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China Telecom PHL partner sees profit for venture by 2026

China Telecommunications Corp.’s Philippine venture expects to post its first profit in as early as four years, the majority shareholder of the Southeast Asian nation’s third mobile-phone provider said.

A positive bottomline “will emerge” for DITO Telecommunity Corp. by 2026 or 2027, said Ernesto R. Alberto, president of DITO CME Holdings Corp. that’s owned by businessman Dennis A. Uy. 

“We are also on track on the business plan despite two-and-half years of the pandemic,” Mr. Alberto said in an interview this week with other officials of Mr. Uy’s businesses. 

The telecom venture’s earnings before interest, taxes, depreciation and amortization is also on track to be positive as early as end-2024 “assuming no event risk,” Mr. Alberto said.

DITO CME may sell down its 53% stake in DITO Telecom to raise its equity share to help fund venture’s expansion and has asked banks to find it an “ideal private equity placement partner,” Mr. Alberto said.

Still, the DITO CME president said a preferred option is to use its share in DITO Telecom to raise its share of equity component with a 2-3 year loan with balloon payment. “We are confident that the value of shares will be much more — barring of course, event risks — two, three years down the road,” he said, adding that talks are on with foreign and local lenders on this “bridge facility.”

DITO Telecom is also optimistic that it will complete by November talks with a group of lenders led by Bank of China for a $4.1 billion long term loan to fund rollout of its network which is required to have 84% population coverage by 2024.

By 2024, DITO Telecom “will be on even keel competition with the incumbents in terms of capacity but with a much more brand-new network without any legacy baggage,” Mr. Alberto said.

The mobile-phone provider, which started commercial operations in March 2021, is close to hitting its 12 million customer goal by year-end, with the subscriber count currently nearing 11.5 million. — Bloomberg

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