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Presentation

Melissa Vergel De Dios: Good afternoon, and thank you for joining us today to discuss the company’s financial and operating results for the First Quarter of 2024. A copy of today’s presentation is posted on our website. For those who have not been to do so, you may download the presentation from www.pldt.com, under the Investor Relations section. Kindly note that this briefing is being recorded. A podcast of this event will be available on our website after the call. A QR code for the presentation is on the screen and the confirmation notices detailed to you. For today’s presentation, we have with us our Chairman and President, Mr. Manny Pangilinan; Mr. Danny Yu, Chief Financial Officer and Chief Risk Management Officer; Ms. Marilyn Aquino, our Corporate Secretary and Chief Legal Counsel; Mr. Orlando Vea, Founder and CEO of Maya Philippines; as well as other members of the PLDT Group’s management team.

At this point, let me turn the floor over to Mr. Yu to begin the presentation.

Danny Yu: Good afternoon, everyone. Allow me to share with you PLDT’s financial and operating results for the first quarter of 2024. Consolidated service revenue for the first quarter grew by 3% to ₱48.7 billion year-on-year. On gross basis, service revenues were higher by 5% compared to the same period last year. Expenses grew moderately by 1% to ₱21.4 billion. Consolidated EBITDA rose by 5% to ₱27.3 billion with EBITDA margin stood at 52%. Telco core income, excluding the impact of asset sales in Maya, expanded by 8% to ₱ 9.3 billion. Next page. On a segment basis, the strongest growth was registered by our Individual or Mobile business, having grown 7% or ₱1.3 billion to ₱21.1 billion in the first quarter. The Enterprise segment recorded a 3% revenue increase to ₱12.1 billion.

While Home segment revenue were stable year-on-year at ₱15 billion, Fiber revenues were higher by 7% or ₱900 million compared to the same period last year. Let me now go through the segments in greater detail. On this slide, we highlight that while the headline service revenue growth stood at 3%, the actual improvement, excluding the drag from legacy revenues, stands at 8%. In the Individual segment, mobile data accounting for 88% of the total segment revenues grew by 11% year-on-year versus segment growth of 7%, which reflected the impact of the drag from legacy SMS and voice. Fiber-Only revenues, which account for 92% of Home segment revenues, rose 7%, while the overall Home segment revenue were stable year-on-year. Corporate data and ICT, the growing revenue streams under the Enterprise segment, were higher by 8%, stronger than the overall segment revenue increase of 3%.

Next, please. Service revenues for the Individual segment jumped 7% in the first quarter, reflecting strong data monetization. Blended ARPU was higher by 21% compared with a 10% rise in average usage. Note that the seasonal quarter-on-quarter dip in the first quarter was lower than the dip in the same quarter last year. Other indicators of improvement in segment performance are: the increase in mobile data users to 39.4 million, an 11% growth in mobile data revenues, and a 7% rise in each of prepaid and postpaid revenues. Among the initiatives to accelerate growth are: locking in customers for longer periods, driving retention with eSIMs, growing the adoption of 5G, and a structured price laddering for prepaid. Next, please. 92% of revenues on the Home segment are now from the Fiber business.

Fiber-Only revenues continued to improve, recording a 7% rise year-on-year to ₱13.7 billion. Home Fiber ARPU saw improvement year-on-year and remain at around the 1,500 level. Increased focus on quality of services sought reduced churn. Fiber churn improved to 1.82% for the first quarter of the year. PLDT is of the view that there are unserved and underserved markets in the home broadband space. This includes new areas, potential customers at the lower end of the market as well as niche markets at the higher end. PLDT continues to leverage its unique advantage of having an integrated network, which enables it to offer a suite of fixed and wireless services at different price points to cater to different segments of the market. PLDT continues to enjoy strong brand equity and superior network quality, making it a formidable competitor in the market.

