Dennis Uy's Dito Telecom tells critics: We have money
MANILA, Philippines – Dito Telecommunity rejected speculations that it does not have the cash to roll out services, as Dennis Uy's other companies grow through debt.
"We have already drawn down $500 million (P25 billion) from Bank of China," Dito chief administrative officer Adel Tamano told reporters on Thursday, February 20.
Tamano added that Dito will be funded mostly, if not entirely, by foreign banks, as local ones simply do not have the capacity to fund such a capital-intensive endeavor.
During the bidding for the 3rd major telecommunications player, Dito committed to spend a whopping P257 billion in just 5 years, with the bulk or P150 billion in the 1st year. (IN CHARTS: Udenna Corp-China Telecom's promises)
The company has also given the government a P25-billion bond, which they will lose should they fail to meet requirements.
Dito's commercial operations have been pushed back thrice, with the latest target now March 2021. This led to some analysts in the telco industry doubting that the company has the cash to burn.
"The challenge is not really the funding, but the rollout, building of the towers, data centers," Tamano said.
Will Dito be able to spend P150 billion and build all the facilities required to meet its promises in 2020?
Dito chief technology officer Rodolfo Santiago said they may actually spend less, but still deliver all of their commitments.
"We might be underspending, but...it's a positive metric. Underspending [means] cheaper rates for the consumer," Santiago said.
"The way we're doing things now, we may be saving some, rather than spending more, because the detailed design shows that we will be spending less to complete. I'm confident that the way things are going, we might be underspending."
Dito aims to build at least 1,600 towers to cover 37% of the Philippine population in 2020. (READ: Manny Pangilinan downplays Dennis Uy's 3rd telco)
When asked whether the company is open to raising funds by giving more equity should foreign ownership restrictions be eased, Tamano and Santiago said the answer depends on market conditions.
"It's hard to say because it depends how business will go. If we are doing well, there will be more Filipino investors," Tamano said.
Uy's companies Udenna Corporation and Chelsea Logistics own 60% of Dito, while 40% is owned by China Telecommunications Corporation.
House Bill No. 78, which aims to allow full foreign ownership of public utilities like telecommunications, only needs a 3rd and final reading to hurdle the lower chamber.
But opposition lawmakers said the measure is unconstitutional and a ploy for the Duterte administration to sell out the Philippines to foreign powers. – Rappler.com