Telcos set for modest full-year gains — analysts

By Ashley Erika O. Jose, Reporter

PHILIPPINE telecommunications companies (telcos) are expected to post modest full-year growth despite softer nine-month results, with seasonal demand and continued mobile data and broadband usage providing support, though performance is expected to vary across players, analysts said.

“Listed Philippine telcos will deliver modest growth by yearend, but the pace and quality will diverge sharply across players,” Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said in a Viber message on Tuesday.

“We expect top-line performance to be mixed, driven by sustained subscriber growth but slightly offset by softer ARPU (average revenue per user) growth given the increasing competitive landscape,” Andrei Jorge G. Soriano, research associate at China Bank Securities Corp., said in an e-mail on Monday.

He added that key risks to monitor include the potential impact of recent regulatory restrictions on online gaming payments through e-wallets, implemented in August, which may affect fourth-quarter results.

COL Financial Group, Inc. Equity Research Analyst Paolo Miguel Manansala said Converge ICT Solutions, Inc., the listed fiber provider, is likely to post year-on-year growth, while Globe Telecom and PLDT are expected to be constrained by declining ARPUs and heightened competition from DITO Telecommunity.

“Globe and PLDT’s mobile segment is expected to be weighed down by their declining ARPUs, signaling lower spending capacity of consumers and heightened competition brought on by DITO,” he said.

Broadband demand is expected to remain stable. “We expect that the holiday season will boost earnings in the fourth quarter until the first quarter of next year. However, these companies also tend to book higher costs at the end of the year as well, which would offset the increase in topline,” Mr. Manansala added.

Mr. Arce noted that incumbent telcos benefit from scale, strong positions in mobile data and broadband, and growing non-voice revenues such as enterprise solutions and data centers.

“But rising competition, especially from DITO, and cost pressures could cap upside. For Globe, I see a somewhat stronger Q4 if seasonal tailwinds play out. Its enterprise solutions segment could pick up, and data traffic could surge during the holiday season. However, Globe’s core net income has already shown weakness: in Q1 2025, normalized profits declined sharply due to elevated financing and depreciation costs,” he said.

Telco players posted slower third-quarter results amid lower revenues. DITO CME Holdings Corp., operator of DITO Telecommunity Corp., recorded an attributable net loss of P6.29 billion in Q3, compared with earnings of P998.05 million a year earlier, as expenses surged. Gross revenue reached P5.26 billion, down 24.35% from P4.23 billion last year, while gross expenses rose to P8.26 billion from P7.53 billion. For the nine months ending September, DITO CME trimmed its attributable net loss to P9.65 billion from P11.05 billion, with gross revenues up 25.28% to P14.92 billion from P11.89 billion.

Globe’s attributable net income declined 12.79% in Q3 to P5.25 billion from P6.02 billion, while revenues fell 1.68% to P44.36 billion from P45.12 billion. For the nine months ending September, net income dropped 14.04% to P17.69 billion from P20.58 billion, while gross revenues fell slightly to P131.59 billion from P134.74 billion. Mobile revenues accounted for 65.48% of total revenues at P86.17 billion.

PLDT Inc. posted a third-quarter attributable net income of P6.93 billion, down 28.26% from P9.66 billion a year ago, as higher expenses offset revenue growth. Revenues rose slightly to P53.71 billion from P53.36 billion, while expenses climbed to P42.36 billion from P39.62 billion. For the nine months ending September, total revenues increased 1.45% to P163.28 billion from P160.94 billion, while expenses rose 3.61% to P123.39 billion from P119.09 billion. Nine-month attributable net income fell 10.69% to P25.07 billion, while telco core income declined 4.97% to P25.26 billion.

Converge ICT Solutions, Inc. posted a 1.03% rise in Q3 attributable net income to P2.95 billion from P2.92 billion a year ago, with gross revenues up 7.39% to P11.19 billion from P10.42 billion. Its January-to-September net income increased 8.4% to P8.90 billion from P8.21 billion, while nine-month revenues reached P32.97 billion, up 10.12% from P29.94 billion. Residential services generated P27.75 billion, and enterprise services contributed P5.22 billion.

For 2025, Converge is maintaining a revised full-year revenue growth target of 10-12%, down from an earlier projection of up to 16% due to delays in rolling out new enterprise solutions and manpower constraints.