PLDT (TEL) moves to defend market leadership from Dito Telecommunity, CNVRG

For the nine-month period ending September 30, 2020, PLDT (TEL) generated a total revenue of 133.2 Billion Pesos.  For 9M20 TEL managed to increase revenue by 8.8 Billion Pesos or 7% more than the revenue for the 9M19.  With the revenue growth, TEL is telling the market that it is the leading telco in the country.

The increase in revenue was translated to an increase in cash flows from operations.  For the 9M20, TEL generated cash from operations of 65.1 Billion Pesos. It is an increase of 7.4 Billion Pesos from last year of the same period.

The increase in cash flows from operations allowed TEL to invest heavily on its network.  For the nine-month period, TEL invested 59 Billion Pesos on its network.  TEL has to invest heavily on its network as competition intensifies.

Fresh with cash from its IPO and credit commitments from leading banks, CNVRG is set to expand its all-fiber broadband network all through-out the country.  Then there is the third telco, Dito Telecommunity (Dito). China Telecom provides financial and technical support to Dito Telecommunity.  Dito ambitions to be the leading telco in the country, not just to be the third telco.  In just a matter of six (6) months, Dito grew its total non-current assets to 37.4 Billion Pesos.  That would be a growth of 3x in a span of 6 months. Dito is expanding fast.

TEL growing its revenue and cash generation from operations and at the same time investing heavily on its business tells the market that it is defending its position as the leading telco in the country. TEL is addressing the “triple threat position” it is facing. TEL cash dividends seem to be secured.

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Disclaimer and Disclosure: This is an independent analysis for discussion purposes. This analysis aims to give stock traders and investors an independent viewpoint.  Accuretti Systems Inc. trades stocks in the Philippine market.

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