situation, they wanted an alternative from payment methods. We actually went after those customers first and we gave them the option to go through prepaid, right? So we've actually that's where a lot of the economics actually are in your favor because if you think of the setup costs and the setup fees, they're largely sunk costs. You've actually already done the role. You've already done the truck roll.

Speaker 6

You've already got the CPE out there. So being able to extract more value out of that customer is only going to be accretive to you in from a top end as well as a bottom line perspective. From a new acquisition point of view, we have opened up prepaid fiber in select areas. So in areas where we have ample capacity in our fiber network, we are making prepaid fiber available. It does, however, come with slightly different economics or slightly different commercial agreement.

Speaker 6

We are asking for an upfront payment fee from the customer to be able to show commitment that they actually do want to make sure that they it's not just something that they want to do once and once only. And we're also making sure that it is in areas where we have capacity. Unlike our competitors, PLDT actually has a utilization rate of our ports that are actually extremely high. So we're sitting at about 60%. So more often than not, because that 60% ports and the 40% leftover are actually scattered throughout the Philippines, right?

Speaker 6

So it's not just all evenly done. So in areas where we do have capacity, we will make it available and we'll actually push it down into different segments of the market and we'll open that up and we'll open it up making sure fiber is more available to more people. But we are being very, very selective with it as well to make sure that it is value accretive to us. I will add that we in May of this year or actually it was June this year, we did launch our 899, right, the most aggressive postpaid and the cheapest postpaid plan that we have available in the market for fiber. And so we have seen an uptake on the 899.

Speaker 6

Now that obviously still has very similar because it is still a postpaid plan that does have a little bit more predictable economics than say, for example, a prepaid service, right? What we are seeing is customers are availing of the $899 rather than actually going to the prepaid option. When we're provided adoption for both, we're actually seeing them self select on the 899 and they're actually preferring to take that service moving forward. So I guess I couldn't give you full details as to how the economics are going to pan out because I think the fullness of time is really what's going to reveal how often someone is going to recharge. However, we are very much committed to making sure that we extract the maximum value from our CapEx that we've got.

Speaker 6

So we will make it available and we'll actually push to open up our fiber to as many customers as we possibly can.

Speaker 5

Thank you very much. Final question for Danny, Maintenance question on costs, personnel expenses in 2Q alone, I think there was a big jump versus 2Q last year. But I understand that the first half versus first half number is kind of normalized. So is it just correct to understand this is a difference in timing in terms of booking some of your personal expenses?

Speaker 1

The increase in repairs and maintenance was actually due to the increase in technical service fees to different suppliers like Cisco, Huawei, principally from the site expansion program.

Speaker 5

Yes. Just to clarify, I think there was also a spike in personnel as in manpower expenses, wages. Could you comment on that?

Speaker 1

You mean the compensation, which increased by 1%? Correct. It just increased by 1%.

Speaker 5

Yes. So the Q2 versus Q2 number, I think, was high single digit. But the first half, you're correct that it was muted. So is it just is my understanding correct that this could be a timing?

Speaker 1

Well, it does include merit increases for this year.

Speaker 5

I see. Thank you very much. That would be all for me.

Operator

Thanks, John. There's a question in the Q and A box from G. A. Of Macquarie. Your first half EBITDA margin came in at 52%.

Operator

Can you articulate your plan to push above 52% in the second half of twenty twenty four to meet your target?

Speaker 1

That again, sorry.

Operator

Our EBITDA margin came in at 52%. Can we articulate our plans to push that margin above 52% in the second half?

Speaker 1

Well, we will try by reducing the operating expenses, But most likely it would land between $52,000,000 $53,000,000

Operator

And then there's a follow-up question. Can you discuss how much incremental earnings from Santa Rosa's initial 20 megawatt capacity can be expected?

Speaker 9

So with the data center business, it usually takes some time before the revenue ramps up, but we are expecting within the next 18 months come the opening of Santa Rosa in October that we should be able to extract anywhere between RMB600 1,000,000 to RMB1.5 billion in additional revenues for our DC business.

