PLDT Inc., the Manila-based telecom and digital services provider, has upped its broadband market share with the acquisition of Sky Cable Corp. for about $124 million, according to Fitch Rating’s CreditSights credit watch unit. The deal adds roughly 350,000 customers to PLDT’s base of about 3.9 million broadband subscribers and raises PLDT’s broadband market share to an industry-leading 48 percent. The company’s competitors, Globe Telecom Inc. and Converge ICT Solutions Inc., account for around 31 percent and 21 percent of the market, respectively, CreditSights estimates. Several small broadband players collectively hold less than a 1 percent share.
Expected to be accretive, the deal will help grow PLDT’s EBITDA by about 4 percent and increase its EBITDA margin by 20 basis points to almost 49 percent, according to CreditSights. Though still subject to regulatory approval, CreditSights expects no “major regulatory hurdles” given that Sky Cable has around 2-3 percent of broadband connections and the deal should not materially change the competitive landscape.
Separately, PLDT, last week, agreed to sell a portfolio of its telecommunications towers to a firm backed by KKR & Co. for over $220 million, as part of a program to divest digital infrastructure assets including up to 2,000 towers. Smart Communications Inc. and Digitel Mobile Phils. Inc., two PLDT subsidiaries, will sell 1,012 towers and associated infrastructure to Frontier Tower Associates Philippines Inc., Bloomberg reported.
“This transaction cements our relationship with one of the largest independent tower companies in the country, providing the group with another important partner to support our expansion, while unlocking additional value,” PLDT Chairman Manuel V. Pangilinan said in the statement.
The company, which has a market value of about $5.1 billion, is backed by Japan’s NTT and Hong Kong-based investment firm First Pacific Co., according to company reports. CreditSights said that the telco giant’s recent tower sale was “welcome from a credit standpoint, as PLDT will have greater financial capacity” to fund its capital expenditures and to “deleverage” its debt position.
The company divested two portfolios of towers in April 2022, for about $1.3 billion to units of Edotco Group. and EdgePoint Infrastructure, Inside Towers reported.
This latest transaction would be Frontier’s second telecom towers deal in the Philippines in less than a year. Globe Telecom Inc. in August 2022 announced a deal to sell two portfolios of towers to Frontier and a Stonepeak Partners joint venture for about $1.3 billion, Inside Towers reported.
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