Next. While the Enterprise segment registered a 3% year-on-year growth in the first quarter of the year, the growth from Corporate data and ICT were stronger at 8%. The growth drivers were: core connectivity, which grew 2% due to higher fiber and managed IT data revenues; higher ICT revenues from cloud services; ePLDT managed services as well as technical solutions. Worth noting is the growing revenue contribution from A2P or application to phone services, which are the SMS OTP, or onetime password messages related to online transactions. Included in our enterprise offers are differentiated SD-WAN, managed networking and IoT platform portfolio of services. We also continue to expand our capabilities in AI and cloud. The Sta. Rosa data center remains on track with the first 10 megawatts capacity expected to come on stream by July this year.

Full capacity is expected to be a year ahead of competition, making ePLDT well positioned to serve the existing robust demand from hyperscalers. Total cash OpEx was moderately higher by ₱600 million in the first quarter, offset by decreases in cost of services, provisions and subsidies resulting in a minimal 1% rise in total OpEx. The company remains focused on extracting operation efficiencies as well as cost management. Consolidated EBITDA for the first three months of 2024 rose 5% to ₱27.3 billion, setting a new record mainly from higher revenues. EBITDA margin stood at 52%. 2024 registered a strong start with telco core income for the quarter of ₱9.3 billion, higher year-on-year by 8% from ₱8.6 billion in 2023, reflecting the impact of higher EBITDA, partly offset by higher financing costs and tax provision.

On a reported basis, PLDT income expanded by 9% to ₱ 9.8 billion, mainly from derivatives and tower sales gains. Note that our share in losses from Maya for the quarter stood at about ₱400 million, lower than last year and consistent with the expectation of Maya’s bottom line breakeven in the last quarter of 2024. PLDT’s balance sheet remains healthy with net debt to EBITDA at the end of the quarter at 2.29x, marginally better than the end of 2023. We remain focused on achieving our target leverage of 2.0x, which we expect to attain with the anticipated increases in EBITDA, reduction in CapEx and with the balance of the tower sales proceeds. Gross debt amounted to ₱257 billion, of which 15% are — 15% are dollar-denominated and 5% unhedged.

Interest costs for the period stood at 4.8% pretax, while the average life of debt is 6.9 years. Next. Total CapEx for the quarter stood at ₱15.7 billion, consisting of network and IT CapEx of ₱14.1 billion and business CapEx of ₱1.6 billion. CapEx intensity stood at 30% for the quarter. Of that ₱33 billion commitment net of advances to major CapEx vendors, the remaining commitment has been reduced to ₱10.3 billion. For 2024, our CapEx guidance is ₱75 billion to ₱78 billion, consistent with our aim to continue to reduce CapEx. The growth in the number of unique 5G devices and 5G data traffic continues in 2024. As mentioned earlier, growing 5G adoption is one of the growth levers of our individual business. Smart was recently awarded 5G Coverage Experience Award by OpenSignal.

I’ll turn you over to Shailesh for Maya.

Unidentified Company Representative: Thank you, Danny. So Maya continues to be at the forefront of driving digital financial services in the Philippines, and we achieved a very strong growth by leveraging our robust ecosystem across both consumers and enterprise and by putting Maya Bank, our digital bank, at the heart of it. Within two years of launch, now Maya Bank is the largest digital bank in the Philippines and this was achieved through a delivery of innovative banking solutions by leveraging our very large and diverse customer base, comprising both various consumers and also various enterprises. Some key figures to share. By the end of March 2024, we had 3.4 million depositors. This was nearly double of the number that we had at the end of quarter one in 2023.

Our deposit balance grew to ₱29 billion which was, again, a substantial increase of over 40% from the same period last year. And importantly, our loan disbursement from the launch of our loans has crossed now the ₱34 billion mark in terms of total loans disbursed. To give some more color across the segments. On the Enterprise side, where we provide end-to-end merchant acquiring and payment processing solutions, we continue to solidify our status as the Philippines payment backbone by enabling large, small, and micro businesses to accept digital payments. To give you some idea of our size and scale, Maya processes 45% of all transactions by account and 49% by value for QRPH, the common QR standard in the Philippines, in the first quarter of 2024.