Speaker 1

Well, that's what they committed that they're going to break even by December. When I say they, I mean Maya committed that.

Operator

Next set of questions from Claire Alvarez of Guild Securities.

Speaker 6

Sorry, the question was why is voice revenue big and is it combined with so when we refer to I think the question is referring to legacy, right? So legacy revenue actually has a few things inside there. Voice is one of them, right? So an example of legacy revenue would be, say, for example, our copper, right, telephony only, some of the voice international calling that we may have. It also includes things like calling cards.

Speaker 6

I know it might sound a little bit silly, but actually we have had long for some products that have been out there for quite some time that some of our customers still avail off, right? So some of the calling cards that they may actually get prepaid calling cards in some of the malls, etcetera. So our legacy revenue actually has a lot of these older things that we've accumulated over many, many, many years that may not be actively marketed today. However, customer, we still do have customers that are purchasing them and continue to avail. Now, as voice over IP, data and broadband become more and more prevalent, you're seeing that decline come through, right?

Speaker 6

So it is declining. It's just that there are still some of those customers that do continue to use those services. And obviously, whilst especially since a lot of these are actually sunk costs from a network point of view, we extract the value as long as we possibly can. However, we have seen that decline, but we should see that decline actually start to dissipate as it starts to become now the long tail.

Speaker 8

Yes, absolutely. For the wireless, not only are we going to expand our 4 gs coverage as well as our 4 gs capacity. We have to move into the 5 gs space. So we are entering to roll out aggressively on 5 gs as well. On wireline, we are also going to be rolling out as well.

Speaker 8

The market for wireline, especially as you bring down the price point actually expands. And so we have to keep on rolling out the ports to meet those demands.

Speaker 10

Yes, certainly we are actually looking into digitalizing our retailers. We've invested in infrastructure that will accommodate the same as we work with our FinTech partners. Our expansion in the channels extends beyond the stores, not just the company owned stores and our partners, but also the online e commerce and digital stores. Thank you.

Operator

We have a follow-up question. Arthur?

Speaker 2

Sorry, no question on my side. Thank you.

Operator

Maybe I'll just check within with the people who are here. Any questions?

Speaker 7

Good afternoon. Jared from AB Capital. Just have a quick follow-up question on broadband as well. Two questions for me. The first, what percentage of net adds going forward do you see from your cheaper 899 postpaid plan as well as your prepaid fiber plans?

Speaker 7

And the second question is, can you talk a bit about the decision to enter the prepaid market at a slightly higher price point than your competitors at $9.99 per month compared to

Speaker 2

the usual $700 Thank you. [SPEAKER PIERRE YVES LESAICHERRE:]

Speaker 6

Okay, thanks. I'll start with your first question, I think, which was what percentage of our plans moving forward are going to be 8.99 versus prepaid? At this point in time, I can share with you what we're experiencing. We've actually launched both 899 as well as prepaid. And what we've seen is more of our customers are actually gravitating towards the 899 plan versus the prepaid at this point in time.

Speaker 6

We have seen 899 actually hit high when it was first introduced of about 20% of our total NewConnect mix. But we've actually seen that number dissipate now, right? It's actually changed. And we're seeing actually more and more of our only oil plans being sold Unley All, I'm sure you're aware it's unlimited calling from your landline, unlimited broadband at higher speeds with signal as well as now mobile, the value actually included in those plans are really starting to cut through. And we're seeing customers avail of those plans and seeing it as a total household spend rather than just only on the say, for example, on the broadband side of things.

Speaker 6

So we've seen it as high as 20%. That's actually come down now. And we're seeing that sort of hover between the 5% 10%. Now in terms of prepaid, to be honest with you, we're still actually ramping up our installed capacity. As our Chairman actually mentioned, we have seen a huge increase in terms of demand over the June, July, August period.

