CONSOLIDATED SERVICE REVENUES RISE BY P13.8B or 9%
TO P171.5B
HIGHEST FULL-YEAR REVENUE IN HISTORY
DATA/BROADBAND PROPEL GROWTH, ACCOUNTING FOR 73% OF TOTAL REVENUES
MOBILE INTERNET REVENUES UP BY 29% VS 2019
HOME BROADBAND REVENUES ROSE 16%
CONSOLIDATED EBITDA AT ALL-TIME HIGH, GROWING 7% YEAR-ON-YEAR
ON HIGHER SERVICE REVENUES,
MARGIN AT 51%
INDIVIDUAL, ENTERPRISE AND HOME REVENUES AT ALL-TIME HIGHS, GAINING REVENUE MARKET SHARE
TELCO CORE INCOME UP BY 4% OR P1B TO P28.1B
CAPEX AT P71.9B in 2020, TO INCREASE TO P88-92B in 2021
OOKLA RECOGNIZES PLDT, SMART AS FASTEST FIXED AND MOBILE NETWORKS IN THE PHILIPPINES IN 2020
FINAL CASH DIVIDEND OF P40 PER SHARE, TOTAL OF P78 FOR 2020
MANILA, Philippines 4th March 2021 – Overcoming challenges posed by COVID-19 with its relentless network build out to deliver superior customer experience, the Philippines’ largest integrated telecommunications company PLDT Inc. (PSE: TEL) (NYSE: PHI) (PLDT) reported record Service Revenues in 2020. Matching increased demand for connectivity to support work-from-home and on-line learning arrangements, PLDT and its wireless arm, Smart Communications, Inc. (Smart), continue to deploy record capex spending on strengthening its network infrastructure and doubling down on installations and repairs, improving customer experience.
Consolidated Service Revenues (net of interconnection costs) rose 9% to ₱171.5 billion, the highest full year revenue ever attained, surpassing 2019’s ₱157.7 billion, led by data/broadband demand which grew by 18% to P124.5 billion.
Consolidated EBITDA hit an all-time high, growing 7% year-on-year to ₱88.8 billion, excluding MRP (Manpower Reduction Program) expenses of ₱2.6 billion, driven by higher service revenues. The EBITDA margin was at 51% in 2020, from 45% in 2018 and 52% in 2019.
Telco Core Income (which excludes the impact of asset sales and Voyager Innovations) climbed 4% to ₱28.1 billion, while Reported Net Income (which includes exceptional costs) jumped 8% to ₱24.3 billion.
“Our key learnings from the pandemic can be summed up in two words: Transform and Perform. We have endeavored to keep PLDT at the forefront of digital changes, and we are enabling other companies to similarly adopt the digital mode of doing business. Part of PLDT's success during the pandemic lies in the perseverance of our people in keeping the business going despite the lockdown. Once restrictions were eased, the network buildout recommenced with an accelerated pace. The repairs and installs of our Home business also continued apace in the second half of this year. We are indebted to our sales frontliners who ensured that we were able to keep our services available to our subscribers and their communities, and are similarly grateful to our partner retailers. Meanwhile, we have also enabled the shift towards online payments and other forms of cashless payment systems that could be deployed to lessen the contact between our people, our staff and the customers,” said Manuel V. Pangilinan, Chairman, President & Chief Executive Officer of PLDT.
Consolidated Net Debt as of end December 2020 amounted to US$3,783 million whilst net-debt-to-EBITDA stood at 2.05x. Gross Debt was at US$4,665 million, with maturities well spread out. Only 19% of Gross Debt was denominated in US dollars and 6% unhedged, taking into account hedges and available US dollar cash allocated for debt. PLDT maintained its credit ratings from Moody’s and S&P Global (previously Standard & Poor’s) at investment grade.
PLDT’s US$600 million dollar bond issued in June 2020 was recognized by IFR (International Financing Review) as the Philippines’ Capital Deal of the Year. The issue consisted of US$300 million long 10-year bond priced at 2.5% and US$300 million 30-year bond at 3.45%. The issue, PLDT's return to the offshore bond market after an 18-year absence, was 17x oversubscribed.
