Fitch Ratings on Monday kept its negative outlook on the Philippine telecom industry as it expects the industry’s debt to rise on higher capital expenditures this year.
“Fitch has a negative outlook on the Philippines telecoms sector, reflecting our expectations that average FFO [funds from operations] adjusted net leverage will rise towards 3.0x in 2020,” the credit rating firm said.
Fitch said PLDT Inc. and Globe Telecom Inc’s capex push ahead of the launch of third mobile network operator, Dito Telecommunity “will delay deleveraging,” despite a stronger fourth quarter on accelerating data monetization and more stable competition.
Globe is budgeting P63 billion this year while PLDT is more aggressive on capex, at P83 billion.
PLDT’s capex ramp-up is driven mainly by P18.5 billion of sales-driven capex for broadband installations, though we believe the amount could vary depending on the pace of actual connects and upgrades for fibre-broadband services.
The company is also accelerating subscriber migration to its 4G network, after investing heav