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Dito hit by forex loss and subscriber churnDito hit by forex loss and subscriber churn

Philippines challenger Dito Telecom grew sales by 50% but accounts remain mired in red.

Robert Clark

November 21, 2023

2 Min Read
Dito logo on a smartphone in front of Dito website
(Source: Timon Schneider /Alamy Stock Photo)

New entrant Dito Telecom continues to bleed cash as it tries to get traction in the Philippines' mobile market.

Its parent, Dito CME Holdings, narrowed its Q3 loss to 9.77 billion Philippine pesos (US$176.4 million) from PHP11.0 billion ($198.8 million) a year ago, on just PHP3.1 billion ($56.1 million) in revenue.

But its capital deficit has deteriorated to PHP39 billion ($704.9 million), out from PHP28 billion ($506.1 million) last year, and liabilities now exceed assets by PHP212 billion ($3.83 billion), the company's Q3 filing reveals.

Interest expense grew 18% to PHP2.2 billion ($39.8 billion), taking its interest bill for the year so far to PHP6.2 billion ($112 million), up 86%.

It also made a massive forex loss of PHP4.6 billion ($83.1 million), a slight improvement over the PHP6 billion ($108.5) loss a year ago, but still almost 50% larger than total revenue.

The company has leaked a lot of subs this year as well, which it attributes to the government's real-name registration program and interconnection issues.

The total number of subscribers has plummeted from 14 million at the end of 2022 to just 8 million in August, well behind its 2023 target of 28 million. Dito acknowledges it lost customers due to the SIM registration scheme but says these were non-paying customers.

Interconnection dispute

But it says the calls allegedly dropped by incumbents PLDT and Globe – part of a long-running dispute – have also driven customers away.

Dito has said the call connection rate has been as low as 75% - a claim the other telcos have strongly denied.

Despite the slump in sub numbers, Dito showed topline progress, with quarterly revenue up 50% and non-service revenue now accounting for 29% of sales. Revenue for the first three quarters increased 60% to PHP8.08 billion ($146.0 million), with service revenue growing 58%.

Its cash position is also much stronger since selling shares through private placements and taking out a major new loan.

It signed a $3.9 billion 15-year loan in September with a syndicate of local and foreign banks that will be used to fund Dito’s network rollout and bridge existing loans.

It also raised PHP5.5 billion ($98.5 million) from the sale of stakes to two Singapore-based holding companies in separate transactions.

It sold a PHP2.2 billion ($39.76 million) share to Xterra Ventures in August and last month raised PHP3.3 billion ($59.7 million) by disposing of a further stake to Summit Telco Corp.

The company said in its filing it plans further fundraising activities late in 2023 and early 2024 to meet Dito Telecom's funding requirements.

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About the Author(s)

Robert Clark

Contributing Editor, Special to Light Reading

Robert Clark is an independent technology editor and researcher based in Hong Kong. In addition to contributing to Light Reading, he also has his own blog,  Electric Speech (http://www.electricspeech.com). 

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