In line with PLDT’s dividend policy of paying out 60% of telco core earnings, a final cash dividend of ₱40 per share will be paid out on April 6, 2021 to shareholders on record as of March 18, 2021. An interim dividend of ₱38 per share was paid in September 2020, bringing total dividends paid for 2020 to ₱78 per share.
Sustained demand for data, lifting service revenues to all-time high
Sustained demand for data and broadband led total Service Revenues across its three major revenue streams, Consumer Wireless, Enterprise and Home broadband, to an all-time high. Despite mobility challenges posed by the COVID-19 lockdown, PLDT and Smart put to work capital expenditures to strengthen network infrastructure and sustain superior customer experience. Network upgrades made up the bulk of the P71.9 billion spent for 2020. This brings total capex spent over the last 10 years to a record P460.7 billion. For 2021, PLDT has committed to invest in demand-driven capex of between P88 billion and P92 billion to underpin revenue growth.
As a result of these investments, PLDT's fiber infrastructure, the most extensive in the country, stood at more than 429,000 kilometers at the end of 2020. PLDT had extended the reach of its fixed broadband service to cover some 9 million homes passed, whereas the total number of available fiber-powered ports increased to 4 million. In 2021, PLDT aims to further expand its fiber network by 125,000 kms and add 1.7 million ports.
This fiber infrastructure also supports Smart's wireless networks, which cover 96% of the population. As of end-December 2020, Smart had increased the number of its base stations to over 59,000, an increase of 20% compared to end-2019. As it accelerates its 5G commercial services nationwide this year, Smart plans to grow its 5G base stations by over 3,800, while expanding its LTE network by adding about 4,000 more base stations.
International user-based studies reinforce sustained superior customer experience. According to Ookla®, citing improved Speed Score™, PLDT and Smart have been recognized as the fastest fixed and mobile networks in the Philippines for 2020. In addition to maintaining its advantage over competition, PLDT and Smart are also doing better than the Philippine average fixed and mobile speeds.
Separately, the latest country report by Opensignal reveals that Smart has once again surpassed competition in terms of 4G Availability, Video Experience and Download and Upload Speeds.
“This is testament to our commitment in providing a superior data network, the most relevant content, and the appropriate solutions and services to our customers, thus making the experience better than anyone else can offer,” says Alfredo S. Panlilio, Smart President/CEO and PLDT Chief Revenue Officer, “especially now that our commercial 5G rollout has opened the door to an even higher level of customer experience with its super-fast data service. Providing the best network is the most critical form of support we can offer to enable our customers’ own digital transformation. On top of keeping everyone connected, we have also empowered our customers to discover their purpose and pursue their passions,” Panlilio added.
Consumer Wireless: sustained double-digit year-on-year growth
Record investment into the network enabled the company to deliver services that satisfy the robust demand for mobile data, which accounted for 75% of Consumer Wireless revenues for 2020. Rising by 15% or P10.6 billion to P82.7 billion, Consumer Wireless has sustained double-digit year-on-year growth since 2018. Average daily top-ups for 2020 were at an all-time high, rising 18% year-on-year. Smartphones now make up 78% of devices on the network, with 71% of devices overall being 4G/LTE.
To highlight Smart’s fastest data network, the Consumer Wireless group launched multiple campaigns using international endorsers to better represent that content consumption of Filipinos is now global. These campaigns introduced the refreshed Smart tagline, Simple Smart Ako, which talks about making innovations simple yet amazing for subscribers. This strategy was able to weave Smart into the pop culture psyche of Filipinos, as proven by exceptional brand/advertising diagnostic measures.
Smart also expanded its Giga product to include 3 new variants: GigaWork, GigaStudy, and Giga K-Video in response to the needs brought about by the pandemic. Partnerships were expanded with global content providers like TikTok, Viu, Mnet, Moonton for Mobile Legends, Activision for Call of Duty, NBA, and Netflix. These have helped sustain the growth in mobile data consumption and revenues.
