PLDT Inc.

Good afternoon and thank you for joining us today to discuss the company's financial and operating results for the first quarter of 2022. A copy of today's presentation is posted on our website. For those who have not been able 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 the event will be available on our website after the call. For today's presentation, we have with us our Chairman Manny Pangilinan, our President and CEO, Mr. Al Panlilio, Ms. Annabelle Limchua, Chief Finance Officer and Chief Risk Officer, Mr. Shailesh Vaidwan, President of Voyager Innovations at Paymaya Philippines, as well as other members of the PLDT Management Team. At this point, let me turn the floor over to Mr. Panlilio to begin the presentation.

Thank you, Melissa. Good afternoon and thank you for joining us today. Let me start by saying that I'm very proud to show you the performance for the first quarter 2022. We are showing a telco core net income of 8.2 billion, which is, I think, if I'm not mistaken, a quarterly high since 2015. So this is 9% higher than the same period last year, or 700 million higher than the 7.5 of last year. In terms of net service revenues, all-time high for net service revenues of 46.4 billion, which is a 3% growth versus the same period last year, or 1.5 billion pesos increase. And these are driven by the following segments, for sure. The one driving the major growth, the major driver for revenue growth is home at 13.6 billion, which is also a quarterly high for home. 25% increase in revenues for 2.7 billion. Wireless is down versus last year at 20.4 amidst the challenges of the lockdowns and the debt issues that flowed through the first quarter this year. But we are seeing a turnaround in the second quarter and the second quarter should be an improvement from the first quarter moving forward as we're seeing new programs coming in and our top-ups are Thank you very much. We are actually down 3% versus last year so we're also managing our expenses well in the first quarter and we have to continue to do so as we try to increase revenues lower expenses and then with the year hopefully achieve a positive free cash flow for EBITDA also an all-time high at 25.5 billion or 10% growth or 2.2 billion in revenue terms. Next page please. So let me align my presentation to our five strategic pillars that we have launched when we started our company transformation early part of this year. So the first pillar is really growing profitable new growth. So I just want to highlight certain revenue growth drivers for the quarter. For sure, on the home side, it's the increase of fiber net, fiber customers for the first quarter. We added 213,000 net ads in the first quarter. Below the third and fourth quarter numbers, but slightly above first quarter numbers as compared to last year. And we will continue to ramp this up. This has been also affected by the ODETT. As our crews have been refocused to restoration early part of the first quarter. Having said that, at the same time during this quarter, we've actually put in new ports. We put in 480,000 new ports to total 6.25 million ports. For mobile, we are seeing good pickup on mobile data usage, now at 8.5 GB per customer average monthly usage. We're across the 41 million data users also on wireless, and we're seeing also 837% 5G average daily usage on devices to 1.3 million customers running on 5G. And for our enterprise, the two growth pillars of our business beyond connectivity, obviously, are the cloud licenses, which increased around 6%, and data center, as we focus on this side of the business. And as we actually launched, we broke ground in the first quarter on 11 data, hyperscaler data center in Santa Rosa, Laguna. This will continue to grow and we will continue to make sure that we're able to address demand. So total data revenues for the quarter is now up to 79% compared to 76% same period last year. Next page please. So the second pillar is customer simplicity. We are continually making strides. Thank you very much. and we also deployed 76 Paybox kiosks for hassle-free payments in the stores as we are trying to eliminate the low-value transactions in the stores and focus on high-value transactions in our physical stores. But we are also moving payments to other platforms like Maya or Paymaya. So we want to establish a clear high-impact KPI as we continue to push for overall The third pillar is really making sure that we are industry-leading in terms of operations and having excellent operations as part of our major thrust in our transformation listed on the screen are the key initiatives we want to focus on and we feel this will really move the needle in terms of changing our operating model as we move forward. Focus on end-to-end installation, repair and maintenance, complex management, challenge strategy, and simplification for operating model, and many, many more. Next page, please. The fourth pillar is really a people-led Aurora transformation that shapes the new culture of PLDT. The best place to work is the ambition for PLDT Smart as we embrace new ways of working. Multiple change management programs launched to drive company transformation to make ourselves more agile. Thank you very much. The last strategic pillar for us is really doing business responsibly. Ensuring sustainable practices across network and operations are established. The Hyperscaler Data Center that we launched In Santa Rosa is built with sustainability in mind. So we have partnered actually with the London Pace Red Engineering to make sure that the beautiful Santa Rosa data center is not only energy efficient, it has also sustainable practices that we will implement in that data center. We continue also our fiber connection in Central Philippines and this improves network resilience and provide alternate routes for data traffic in event of any fiber breaks. And lastly, and again, this is just three of many initiatives in this space where we're tapping renewable energy for our sites where we've actually installed solar panels in Cebu and Iloilo offices and we will propagate this even more nationwide. Next page. So these five pillars are really on top of being delivered by world-class service enabled with next-level technology. We're also happy to report that OpenSignal has acknowledged a smart operator to beat in the field games as we topped 11 awards for speed and experience in Q1 2022. And this will be a continued focus to make sure that we continue to lead in customer experience and mobile space. We also continue to migrate our copper subscribers to fiber and we want to make sure that we're able to offer them the best service that we can offer. So we're ensuring that the migration is done seamlessly. And as I said, we want to continue to dominate the data center space And we've actually, again, launched a groundbreaking video on the Rosa this quarter, and the hope is for us to complete that by the latter part of next year as we continue to address the demand in this space and continue to push our businesses with hyperscalers. Next page. And lastly, I think it's really innovations to benefit all Filipinos during this quarter. I'm sure you've heard the past. We had a separate announcement about a couple of weeks ago. on the pioneering initiative on tower sharing. And what we have done is we've sold 5,900 of our towers, passive equipment for 77 billion. And this is a pioneering initiative that undertakes and supports the DICT's goal of improving tower density, which will lead to not only significant efficiencies in our In our operations and connectivity across the Philippines, what better customer experience at the end of the day. And last Friday, I'm happy to report that we rebranded, we relaunched Paymaya to Maya. It's everything in a bank and really the all-in-one money platform that's a seamless integrated digital banking services platform powered by Maya Bank. that offers savings and credit, the e-wallet obviously of Paymaya, and other features like cryptocurrency, micro-investments, and insurance. And on top of that would be the agent networks that has been built by Paymaya over the past several years. So at this point, I'd like to pass it on to Annabel for a more detailed report on the financials. Thank you.

