PLDT (TEL) posted a total revenue of 181 Billion Pesos for 2020. TEL’s 2020 revenue is an increase of 11.8 Billion Pesos from 2019. TEL is able to translate that revenue into cash flow from operations of operations of 85.1 Billion Pesos. TEL’s 2020 85.1 Billion cash flow from operations is an increase of 15.7 Billion from 2019. With a strong cash flow from operations, TEL will be able to distribute a slightly higher dividend this year.

The strong 2020 results of TEL showed that it has regain technological leadership in the local telecommunication industry. TEL poured 88.2 Billion Pesos on infrastructure and technology upgrades in 2019. The massive capital expenditure in 2019 allowed TEL to recapture technological leadership in the domestic telco industry.

Capital expenditures leads to technological leadership. Technological leadership results to strong revenue and strong revenues results to increase cash from operations.

The key to the sustainability of TEL’s value is that capital expenditures must translate to increase cash from operations. TEL’s capex should count. In the past, TEL made capital expenditures that resulted to losses such as the Rocket Internet and Iflix investments. Even investment in Mediaquest PDRs has not made significant contributions towards the bottom line and even resulted to impairment charges.

TEL’s capital expenditures should result to significant improvement in cash flow from operations specially that TEL’s capital expenditures are mostly funded by borrowings.

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