PLDT mulls 49% stake sale of data center assets to Japan's NTT

The Philippine telco giant is reportedly in negotiations over the deal valued at around $750 million, which will help fund the construction of new data centers.

Gigi Onag, Senior Editor, APAC

May 9, 2024

3 Min Read
PLDT headquarters in Manila
Source: PLDT

Would the third time be the charm for PLDT? After previous aborted sale attempts, the Philippine telco giant is reportedly in talks with Japan's NTT to sell up to 49% of its data center business in a bid to cut debt as well as to fund ongoing and new data center projects.

PLDT chairman Manny Pangilinan confirmed the potential deal with Reuters on Tuesday, with anonymous insiders telling the news outlet that the transaction could be valued at $750 million. Both parties hope to reach an agreement by the second half of this year.

Through its subsidiary ePLDT, the company is the largest data center operator in the country holding about 65% of the total data center capacity. Its 10 facilities spread across the Philippines primarily serve major companies in the banking and finance, real estate, electronics manufacturing and government sectors. Collectively, the 10 existing PLDT data centers have a total capacity of 50 megawatts (MW).

Its eleventh facility – the 50 MW VITRO Sta. Rosa in Laguna, billed as the first true hyperscale data center in the Philippines – is set to go live this July with 4,500 racks. The soon-to-open facility reportedly cost PLDT at least $350 million to build.

According to PLDT's latest full-year results, its data center business along with its cloud services accounted for 8% of the company's total data service revenues in 2022 and 2023.

Scaling up data center build-up

PLDT started considering whether to sell a significant minority stake in its data center business for $500 million in 2021 to help defray the hefty costs of expansion, but the plan was put on hold. The stake sale – this time for up to $800 million – was back on the table in February last year, but it was also scuttled.

The reported negotiation with NTT is PLDT's latest attempt to find a partner that would enable the operator to raise the cash it needs to go full steam ahead in its data center build-up.

Two months ago, ePLDT president and chief executive officer Victor Genuino, told local media that the company is scaling up its data center expansion with the twelfth facility likely to be double the capacity of the one in Vitro Sta. Rosa.

He revealed that plans are also on the drawing board for two more data centers. The company is now scouting locations for data centers 13 and 14, and it has engaged different contractors for each of those projects.

"We need to understand that the data center industry is undergoing a huge transformation. We feel that there's a room for us to still build data center capacity to be ahead of the curve," said Genuino.

Last month, a new ePLDT business unit called VITRO Inc. was established – focused entirely on the construction and management of data centers. The company hopes to build the capacity needed to support the voracious data center requirements in the AI era.

"The surge of AI necessitates a rethink in the way we design and build our facilities and an even deeper focus on how we innovate. The creation of VITRO Inc. allows us to be more agile as we adapt to the evolving needs of the digital market and build more world-class facilities that would advance the Philippines' digitalization," Genuino told Philippine Star.

Citing a report from Structure Research, PLDT said the data center market in the Philippines was generating annual sales of $219 million as of 2023. The industry is expected to grow by an average of 36% until 2028.

A separate study from property analyst JLL showed that the bulk of the data center requirements are coming from hyperscalers, demanding as much as 36 kilowatts per rack.

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About the Author(s)

Gigi Onag

Senior Editor, APAC, Light Reading

Gigi Onag is Senior Editor, APAC, Light Reading. She has been a technology journalist for more than 15 years, covering various aspects of enterprise IT across Asia Pacific.

She started with regional IT publications under CMP Asia (now Informa), including Asia Computer Weekly, Intelligent Enterprise Asia and Network Computing Asia and Teledotcom Asia. This was followed by stints with Computerworld Hong Kong and sister publications FutureIoT and FutureCIO. She had contributed articles to South China Morning Post, TechTarget and PC Market among others.

She interspersed her career as a technology editor with a brief sojourn into public relations before returning to journalism joining the editorial team of Mix Magazine, a MICE publication and its sister publication Business Traveller Asia Pacific.

Gigi is based in Hong Kong and is keen to delve deeper into the region’s wide wild world of telecoms.

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