Online stockbroker Colfinancial.com estimates telcos could realize a revenue of P423 billion this year, up 5 percent from the projected topline for last year.
“Telcos’ core profits are projected to increase by only 5.5 percent as combined operating expenses and finance costs remain largely unchanged in the short term despite the sale of their tower assets,” Colfinancial said.
Colfinancial expects the worst to be over for the industry, saying the maturing broadband industry coupled with the sale of a large percentage of telcos’ tower assets to independent tower companies should reduce their capital expenditure (capex) requirements.
This, in turn, should help bring down telcos’ debt levels, it noted.
“Concerns that their mobile revenues would go down because of the government’s SIM (subscriber identity module) registration requirement proved to be overblown as revenues remained resilient,” it added.
Colfinancial, however, expects earnings growth to remain slow against the backdrop of a mature mobile and broadband business, while debt levels are not expected to go down significantly in the short term.
In the broadband business, the online stockbroker noted a “marginal room” for growth as the fiber market matures.
“We expect the growth of telcos’ broadband revenues to increase marginally by 4.5 percent in 2024. Growth this year will be mostly driven by the expansion of the fixed wired segment,” it said.
“Total broadband subscribers for the industry were down 6.8 percent. We expect this trend where fixed wired subscribers are growing while fixed wireless subscribers are falling to continue in 2024,” it added.
Colfinancial.com said the modest growth in revenues, coupled with lower capex requirements, should enable telcos to improve their cash flow.
“This in turn should allow them to reduce their leverage position and sustain their cash dividends,” it added.