In addition to introducing innovations and programs like the GigaPoints Rewards Program and GigaMania, which are both enabled by the GigaLife App, Smart has also maximized its LTE network to deliver a variety of world-class entertainment, e-sports tournaments, and other online events to its subscribers across the country through the GigaFest platform.
In December 2020, Smart unveiled its Signature 5G plans, which are specially provisioned with generous data allocations to unlock the capabilities of Smart 5G’s superfast speeds and lower latency. It also rolled out Unli Any-Net calls and Unli All-Net texts to all Smart Signature Postpaid Plan holders.
These customer-centric initiatives have enabled stronger data adoption and use. Mobile data traffic was at 2,881 petabytes for 2020, an increase of 79% from the previous year. On average, active mobile internet users used 8.26 GB per month, up from 6.3 GB in 2019.
Enterprise: revenues rise in pandemic-induced recession
Despite the challenges posed by COVID-19 to businesses, the pickup in the acceleration in digital transformation of corporates and MSMEs kept Enterprise revenues steady with a 5% year-on-year increase in 2020 to P41.2 billion. Data/broadband revenues accounted for 70% of total Enterprise service revenues.
PLDT Enterprise aims to accelerate growth in 2021 as the group foresees large strategic engagements lifting revenues this year. These are in the areas of Smart Cities, IT Systems Transformation and eLearning as the pandemic has increased the demand for data and content.
In response to COVID-19 challenges, PLDT Enterprise led the transformation of the future of work through the introduction of new innovative solutions and services, and through organizing several virtual events to support and equip businesses as they embrace the shift to digital. PLDT Enterprise has also emerged as the clear leader in the data center business space, which is set to grow as enterprises look to improve business resiliency. Increased interest in data centers from hyperscalers is expected to boost demand for the group’s ten (10) data centers which, combined, have the largest rack capacity in the Philippines and a full capacity of over 70MVA.
Among the group’s key initiatives was the deployment of telecommute services and collaboration and productivity tools that will support the shift to remote work given the lockdown and quarantine measures imposed. Amid the global crisis, the group was able to introduce new products from its fixed, wireless, and ICT pillars which included BEYOND FIBER, Giga Study, simply ERP, among others.
In line with its strengthened mission which is to make a positive impact on every single business, PLDT Enterprise, alongside PLDT and Smart, led several corporate social responsibility initiatives for both the public and private sectors by deploying free services and solutions to help healthcare frontliners and entrepreneurs during the crisis.
With the need to enable businesses and technology becoming even more urgent, PLDT Enterprise spearheaded several virtual events that served as a platform for discussion among key leaders across different industries. These virtual events included webinars and a virtual convention for the group’s customers such as Keep Moving Forward, Tech Talk On-Air, and Philippine Digital Convention (PH Digicon) 2020.
Home: revenues break-out in 2020, on track for 100k/month installs
Increased demand for connectivity for work-from-home, online learning and streaming propelled Home to post a record 11% or P4.3 billion increase in revenues year-on-year to P41.4 billion. Data/broadband revenues now account for 80% of Home revenues. The extensive nationwide fiber rollout, along with increased installations, helped serve increasing demand.
Despite the initial restrictions in movement, PLDT Home set out to connect as many Filipino families as possible in 2020. In the first quarter, monthly installations averaged around 42,000 before ECQ was imposed, improving to an average of 75,500 for September - December. In 2021, the PLDT Home Team is aiming to hit over 100,000 monthly average installations.
2020 was a crucial year for the PLDT Home business. The lockdowns brought about by the COVID-19 pandemic led to unprecedented demand for home broadband services. To respond to this crisis, PLDT rolled out three major programs to help Filipinos rediscover what home meant in the new normal.
As soon as the lockdowns were announced, PLDT Home suspended collections and offered instalment plans to all customers. To further empower Filipinos to work and learn from home, targeted free Speed Boosts were rolled out across the country throughout the year.
