Fitch: Third telco delay credit positive for PLDT, Globe

ABS-CBN News

Posted at Jan 31 2019 10:46 AM | Updated as of Jan 31 2019 11:59 AM

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MANILA -- Potential delays in the roll out of the Philippines' third telco will be positive for the credit standing of dominant players Globe Telecom and PLDT Inc, Fitch Ratings said Thursday.

Some senators are questioning the validity of the congressional franchise held by the Mislatel consortium that includes China Telecom and tycoon Dennis Uy. They said some conditions of the franchise were violated.

Globe and PLDT have a head start in building infrastructure for 5G, the next generation wireless standard, said Janice Chong, a director at Fitch Ratings.

The third telco will also need to ensure domestic roaming or connectivity with PLDT and Globe, Chong said.

"A delay in the third telco will be positive for PLDT and Globe," he said.

A partner in the Mislatel consortium, tycoon Dennis Uy, testifies before a Senate hearing on the third telco. George Calvelo, ABS-CBN News/File

PLDT is rated a notch higher than Globe because it has fewer debt. Globe has "better executions" in mobile but PLDT can rely on its fixed line business, she said.

The two firms are expected to "ramp up" capital spending on 5G next year when more devices are available. 

"There isn't really a solid business case for the moment," she said, referring to 5G.