Industry challenger DITO Telecommunity is aiming for a strong finish this year, lifted by the addition of two million new subscribers in the first five months, supporting its ambition to become profitable in 2028, company president Ernesto “Eric” Alberto said.
Alberto said investments in its 4G and pure 5G network helped the telco startup win the crown for the fastest internet speed in the country during the first quarter of 2024, according to performance monitor OpenSignal.
The next milestone for DITO, a venture between Davao tycoon Dennis A. Uy and China Telecom, is validating its compliance with the 84 percent population coverage target this year.
Profit challenge
Alberto, a banking veteran and the former No. 2 executive at PLDT Inc., said that thinking outside the box and discarding outdated technology mindsets is the way forward as DITO enters its next growth phase.
“Technology keeps changing. What you knew about technology in the last five years, the last 10 years, you can throw out the window,” he told InsiderPH.
“One thing that is constant is respect for the P&L [profit and loss] and my years in banking provided the foundation that helps me,” he said.
Subscriber increase
DITO continues to post losses, but this is expected for a business startup in an industry that requires massive capital expenditures.
In 2023, parent firm DITO CME Holdings narrowed losses by 41 percent to about P8 billion.
Revenues are increasing, especially with the addition of two million new subscribers, pushing the total to 11 million users.
(Note: Industrywide subscriber count went down after the implementation of the SIM Registration Act).
Price war truce?
Alberto does not fear the return of an industry price war since telcos can compete healthily on the basis of network performance and customer service.
Internet costs have gone down in recent years, partly due to the entry of competitors such as DITO and fiber internet company Converge ICT.
Alberto said disruptive pricing at these levels is not sustainable and will hurt the industry.
“Actually, the reverse is true and telcos are laddering to increase ARPU [average revenue per user],” he said.
Revenue boost
With a larger user base, Alberto has seen revenues rise significantly from around P700 million per month when he assumed the role of president.
Given its monthly ARPU of P128, DITO is generating revenues of at least P1.4 billion per month with 11 million users.
Alberto said they are also working to contain costs, which is easier to do without any legacy baggage.
Funding obstacles
Early on, Alberto understood that the main challenge was raising funds, not network operations, since DITO had access to technology and expertise from both local and foreign experts.
“The problem was funding. Until we plugged that hole, we had no subject matter to speak of,” he said.
He exerted efforts on securing money, paving the way for the signing of a landmark $3.9 billion 15-year project finance facility and the partial sale of Uy’s stake in DITO CME to outside investors.
Exceeding commitments
DITO’s five-year network rollout pledge to the Philippine government is coming to a close, but Alberto said they will surpass requirements and continue operating for the long-term.
He said the 84 percent population coverage will soon be audited and confirmed by the National Telecommunications Commission.
“We will then move toward enhancing our 5G and 4G coverage to as much as 90 percent population coverage,” he said.
Standout 5G operator
After the auction of the third major telco license in 2018, DITO gained control of about 60 percent of the available 5G spectrum and about 20 percent of 4G frequencies.
DITO is one of about 50 operators worldwide that successfully deployed a standalone 5G network, meaning this does not rely on any legacy equipment.
DITO has achieved the commercialization of the 5G SA core network and is now testing network slicing capabilities, which is a unique feature of 5G that allows an operator to strategically allocate internet resources.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