The PLDT Home Prepaid WiFi product was also launched to serve customers who were not yet reached by the aggressive fiber network rollout. To help ease the tight finances of Filipino families, the PLDT Home Prepaid WiFi also came with a Double Data allocation offer.
As the connectivity requirements of Filipino families became more complex, PLDT Home introduced new technologies to ensure the ultimate Home Internet Experience. A range of WiFi 6 routers and Mesh WiFi devices were bundled with Fiber plans to improve latency, coverage, and speed for customers. This sets the foundation for more Smart Home devices in 2021.
More Filipinos turned to online businesses in 2020 and to support them, PLDT Home launched PLDT Home Biz, a program specifically for micro entrepreneurs operating at home. The bundle included connectivity and a suite of e-commerce tools to ensure that they have everything they need so their businesses could thrive in the new normal.
PLDT’s continuing rollout of its fiber-to-the-home (FTTH) facilities has made its broadband services available to more customers. Currently, PLDT's FTTH reaches 48% of the total 1,634 cities and municipalities nationwide.
Leading the Way Towards a Cashless Philippines
Completing PLDT's digital thrust, PayMaya's unrivaled end-to-end digital payments ecosystem is leading the way towards building a Cashless Philippines. As of end-2020, over 28 million registered customers and more than 116,000 merchant partners nationwide are enjoying safer and more convenient payments, both on-ground and online, through PayMaya’s various innovations.
Its PayMaya mobile app, currently the top-rated e-Wallet finance app in Google Play Store and Apple App Store in the Philippines today, has provided the fastest and most rewarding way to owning a financial account. Consumers can conveniently send money, receive financial aid, buy load, pay bills, shop online, and pay in over 200,000 merchant and partner touchpoints nationwide.
PayMaya Enterprise, the country's no. 1 payments processor for "everyday" merchants, has led the charge in equipping businesses of all shapes and sizes--from online sellers and MSMEs to large brands and corporations--to accept all types of digital payments including Bancnet, Visa, Mastercard, and JCB cards, as well as e-Wallets including PayMaya and WeChat, among others.
To help bridge the unbanked and unconnected to digital, PayMaya's Smart Padala agent network has expanded its footprint to over 37,000 agents nationwide, servicing customers in over 92% of the country's cities and municipalities with critical financial services.
Supporting the government's thrust for economic recovery, PayMaya has helped enable over 60 government agencies and units with digital payments acceptance, registering an overall 1,200% growth in government transaction value at the end of 2020.
With the entire country pivoting to digital to rebuild and recover from the COVID-19 pandemic, PayMaya is driving e-commerce growth in the Philippines through the power of its end-to-end payment ecosystem for consumers, enterprises, and government. In 2020, it processed over P95-billion worth of online shopping transaction value, which also helped push electronic payments as the preferred mode of payment versus cash when buying online. To further propel this growth, it recently launched the PayMaya Mall, which brings consumers and merchant partners together in one convenient platform through the PayMaya app. It also pioneered the use of QR Ph and payment links for online sellers, allowing them to conveniently offer cashless payments through PayMaya via social media or chat apps such as Viber and Facebook Messenger.
Conclusion
“Despite PLDT’s stellar performance, it is with great relief that we put 2020 behind us. It is tempting to say that we have seen the worst but 2021 comes with its own set of challenges – a worrisome economic outlook, prolonged uncertainty on the pandemic with possible new waves, mutations and a delayed vaccine rollout and of course, the entry of heightened competition from both new and current players. But with confidence built on how we not only weathered but thrived despite the “year from hell” that was 2020, we anticipate more growth in 2021. Anchored on the sustained demand for our data and broadband services, we expect a high single digit increase in consolidated service revenues and telco core income in the vicinity of P29-30 billion. We continue to invest heavily in our networks, looking at another P88-92 billion this year. If we are able maintain our momentum and deliver results as expected, we are prepared to consider paying out a 5% special dividend for 2021, on top of our regular dividend pay-out of 60%,” stated Pangilinan.
