Telcos set for modest full-year gains — analysts

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.

- By Ashley Erika O. Jose Reporter

"Listed Philippine telcos will deliver modest growth by year-end, 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 email 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.