Telco, fintech firms emerge as biggest winners in 2020
As the year 2020 came to a close, it was time for businesses to count their wins or losses. And in a year like no other, there were clear winners and losers in telecommunications, media, transport and infrastructure.
First were telecoms, which soared as demand for data—already a desired service—exploded during the COVID-19 lockdown.
This kept telco giants like PLDT Inc. and Globe Telecom profitable despite the heavy spending requirements that come with the business.
But 2020 opened the door to emerging competitors.
Facing a surge of new applications for home broadband, Pampanga-based businessman Dennis Anthony H. Uy decided it was time to take Converge ICT Solutions public. This turned out to be the biggest Philippine IPO on record.
It cemented Uy’s place among the country’s dollar billionaires and minted Converge as the third-biggest technology company in the country.
From Davao is Dennis A. Uy, whose Dito Telecommunity advanced in its bid to challenge PLDT and Globe in the mobile sector.
While slated to launch next March, Dito is rolling out cell towers at a record pace.
Davao Uy’s friendly ties with the administration and backing from partner China Telecom notwithstanding, Dito is benefiting from the government’s recent war on red tape that has plagued the industry for years.
But concerns still hang over Dito because of its Chinese partner, prompting the venture to announce a number of safeguards. This has done little to quell fears of some lawmakers and, more importantly, cybersecurity experts who understand the real threat of spying.
Nevertheless, private telcos will continue to play a crucial role in Philippine communications. The Department of Information and Communications Technology still struggles to win full financing support for a national broadband plan. Its officials, however, said the project could begin this year.
Beyond telcos, the financial technology sector was another clear winner. Consumers know them here as as companies like PayMaya and GCash.
Their mission to convert people to cashless made great strides in 2020—their exponential growth figures showed.
The television sector saw its own upheaval when members of the House of Representatives allied with President Duterte killed ABS-CBN Corp.’s franchise bid, triggering thousands of job losses and denying tens of millions of viewers across the country of an important source of information.
Main rival GMA Network gained market share and managed to even surpass 2019 earnings this year.
ABS-CBN focused on its online and pay-TV businesses and made a limited comeback on free TV via A2Z Channel 11 a few months later.
Airlines were also far less fortunate in 2020 as major domestic carriers Philippine Airlines, Cebu Pacific and AirAsia Philippines posted heavy losses.
This was initially due to the lockdowns but restrictions— in many cases confusing—still stand today.
The industry remained at a fraction of prepandemic operations and full recovery remained elusive for years.
In fact, the International Air Transport Association said in its latest forecast the global airline industry would still lose some $38.7 billion this year. That is better than the $118.5-billion loss expected for 2020.
From prepandemic forecasts of a manpower shortage, the aviation sector in the Philippines already slashed thousands of jobs in 2020 and more could continue into this year.
Some are taking bigger steps to survive.
PAL is considering creditor protection filings in the United States early this year. This will give it space as it restructures billion of dollars in obligations.
Big losses also hit the maritime sector for the very same restrictions that have curbed air travel.
One of the largest logistics and shipping companies in the country, the Chelsea Group, is seeing recovery in the second half of this year, CEO Chryss Alfonsus V. Damuy said.
No one is counting this industry out at all. The Philippines is an archipelago and people will return to the skies and seas once they feel safe to do so. The essential services of these companies will also be called upon sooner rather than later to transport vaccines once these are widely available.
Meanwhile, the slowdown of the aviation sector opened up a timely opportunity to solve the old problem of congestion, especially in Manila’s Ninoy Aquino International Airport.
But recent signals from the Philippine government indicated this might not happen soon or at all during this administration.
The influential Manila International Airport Authority unceremoniously stripped the Megawide Construction Corp.-GMR Infrastructure consortium of its primary rights to rehabilitate Naia mere months after the first proponent backed out.
Making matters worse was the lack of clear reasons, raising concerns over the lack of transparency and even politics behind the decision.
San Miguel Corp.’s planned airport city in Bulacan province was not able to begin construction last year although the conglomerate said it plans to start in early 2021.
Last but not least is the Cavite government’s plan to bring a Chinese partner and build a massive new gateway on Manila Bay.
The project remains exactly where it was this time last year: yet to start and uncertain.
There were also many wins in this area.
Megawide-GMR completed a new passenger terminal in Clark Airport, doubling capacity in the central Luzon gateway.
The Department of Transportation and the Department of Public Works and Highways continued their infrastructure rollout despite constraints caused by the global health crisis.
This included one of the administration’s landmark projects, the Metro Manila subway, which is still poised for “partial” operations in 2022.
Metro Manila’s decongestion plan saw another win. San Miguel Corp.’s 18-km Skyway Stage 3 was finally opened, providing motorists an alternative road within the busy capital district.
While the Skyway Stage 3 was a game changer in its own right, losers this year were those without cars as commuting remained a challenge, especially for those working in Metro Manila amid COVID-19.
Many have turned to alternative options such as biking. However, conditions for cyclists remained hazardous with many motorists unaccustomed to sharing roads with bikers, coupled with poor or nonexistent biking infrastructure.
Sustainable transport advocates have warned that opening up roads without improving mass transport and alternative options would only worsen congestion over the long-term.