We have now started providing banking services to the various businesses, allowing merchant partners to open their business deposit account digitally and offering uncollateralized short-term working capital loans to the merchants of up to ₱2 million on the back of the payments business with us. On the next slide, for the Consumer side of the business, we are the pioneers for high engagement banking, which gives customers a high interest rate on the savings account on the back of them doing a lot of their activity on payments, transactions, bills payment and the likes of that, which gives us deep insight into their behavior and goes into then our credit scoring models. Combined with a strong update on our new product, Time Deposit Plus, as I mentioned, we’ve seen a big growth in our depositor base to 3.4 million customers.

As of December 2023, based on the data published by BSP, the Central Bank, Maya accounted for 51% of the depositor base of the digital banks in the Philippines. Now, Maya Credit has been at the forefront of providing fast, convenient, short-term, unsecured loans for customers, and we have introduced new lending products like Personal Loans, which are of longer durations. These loans are now being offered for mobile device financing for Smart customers and to PLDT Home subscribers. We continue to further drive financial inclusion across the Philippines by signing up with — for loan channeling deals with partners who are qualified and certified digital lenders in the Philippines, starting with the fintech lending company, global fintech lending company, Tala, and we will continue to expand other such partnerships.

So overall, we continue to see month-on-month and quarter-on-quarter strong performance and continue to see strong revenue growth. And with the control on expenses, a reduction in the cash burn with the — of getting to positive cash by the end of this year.

Danny Yu: Our outlook for 2024 is one of optimism. We anticipate mid-single digit growth, underpinned by robust increases in data and broadband revenues across the business segments. Supported by the expected top-line growth and continuous focus on operating efficiencies and cost management, we expect EBITDA to grow by mid-single digit as we attempt to expand EBITDA margin beyond the current level. We’re also looking to end 2024 with a telco core north of ₱35 billion. Consistent with our commitment to lower the CapEx headline number and CapEx intensity over time, our CapEx guidance for 2024 is ₱75 billion to ₱78 billion. This includes fresh CapEx for the year and the deliveries of prior year’s commitments, reiterate our commitment to a 60% dividend payout and our continued focus on deleveraging back to our target of 2.0x net debt-to-EBITDA and achieving positive free cash flow after dividends, which we expect by 2026. That ends my report.

A – Melissa Vergel De Dios: [Operator Instructions]. So we’re ready to take your questions. [Operator Instructions] You may also send your questions via e-mail to pldt_ir_center@pldt.com.ph. [Operator Instructions] So we can start with questions that were sent through e-mail. Can you characterize the competitive landscape in the wireless space?

Manuel Pangilinan: I’ll respond to the question on the wireless space and the competitive landscape. We see continued approach for service quality. We can sense that in the growth in the network built, not just from Smart, but from the other place in the industry. Second, there’s also a lot of emphasis now on ensuring that we remain relevant to customers. There are some behavioral shifts that we are seeing with respect to the customer base. We understand that if we look at time, place and occasion of use for mobile data, with the current issues on heat index, employment and all the macroeconomic indicators, we now have to take a look at offers that promote longer validity, probably higher bandwidth and understanding, especially those customers who are probably — difficulties and who are on 15 or 30 payday kind of schedule. So we have to accommodate these requirements of the customers in order to provide not just value, but to ensure better CX over time.

Melissa Vergel De Dios: Ranjan, you may unmute your mic?

Unidentified Analyst: Can you hear me? Hello. Can you hear me?

Melissa Vergel De Dios: Yes, we can hear you, Ranjan.

Unidentified Analyst: Hi, thank you for the presentation. It’s Ranjan from JPMorgan. Two questions from my side. Firstly, on your guidance on telco core income of ₱35 billion or more, you’ve already achieved ₱9.3 billion. So is it possible to tighten the guidance further, like north of ₱35 billion is a pretty wide range. Like how should we be thinking about it? It could be ₱36 billion, ₱37 billion, ₱40 billion? If you can give some more color around this. And secondly, on your guidance of positive free cash flow to dividends in 2025. But if you think of 2024, would you be positive free cash flow before dividends? Thank you.

Danny Yu: For your first question, I think we have to consider the seasonality of the revenues. So for now, we’re still looking at north of ₱35 billion. So what was the second question? Sorry, Ranjan. I didn’t hear that quite clearly.

