“We think the acquisition represents a logical strategic addition to PLDT’s dominant cash-generative broadband business,” CreditSights said.The transaction, in addition, is anticipated to grow PLDT’s earnings before interest, tax, depreciation and amortization by 4 percent and Ebitda margin by 20 basis points to 48.7 percent.
As for antitrust matters, CreditSights sees no “major regulatory hurdles” given that Sky only has a relatively small broadband market share of around 2 percent to 3 percent. The merger, as such, “should not materially reduce industry competition post-acquisition by PLDT.”Meanwhile, CreditSights said that the telco giant’s recent tower sale was “welcome from a credit standpoint, as PLDT will have greater financial capacity” to fund its capex and “deleverage.
The Pangilinan-led company just sold 1,012 towers, which are primarily in Luzon, for P12.1 billion to Frontier Tower Associates Philippines in line with its asset-light strategy. Following this deal, which is expected to be completed this year, PLDT has now monetized over 7,500 towers for P98 billion.“The move to sell passive infrastructure allows telcos to focus more resources and shift to active telecom infrastructure rollout such as fiber and radio equipment,” PLDT said previously.
It explained the partnership with independent tower companies also provides the industry access to global best practices and technologies related to operating towers.
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