DITO CME Holdings, Inc. said it is in talks with interested parties for potential capital-raising agreements to support its telecommunications business, DITO Telecommunity Corp.
“We are talking to a lot of interested parties. In due time we will announce. [These are] both local and international,” DITO CME President Ernesto R. Alberto told reporters in an interview last week.
Mr. Alberto said the telecommunications industry still attracts interest from the investment community.
“The market has been very lackluster in the last three years, with the pandemic and all, but at least it is coming along, things are getting better and there is a lot of interest from the investment community particularly in this unique space of having a digital active country with a young population with only three major enablers,” said Mr. Alberto.
He also said that the company will continue to spend a minimum of $1 billion a year to catch up with incumbent telco players, noting that the industry is capital-intensive.
He said the primary objective of DITO CME is to raise as much investment to fund its critical projects as the country’s so-called “third telco.”
“The benefit of us being a new player is we are devoid of any legacy; it is all brand new 4G. And if we think 4G is going to be replaced by 5G in the clear horizon that’s where we should participate in the play,” he added.
In its quarterly report, DITO CME said that it is expecting the closing of a project finance loan facility from creditors of up to $3.9 billion in the second half of the year.
On Feb. 13, DITO CME entered into a shareholder loan agreement amounting to P5.2 billion which it can draw on to address operating expenses and maturing obligations. By the end of the second quarter, the company said that its total drawdowns totaled P3.5 billion.
DITO CME has committed to spending P257 billion over a five-year period for the commercial rollout of DITO Telecommunity to pass the regulatory audits within the period.
“We satisfied the fourth-year technical audit of achieving 80% coverage so what remains is the fifth and last year of regulatory audit that will herald that we are indeed a full-pledge telco player in the industry,” said Mr. Alberto.
For the fifth technical audit, the company is required to increase its population coverage to 84% while maintaining the minimum speed of 55 megabytes per second for 4G.
“Despite the challenges, the telco is working hard and still very hopeful that they can meet EBITDA (earnings before interest, taxes, depreciation, and amortization) breakeven by end of 2025 and looking to make a profit in 2028,” he said. — Justine Irish D. Tabile