Melissa Vergel De Dios: Free cash flow?

Manuel Pangilinan: We showed free cash flows in the first quarter. So is it likely…

Unidentified Analyst: So the question is like, can you expect PLDT to be free cash flow positive before dividends in 2024?

Manuel Pangilinan: Maybe I should step in. What’s his name?

Melissa Vergel De Dios: Ranjan.

Manuel Pangilinan: Ranjan with JPMorgan?

Unidentified Analyst: Yes, that’s right.

Manuel Pangilinan: Okay. Well, certainly, mathematically, you’re correct, right? But of course, the world doesn’t work to perfection in terms of mathematics. Clearly, the internal target here is higher than the ₱35 billion that you have indicated. I think we’ll give you a better fix on the numbers once we announce our first half results sometime in late August. But the internal targets are certainly approximate the numbers that you have indicated. So we’re certainly shooting for a number that is higher than ₱35 billion. Indeed, so far, if we could get — if the wireless business maintains the momentum it established since the fourth quarter this last year and the first quarter this year, then that will help. I think we need to get the Home Broadband growing starting this second quarter and the Enterprise as well.

If we could achieve a greater level of those for these three revenue streams for the balance year. Second quarter is actually the best quarters typically for Smart and for the industry. So we’ll certainly we strive to achieve the numbers close enough to the numbers that you have indicated. And yes, the free cash flows, it’s likely that we will produce free cash flows before dividends for the whole year. And if you’re successful in disposing of some interest in the data center, I think that will help to get to that, Ranjan.

Unidentified Analyst: Got it. Thank you.

Melissa Vergel De Dios: Luis [ph]?

Unidentified Analyst: Hi, good afternoon. Thanks for hosting the call and congrats on the results. Three questions from me, please. The first one on the mobile side. Just a bit of color. As you’ve mentioned, the blended ARPU higher 21% year-on-year and only 10% due to usage. Could you remind us, was this driven by subscribers moving up to higher plans? Or did you reduce promotional items, which effectively increased your yield? Second question is on the fixed — on the broadband business side. Just looking at Slide 31, you had net growth because of fixed wireless, which offset the net disconnections at fiber. Is this only migration, essentially internal migration? Or is it essentially, really fixed wireless is driving growth and there’s net disconnections at the fixed broadband side?

And last question is, yes, related to the data center monetization that you’ve seen in the press. If it does push through, would you look to reinvest all of the funds? Or do you think you’ll allocate something for any special dividend or the like?

Danny Yu: Luis, I guess a quick answer to the question on mobile ARPUs. So yes, we have seen over 22% growth in ARPU. And this attributed to two things. We have seen the growth in mobile data revenues. I think that’s already been mentioned earlier. And second, I think we have increased the number of daily active customers who are reloading. So that comes on the back end of, number one, increased 5G devices latched on to the network. We have seen practically a growth of over 60% on latched devices in the last six months, and we will continue to do that. Second, there’s a lot of impetus behind network build and resiliency, and we are ensuring that we are able to reduce LTE congestion where majority of our customers still reside. So I hope that answers your question.

Unidentified Analyst: Yes, it does. Thanks.

Danny Yu: Can you repeat your second question? Sorry, we didn’t get it.

Unidentified Analyst: Yes. On the fixed broadband side on Slide 31, you’re showing net growth in broadband subs, but that’s largely because of fixed wireless offsetting — ex-fixed wireless growth offsetting the fiber disconnections. Is that internal migration between fixed to fixed wireless? Or that’s really a picture of — the real picture?

Jeremiah De La Cruz: Luis, I’ll take that question. Sorry, I’ll put my camera on. I’ll take that question if that’s okay. Firstly, fixed wireless actually saw a 4% growth in its base in the first quarter. So we actually had 14,000 net customers for the fixed wireless business. So that was a growth. Also, from a fiber perspective, our operational reports will actually show a growth also from our fiber business to the tune of about 37,000 net adds, excluding a one-off cleanup that we actually executed on — for a couple of customers that we’re actually treating for an extended period of time. So there’s actually not a drag from fixed wireless to fiber or any specific sort of migration between the two technologies. We are seeing fixed wireless start to improve.

