Stock Market Commentary: DITO CME Announces 4 Millionth Dito Tel Subscriber


Merkado Barkada

November 11, 2021 | 8:30

In a statement covered by ABS-CBN, one of DITO’s senior executives said that DITO CME [DITO 6.64 0.30%] had 4 million subscribers as of November 8.

The executive said DITO’s goal is to reach 5 million subscribers by the end of 2021 and that it has already built 3,300 cell towers out of the 4,500 it planned to do this. year. DITO’s national coverage is now around 50%.

MB RESULT

Another day another DITO statement that moves the goalposts. First, the most obvious is the cell tower problem.

They still have 1,200 towers to build but have only added 300 towers to their network since July 2. DITO has said they are “approaching” 1,900 towers by the start of 2021, so even though we give them 1,900 for the start of 2021, that means they have only built 1,400 towers in the past. during the 44 weeks since the start of the year. It’s 32 per week.

We only have 7 weeks left before we flip the schedule and start over, so given their rate so far we would expect them to only add about 222 more laps for a total of 3,522 laps. cell phones at the end of the year. .

That’s a brutal 22% below their stated target. Now, coming down to the 4 million subscribers, the problem here is that DITO’s subscriber acquisition rate drops dramatically. On the one hand, this might be a reasonable result; after all, doesn’t it just feel like it makes sense for the rate to drop as enthusiastic registrations en masse during the launch?

On the flip side, given that the launch was a “soft launch” in a handful of neighborhoods, on only a handful of phones, and hadn’t even hit Metro Manila yet, it seems more likely than a rollout. competent registration speed increased over time and more and more of the population was covered by the network.

Unfortunately for DITO shareholders, this does not appear to be the case.

Based on DITO’s statements in August, when it claimed to have had 2 million subscribers “just 5 months after launch”, we said it took DITO 3 months to get its 1 million, and only 2 months to get his 2nd million; extrapolating, we estimated it would get 3 million subscribers by mid-September, 4 million by mid-October, and around 7 million subscribers by the end of the year.

That’s what would happen if DITO’s subscriber onboarding rate in August was sustained, you know, back when it was only in 200 cities and covered only 37% of the population.

Where is DITO’s analysis of why the enrollment rate is slowing? What is the management team doing to resolve this problem?

That DITO’s rate is dropping so rapidly in just three months is a bit surprising, and the bottom line is 28% fewer subscribers by the end of the year. Sigh.

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Merkado Barkada’s opinions are provided for informational purposes only and should not be taken as a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so every investor should do their due diligence before trading as the facts and figures in each particular article may have changed.

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