Speaker 6

And so what we'll need to do is actually bring in additional installed capacity as well as additional sales capacity to be able to look at the prepaid side of things because I think the market demand that we're seeing right now is really not representative of what the market really wants. I think it's really coming down to leveraging the existing channels that we do have and where they're most comfortable in and where they've been attacking has really been in the 8, 99 and up space. We think that there is still a bigger market opportunity there for the prepaid. So as we build our installation capacity to serve them, we'll also be building out specific sales channels to target the prepaid market.

Speaker 11

Eric from CLSA. So several questions. First on the data center side. On Santa Rosa, I recall it, it was first introduced at 100 megawatts. Can you remind us what changed from 100 megawatts to 50 megawatts?

Speaker 11

And if you're able to share also the EBITDA margins for existing data centers, if that's okay?

Speaker 9

So, we had originally planned Santa Rosa. The facility can, by design, accommodate up to 100 megawatts of total. But we based on prevailing, what we see as near term demand plus a diversification on the locations that we'd like to build because we're not stopping with the 11th data center. We found it prudent to stay at 50 megawatts total or translated to roughly 36 megawatts IT load. From an EBITDA perspective, our data center business is very healthy and very comparable to other large progressive DC players from an EBITDA perspective.

Speaker 11

Okay, understood. So on the margin side, would you say it's near to the whole consolidated margins of VLDT?

Speaker 9

Slightly less than the 52, but there are certain deals that are above that. But as an average, it's slightly less than the telco EBITDA levels.

Speaker 11

Okay. Thank you. Another question on Maya. So life to date loans, are all those on balance sheet loans? And would you able to remind us to about the dynamic with Thala?

Speaker 3

Loans is about 7,000,000,000 is their latest loan balance on books. The amount of loans disbursed substantially renewed existing loans are a factor of about 2, 3 times. So my understanding is that they charge enough from fee, something on average about 6%. An upfront payment, but with the rest of the period in the loan is really very short term. Look at the velocity versus burst, but also the KA income, amount of KA income is really substantial for the but they have to put more loans.

Speaker 3

The velocity of loans is burst, getting more loans. The carrying rate is really what

Speaker 11

Okay. Sorry, more on that point on the loan side. There are no BSP securities or government securities in this mix or still there, Any government securities there?

Speaker 3

They do it. So the level of deposits is about so ugly to the nature of the financial bank that they're reading over really push it to the beginning over the losses of the time.

Speaker 11

Thank you.

Operator

There's a question from the floor before I go back to the question from Alicia Capital from On fiber broadband, can you please share the market share trend compared to the previous quarter?

Speaker 6

Well, I'm just trying to think. From a revenue share point of view, I guess it's very difficult to be able to share it for the first half because we've only seen Globe results come out as of today, right? So I think Converge will be releasing theirs in I think it's tomorrow, actually. So I won't be able to comment on the latest figures. But I can say that when we looked at market shares on a three way basis, right, on a three way basis, so Globe and Converge side by side at the end of quarter 1, We saw a slight increase in terms of revenue share for PLDT.

Speaker 6

And there was also a slight increase as well of subscriber share, right? So subscriber share was just a small, but actually the one that we measure and we monitor the most is going to be on the revenue share side of things. So we saw a slight revenue share gain in the Q1 of 2024.

Speaker 8

Well, we're for 2025, I think we're still in the budget process. So the home team is still trying to figure out exactly how many fiber ports we want to roll out for next year. But I would think or I would dimension that it would be more than what we did this year because of the accelerated demand that we saw due to the price reduction. Secondly, the concentration of the rollout for this year was in greenfield areas. Now there is a combination of rolling out in both greenfield and brownfield areas simply because the market for 888 has just expanded in the brownfield area.

Speaker 8

So I would think they would dimension a much bigger rollout in 2025 than in 2024.

Operator

There are no further questions. We'll now turn the floor back to Mr. Pangilinan for his

Speaker 3

number. Thank you for your attendance today. We look forward to seeing you again Respect November 12, you see, Q3 results. Thank you.

Operator

Thank you. Join us for some refreshment.

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Earnings Conference Call
PLDT Q2 2024
00:00 / 00:00
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