Thank you, Al. So let me just recap again what Al had showed earlier in terms of our first quarter Overall top line results. So service revenues came in at 46.4 billion. That's a record high and a 3% increase year on year over the first quarter of last year. Home and enterprise led the growth with home at 13.6 billion or 25% higher year on year. In fact, when you look at the fiber only revenues within home, that's about 80% of the total Thank you very much. Thank you. Just to show the way our revenue has been building up over the last nine quarters, you'll see that from a 41.5 billion starting point in the first quarter of 2020, we now have registered 46.4 billion of revenues. And the increase also from fourth quarter to first quarter was 0.2 billion versus what usually happened like last year. for the first quarter dip versus the fourth. We didn't have that this year. So all told, the 3% increase resulted in an all-time high of 46.4 billion for your quarter. Next chart, please. So for home business, just to also show the growth trajectory over the same timeframe. So you'll see that from a 9.2 billion quarter base in the first quarter of 2020, We're now at 13.6 billion, having added subscribers last year of over 1.1 million, and now another 213,000 of FiberNet ads in the first quarter of the year. We continue to build out also our network, adding 480,000 fiber ports during the quarter, and our full-year target is to build an additional 1.7 million fiber ports. We've seen good ARPUs of about 1,300, for Fiber customers. And we believe that the potential for fiber growth continues to be there as the total market in the country has only a penetration of circa 20% for home fiber broadband. So the take-up and demand continues to be quite strong. Next chart, please. For individuals, More headwinds in this particular segment of the business from the impact of competition as well as the pandemic and now rising inflationary pressures. Nonetheless, we do see a strong patronage of mobile data usage. We have 41.6 million data users using an average of about 8.5 gigabytes a month and adding to our mobile data traffic of 30%. And as we push out offers for free TikTok, Giga Arena, we continue to expect data usage to be increasing. Next chart, please. For enterprise, solid performance of 11.6 billion or 7% year-on-year growth, increasing adoption of cloud data center racks, service, and of course, Thank you very much. Thank you very much. Even the lack of travel and roaming, not back to the levels where they were. But having said that, the international business is now a relatively smaller part of our overall business. Next chart. So overall, when you look at it from a cut between data and non-data, so data broadband clearly drives the growth at an 8% increase in the first quarter versus last year. and now contributing 79% to the total revenues for the period. So fast approaching the 80% mark. Next chart. So within the data broadband revenue pie, we do have a strong performance across mobile, home broadband, corporate data and ICT as outlined in this chart. And as you can see here also, the SMS revenues are down to 3% of total and then ILD now account for only 2% of total revenue. So clearly has become a data broadband business for us. Next chart please. In terms of subscribers, we have total 78.1 million customers across mobile, broadband and fixed voice. Strongest growth is in the broadband side. We now have 4.1 million total broadband across fixed and fixed wireless. with fix of 3.1 million, out of which 2.6 million are fiber customers, where we have added 213,000 during the quarter. And then fixed wireless makes up the balance of another 946,000 extra. The broadband sub-based, as I indicated, or even I indicated earlier, we added 213,000 during the first quarter, so that is slightly ahead of same quarter Thank you very much. Thank you. Combined growths, installs, and migrations still has been over 100,000 in terms of the monthly take-up. But we are pushing for higher numbers for this during the balance of the year. Next chart. On a P&L basis, so the growth in service revenues led to an EBITDA increase of 10% year-on-year. So we also have an all-time high EBITDA. Our cash OPEX subsidies and provisions was well managed. In fact, it's down 3% year-on-year at the back of lower need for provisions during the period. EBIT is also up 12%, and then telco core income of 8.2 billion is up 9% versus the 7.5 billion level registered in prior year. Next chart. Just to recap, the higher revenues coupled with lower provisions, lower subsidies, and allowed us to report a 10% increase in EBITDA. And then that increase in EBITDA drove the increase in TelcoCorp income and was able to offset the higher depreciation and financing costs that we have. And as I said, 8.2 is the highest quarter since 2015 for TelcoCorp. Next chart. It's kind of showing a bit the impact of a debt. So the numbers that we show in terms of the 25.5 billion of EBITDA does have 600 extra charge from repairs and other debt-related expenses that should not repeat itself in the subsequent quarters, although we would have another probably 200 million of repairs cost in the month of April from the debt. But with that, though, just kind of normalizing for a debt, Our EBITDA would actually have been higher by 12% or 26.1 billion in the first quarter had that not happened. On the customer front, services have been restored for both fixed and wireless in the affected area. We also show here a summary of the total impact from that super typhoon. The items we booked in the fourth quarter added up with the first quarter did have a negative effect of about 1.8 billion pre-tax and 1.38 billion post-tax. Next chart, please. So just to, again, show the way the EBITDA numbers have developed, seven consecutive quarters of growth leading to the 25.5 billion record all-time high for EBITDA. 