In fact, if you look at quarter one, year-on-year, it’s down to about 30 million down year-on-year. So we’ll start to — as fixed wireless continues to grow its base, we’ll start to see that actually come through on a positive basis. The drag in the Home business is really coming through from our legacy business. So that’s the legacy DSL, VVDSL as well as our voice business.

Unidentified Analyst: Thanks.

Danny Yu: Luis, to your third question. So any proceeds will likely be used to pay off debts. So I don’t think there will be special dividends for now.

Manuel Pangilinan: I think it’s fair to say that the bulk of the proceeds from a sell-down of the data center will go towards debt reduction. There have been commentaries by the ratings agencies, Moody’s and S&P, about the debt or position of PLDT, of course the free cash flow aspects as well. So be mindful of the fact that the bulk of the proceeds from any sell down. So that now — of course, we have shareholders, like you as such I suppose. So we will take a look, depending on the quantum of the cash that we get, the principal consideration debt reduction, if it’s a fair amount of money that we get, cash that we get, then we should be able to [Foreign Language]. Hopefully, we could issue it.

Melissa Vergel De Dios: Yes, Citi. Go ahead.

Danny Yu: Thank you for the question.

Melissa Vergel De Dios: There’s a question in the Q&A box from German de la Paz. They asked for the reason for the huge jump in mobile data traffic in the first quarter.

Danny Yu: Yes. I think we already answered in part earlier. Second, I think I just want to emphasize, aside from installed devices which have grown the big way, particularly for 5G, I think on LTE, we’re also seeing the congestion of LTE users, especially those at the high cap bandwidth utilization. And I think that’s a focus for us to move such high-demand customers to 5G. Very soon, aside from network build, I would like to in coordination with our vendor partners, push for a device upgrade so that we will see a better utilization overall for the network. While we continue to invest in capacity, we also would like to make sure that there’s a corresponding utilization to improve payback.

Melissa Vergel De Dios: I think his second question is already answered. What do you see in terms of ARPU for the mobile segment. If you wanted to add to that, please?

Danny Yu: Yes. We have seen a growth of over 21% for both brands of the Smart Prepaid. And we are confident that this will continue to grow in the next six months.

Melissa Vergel De Dios: Is that okay? Sorry, that was from German. There’s a raised hand from John Te [ph]. John?

Unidentified Analyst: Hi, thanks Melissa. Thank you for the opportunity. Just two quick follow-up questions. First is on broadband. I see on Slide 6 that the churn rate for fiber was actually stable. So it would have implied that because net adds were negative, gross adds for fiber weren’t as much as it was in the second half of last year. So maybe we could provide some color on why is that the case? I’ll stop there first.

Jeremiah De La Cruz: I actually don’t have that particular slide in front of me, but we actually did record a positive net adds for fiber. As I mentioned, net of the onetime cleanup, we actually had 37,000 net adds for the Fiber business. You will see there that churn has actually been stable with that onetime cleanup. However, when you look at reversing the onetime cleanup and you look at the operational or the organic churn that’s actually happening, we have seen an improvement in our churn levels. So we are actually seeing an improvement in our churn levels as customers are actually looking to stay longer. This is something we want to continue to build on as we start to ramp up our rollout and also start to ramp up our new customer acquisitions.

Unidentified Analyst: Thanks, Jeremiah. Just a quick follow-up. I’m just trying to make sense of the revenue growth in the first quarter. So Home Broadband was, as you said, flat. So how — which would you ascribe, yes, is this trend?

Jeremiah De La Cruz: John, so the growth is actually — okay. Sorry, John. To answer your question, the growth that you’re seeing or the growth that we derive from the net adds and the activities are actually being shown in your Fiber business. So the Fiber business grew at a rate of 7% or ₱900 million year-on-year. It’s really being dragged down at the moment with the decline in our copper business or our legacy businesses that relate primarily to copper as well as voice. So if you exclude that out, you actually look at the — just the Fiber business alone, you’ll actually see that is growing at a rate of 7% per year.

