DITO Tel expands network, grabs bigger share of market
Competition in the local telecommunications sector is seen to further heat up with third telco player DITO Telecommunity (DITO Tel) projected to grab a bigger slice of the market as it ramps up expansion plans.
According to a study by First Metro Securities Brokerage Corp. and DBS, DITO Tel will grow its mobile subscriber market share from 7 percent last year to 16 percent by 2026.
PLDT Inc.’s share, as a result, is seen to drop from 49 percent to 44 percent while Globe Telecom Inc. is projected to shed 4 percentage points to 40 percent within the same time frame.
In the next two years, DITO Tel’s share of total industry revenues is also expected to grow from 5 percent to 11 percent as it grows its subscriber base.
First Metro and DBS expressed optimism towards the third telco challenger, who completed in September its fifth and final technical audit, which is part of its commitment to the government when it was granted the franchise.
DITO Tel, based on the audit, achieved 86.3-percent nationwide population coverage and minimum average broadband speeds of 92.87 megabits per second (Mbps) for 4G and 597.70 Mbps for 5G.
“Following the completion of its fifth and final technical audit, DITO Tel will shift its focus towards expanding its market share and achieving profitability,” the study noted.
DITO Tel CEO Eric Alberto said last month they had reached 13 million subscribers, which the company intends to grow to 16 million by the end of the year.
In addition, he said they were also working on increasing their population coverage beyond the current 86.30 percent.
As it lays down expansion plans, DITO Tel is about to receive further capital infusion.
Singaporean firm Summit Telco Corp. Pte. Ltd. is set to buy additional 9 billion common shares in DITO Tel’s parent company DITO CME Holdings Inc.
At present, Summit Telco already has 8.14-percent stake in the company while its parent Summit Telco Holdings Corp. holds 16.89-percent ownership.
China Bank Capital Corp. managing director Juan Paolo Colet tells the Inquirer the “potential subscription will make the Summit Telco group the largest shareholder of DITO CME as the additional 9 billion shares will take their combined stake to nearly 49 percent of the company.”
The additional share subscription is in line with DITO’s plan of securing up to P40.26 billion in fresh funding via private placements in the next five years or until the end of 2028.
The company last year received P5.5 billion from selling common shares to Singapore-based third party investors.
DITO has earmarked P27 billion in capital expenditures for this year to reach geographically isolated and disadvantaged areas where there is lack of internet connectivity.
5G technology
The study notes that DITO Tel is at an advantage when it comes to 5G technology, having the majority of the country’s spectrum for the tool that enables quicker internet connection.
Based on National Telecommunications Commission data, DITO Tel has a total of 140 megahertz (MHz) of 5G spectrum. Competitors Globe and PLDT only have 60 MHz each.
“Additionally, it is the sole telco company in the country operating on 5G standalone networks. These networks enable faster and more reliable connectivity through towers dedicated exclusively to 5G,” the report says.
The 5G technology enables download rates of more than 10 gigabits per second, which is 100 times quicker than 4G.
DITO Tel currently has 2,000 cell sites offering 5G connection across the country.
First Metro and DBS expect competitors to respond to the threat and ramp up their capital expenditures to “stay ahead of technological developments and counter DITO Tel’s 5G spectrum advantage.”
As of end-September, Globe has deployed additional 378 5G sites during the period. As a result, the 5G coverage in the National Capital Region has reached 98.51 percent.
The technology enabling faster internet connection is also now available in 94.91 percent of the key cities in Visayas and Mindanao.
PLDT wireless unit Smart Communications Inc. has a combined 5G and 4G network available to 97 percent of the population.
In August, it introduced a 5G-enabled mobile device—priced lower than most of the available phones in the market—with global information and communications technology company ZTE to grow its 5G subscriber base.
According to a report by mobile insights firm GSMA, 5G adoption in the Philippines is estimated to rise from just 6 percent in 2023 to 46 percent in 2030 as telco players invest in putting up more infrastructure.
This means nearly half of the Filipino population is expected to tap 5G when accessing the internet.
With this growth, 4G penetration is expected to go down from 80 percent to 51 percent in the same period.
In Asia Pacific, GSMA notes that mobile internet penetration is estimated to rise to 61 percent in 2030 from 51 percent in 2023.
Along with this, 94 percent of the region’s population is projected to own smartphones in about six years, an increase from 78 percent in 2023.
The contribution of the mobile economy to Asia Pacific’s gross domestic products is calculated to reach $1 trillion in 2030 from $880 billion last year, the GSMA study shares.
“The growth in Asia Pacific’s mobile internet usage over the past decade has been nothing short of remarkable and the region continues to innovate at a pace,” GSMA Asia Pacific head Julian Gorman says.
