DITO Telecommunity Corp. officials on Thursday said there were sufficient funds to complete its massive network rollout despite the sudden cancellation of a multibillion-peso fundraising effort by parent firm DITO CME Holdings Corp., owned by Davao-based tycoon Dennis A. Uy.
The P8-billion deal was pulled out due to weak demand from institutional investors and “other perceived risks,” months before President Duterte—who considers Uy a prominent campaign donor—steps down from power.
In a briefing with reporters, DITO Telecommunity sought to counter any perception its future was clouded by the looming administration change while asserting that commitments made by its major shareholders, Uy and state-run China Telecom, remained intact.
“Whoever wins in the next election, we want to partner with that next administration,” DITO Telecommunity chief administrative officer Adel Tamano said on Thursday.
“We are an operating company, we are viable, we have commitments to the government that we cannot fail to keep,” he said.
The failure of DITO Telecommunity to meet its five-year commitment, which formally ends in 2024, would result in the loss of its franchise and the forfeiture of a multibillion-peso bond. From an initial amount of P25.7 billion, Tamano said the bond had gone down to about P8 billion since this was tied to the company’s capital and operational expenditures, as outlined under the terms of reference of its license.
Chinese banks
This also suggested that DITO Telecommunity had spent over P170 billion since the start of its rollout, based on the original capital expenditure budget of P257 billion.
While DITO CME’s stock rights offering was meant to finance a portion of DITO Telecommunity’s network expansion, Tamano said their funding was never in doubt.
On Thursday, he pointed to their plans to borrow over $4 billion from foreign lenders, including Chinese banks.
“The funding was there at the onset,” Tamano said. “When you talk about long-term funding, there are legal things you have to do, there are negotiations on commercial terms. It does take some time. We will be finishing that within the year.”
Since its commercial launch last March 8, the company has reached about six million subscribers, most of whom were actively using the service, DITO chief technology officer Rodolfo Santiago said during the briefing.
He said the company was targeting 12 million subscribers for the rest of the year or roughly 10 percent of the country’s mobile market.
Santiago said the company had over 4,500 cell towers at present and they expected to pass their third network audit in July requiring a population coverage of 70 percent and a minimum average internet speed of 55 megabits per second.
He added that DITO Telecommunity was budgeting over P50 billion this year to raise more cell towers, complete another phase of its submarine cable system near Palawan and build 10 regional data centers nationwide.