Unidentified Analyst: Okay. Thanks. And if I understand it correctly, I guess the drag from the copper business was more than in this quarter than in the second half of last year, just to complete the picture.

Jeremiah De La Cruz: Can you hear me?

Unidentified Analyst: Yes.

Jeremiah De La Cruz: Yes. Yes. There is. I think — sorry, John, I think you’re echoing. Yes, there is the drag. It is reflecting actually more than it has been in the past. And we’ll be looking to actually address that as we start to ramp up and reaccelerate our deployment of our fiber ports and we look to ramp up our new customer acquisitions. In the past, you’ll actually have seen our Fiber business growing at very, very high rates like 20%, 30%, even 40%. So much higher than any other, which actually I guess offset any of the drag that we would have got from our legacy business. But given we are reaccelerating our fiber deployment starting this year, we’ll look to actually get that.

Unidentified Analyst: Okay. Thank you. That’s very clear. Just one very quick follow-up housekeeping question. I see depreciation in the first quarter relatively flat from last year. Is it safe to assume, call it, the sub ₱12 billion per quarter depreciation except 4Q?

Danny Yu: It’s most likely to increase. It’s going to increase slightly towards the latter part of the year, mainly due to newly capitalized assets in our own. So it’s going to be slightly higher than the current level.

Unidentified Analyst: Okay. Thank you very much. And again congrats on the results.

Melissa Vergel De Dios: Thanks, John. There’s a question e-mailed. What is the rationale for Radius acquisition?

Danny Yu: Thank you very much for the question. So essentially, it’s very important to leverage the strategic synergies that we can get from both PLDT Enterprise, PLDT Home and the Radius business. Radius is known to have a very strong enterprise brand. We aim to be able to make operating simpler and secure by design data connectivity option. So we can leverage both PLDT’s network and Radius’ network to provide better experiences for our customers. And it also helps with our CapEx that we don’t need to build in the same place. From a consumer perspective, it’s something that there are best practices in Radius that we can leverage within the Home business. We’re seeking better execution from a strategic synergy perspective, both from a rollout perspective, platforms, they have a prepaid platform that we’re looking to see if we can leverage within the group. And just more of these stories will continue as we get deeper into the Radius engagement.

Manuel Pangilinan: Maybe just to add a bit more color to this thing. The Radius has been, as you know been relying on the — well, it’s a sister company of PLDT because it’s a wholly own subsidiary of Meralco. It’s been a bit of a pain point when its initiatives are independent of, or contrary even to the interest of PLDT. Like at least on CapEx to Radius Fiber, marketing to both Individuals and to Enterprises without coordinating PLDT Enterprise. So it’s probably best that we get coordinated on the Home Broadband front. As George [ph] indicated, Radius is quite — they have good fiber network in VisMin and Metro Manila, in certain parts of the franchise areas of Meralco and under to it, a very strong enterprise base. So it’s best we saw that from a group perspective that they stay coordinated, that they get coordinated on the enterprise front.

Retention losses on the consumer front on the Individuals on Homes, Homes itself, not the Enterprise side in that. What we want to do is to migrate the Home customers portfolio Radius to the Home Broadband of PLDT because, in any event, Homes — sorry, Radius is losing money on the Home front. That shouldn’t happen. We completed the investment last week. And I think [indiscernible] somewhat from Enterprise to help manage the Radius business, stay coordinated in terms of approaching the Home Broadband market, both Individuals — Individual Homes and the Enterprise.

Melissa Vergel De Dios: Another question has been e-mailed. Any color that you can give on the competitive landscape for the Home business?

Jeremiah De La Cruz: So the landscape is, I guess, remains to be quite competitive. I think everybody has been looking at the different moves from competition, whether they’re the main ones or also from some of the informal competition from P2P players, right? There’s definitely pressure when you look at it from price points coming down, looking at increased speeds at certain data allowances and also the introduction of prepaid. So it is a highly competitive environment. We’re being quite careful in the way that we approach the market. We’ve been able to hold our ARPUs quite high now over a period of high level of commoditization, but we will start to look at how we address the different segments of the market. There’s two ways to grow.

