2021 Telco Capital Expenditure Showdown Looms

Published December 18, 2020, 4:36 PM

by Edgard Hilario

As the country’s third major telco player is set to launch commercially in March 2021, incumbents Globe and Smart are preparing their war chest, significantly increasing capital expenditures.    Globe is set to spend P90 billion, while Smart has allotted P92 billion in 2021.  Both investments are the highest annually for each telco for the past six years.     

Since President Duterte directed LGUs to hasten issuance of cellular tower construction permits, average monthly construction permits issued to telcos have considerably increased.  Since July 2020, an average monthly increase of construction permits issued to Globe rose by almost 600% and to Smart by almost 200%.    The network build-up of both Globe and Smart are expected to go on full gear in 2021 as third telco player, DITO, plans to go head on with the incumbents fulfilling its commitment of spending P150 billion this year for its infrastructure roll-out.    

Globe claims that it wants to deliver first-world internet for every Filipino and indicated that it exceeded site rollout and network upgrade targets for 2020. The telco reported deploying 1,300 new cell sites and upgrading over 10,800 sites to Fourth Generation/long-term evolution (4G/LTE) this year.  It has also deployed 708 5G sites in Metro Manila, as well as certain cities in Mindanao.   

Smart, meanwhile, plans to benchmark itself, not just with local competition, but with neighboring countries like Thailand and Vietnam.  It said that it would like their network performance to be at par with global companies. PLDT’s fiber infrastructure is the most extensive in the country at more than 422,000 kilometers. This fiber infrastructure supports covers 96 percent of the population and are present in 95 percent of cities and municipalities.     Smart has also increased the number of its base stations to over 58,000 this year, increasing the number of base stations by 20 percent compared to end 2019. It  has rolled out additional 5G sites as it accelerates its 5G commercial services nationwide.     

Fiber internet company, Converge, is also expected to increase its capital expenditure from P19 billion to P23 billion next year as it aggressively provides pure end-to-end fiber internet connection to its market.

 
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