Actually, there’s three ways to grow. One is you expand your base and your network. The second one is you switch customers from competitive networks. And the third one is actually attacking different segments within your existing footprint. So we’ll be looking to actually have an attack on all three fronts this year. And so we’ll be very careful with the way that we do that so that it is value accretive and something that doesn’t destroy value and actually cannibalize our base.

Melissa Vergel De Dios: Any updates on the DC sale, data center.

Manuel Pangilinan: Well, I think it’s fair to state that the discussions with several parties that have expressed interest in investing in our data centers, as far as the whole spectrum, right, the principal point of discussion, we’ve had this with NTT DOCOMO was very keen to invest in the data centers. But on — and they gave us sort of values that we expect to fetch for the data centers, which is north of $1 billion. And the — however, the condition that they wanted to have is that they would have majority, the ability to consolidate data centers. And that sort of stuff in our control, because we think that it has a good future for PLDT to give up control, and a significant portion of equity interest in the data centers is not to our interest.

And we told DOCOMO that they are investors in PLDT so they should be able to accommodate, that they see the best interest of PLDT after all the shareholders has said. Besides, I think if we do away with the consolidation of data centers, we lose approximately ₱5 billion or ₱6 billion of revenues when we do divest majority interest in data centers. And that’s — that requires more explaining with you guys, right, why did our revenues drop by ₱5 billion or ₱6 billion. We’re trying to avoid that. So we’ve talked to other private equity funds who may be willing to take a significant minority interest. The values that we received are less than what DOCOMO are prepared to pay. So we have to ponder very — so early about whether that’s something we would like to have or to take an alternative form, alternative approach by adopting the REIT.

That’s something, I think, they’re quite serious about because that’s fairly close enough to the total network calibration and accommodates the interest of PLDT in terms of being able to continue to consolidate, continue to manage the data centers and expand it the way we see it. And we would hope to get a party that can add value added to the revenue line and to the expansion of the data centers. We’re learning about how the REIT operates and that we know that for the value of the REIT to grow in the future, that we do have to expand the business of data centers. So that’s fine with us, which means that we are in many ways persuaded to tap an expansive mode in our data center business, which we like, right? So we hope that we could tell you towards the end of June which route we’ll take.

So those are the three available possibilities or options for us to generate cash flow of divestment. They’re somewhere in the interest of this.

Melissa Vergel De Dios: There’s a question on, any updates on the Digico? [Technical Difficulty]

Marilyn Victorio-Aquino: On the Digico front, we’re pleased that we have been moving along fairly. A lot of our focus has really been around the data portion of the Group, the MVP Group. So we have managed to already look into — and we’re very pleased with the type of data that we’re seeing. So we’ve managed to stand up what we call data sandboxes. These are like mini experience centers for the Telco, for Meralco as well as for the tollways. Next in line now is trying to figure out a way on how we can cross-pollinate the data, right? And the thesis is once we can do this, then it will actually showcase new insights into our customer base. These insights now should allow us to service them better, should allow us to come up with new products in the line.

Melissa Vergel De Dios: Is there any other questions? [Operator Instructions] There’s a question from Stephen Oliveros [ph]. How much of the tower sale deals are we looking at for this year?

Danny Yu: Okay. We already received around ₱84 billion out of the total ₱98 billion. So we have yet to transfer around 1,088 towers. So if we get to sell this or transfer this, then that’s around ₱14 billion, if we get to transfer all this year.

Melissa Vergel De Dios: Any other questions? There are no further questions, and I’ll turn the floor over back to Mr. Pangilinan for his closing remarks.

Manuel Pangilinan: Thank you for being with us. Thank you to all of you for joining us this afternoon, listening to our presentation. It’s a pleasure to answer your questions. We look forward to talking to you again towards the end of August, right, for the first half results. So PLDT can give you a better fix, full-year numbers and special interest.

Melissa Vergel De Dios: Thank you. Thank you for joining us today. Have a good afternoon.