53% EBITDA margin compared to 51% last year. Next, the telco core income of 8.2 for the first quarter compared to the 7.5 billion in the first quarter last year. Next, please. Just in terms of the full statutory income, it was 9.1 billion or 3.3 billion higher than 5.8 of prior year. So just to highlight some of the differences that we have between the telco income and the reported number, first off would be the share, our share in the Voyager performance. Voyager continues to be on a cash burn, so we have that. But there are other big one of items here. The first one here is the 7.8 billion Thank you very much. that signed up for this program. So they get a premium for retiring earlier than their retirement age. So there is an extra $4.8 billion challenge that will occur as part of that premium cost. But the reduction eventually in the compound benefits associated with these people would be about $2.4 billion. So then in two years' time, The other item that we want to highlight is the preferred shares redemption liability that we had reversed. If you may recall, PLDT previously had a subscriber investment plan where if you signed up for a fixed line, you do have to subscribe to certain preferred shares as part of your upfront payment. We had stopped that practice some time ago and then in 2011, the PLDT Board approved the redemption of all the outstanding preferred shares. We set up a trust fund in January of 2012 to cover the redemption of the shares and any unclaimed dividends in the amount of 8.2 billion. Ten years hence, we have the liability prescribed. We still have 7.8 billion in the trust fund that reverted back to the company, so there is A one-time benefit to us from the termination or prescription of that liability. So have served out the 10 years period for this. So that's 7.8 billion that we considered as part of our reported numbers, but not part of the telco core income. And we also did pay income tax on this one. Next chart. Just quickly on the balance sheet side. 5 billion U.S. dollars of gross debt, 4.4 billion net of our cash balance, representing a net debt to be the ratio of 2.33. Next, average interest cost of about 4% pre-tax, average life of our debt about seven years. Now, there is a prospect of prepaying debts maturing in 2023 and some even from 2024 using the proceeds from our tower sale transaction. that we would hope to do the first closing in second quarter and then subsequent closing in the second half of the year. So that would allow us to reduce our debts below two times after we are able to monetize our hours. Next chart. CAPEX. Our CAPEX for the first quarter was 15.8 billion. 3.3 billion of that was in direct support of our install requirements for the new fiber customers that we connected. About 11.6 was really put behind the network to allow our network to remain superior over competition. So with the 15.8 billion in quarter one, we do expect to wrap it up in subsequent quarters, and we're looking now at about 85 billion in terms of our CapEx guidance for 2020. Not quite as high as our 89 million last year, but also with the increase in our EBITDA, we should have a net positive differential in our EBITDA and our CAPEX expectations. So I think the tower sale transaction, we did explain this in quite full some detail Thank you very much. and then subsequent ones, the tranches will be done in the third and fourth quarters of the year. Next chart, please. So just highlights in terms of our network, the close pass is about 15.5 million as of the end of March with 6.25 million actual ports activated, inclusive the 480,000 that we added during the first quarter. And as indicated, we are aiming to close to 1.7 million, so we'll probably be adding at least 1.2 million more ports in the course of the next few quarters. And then fiber footprint has increased 8% to 803,000 cable kilometers with a presence of 62% of the country. Then total base station count, 76,600. That includes 7,300 for 5G. And we covered a population coverage of about 66% for 5G now, and 97% if you combine it with the 3G and 4G. Next chart, please. So some highlights for 5G. We are seeing about 1.58 billion devices active at 5G, representing about 3% of our active LATCH devices. Traffic continues to grow as we continue to build the 5G network and our speeds for 5G clearly ahead of the ones observed for competition. So with that, I think we'll hand over first to SV Shailesh, for a few comments about the PayMaya business.

Thank you, Annabel. Is the camera on? Thanks. So for the last quarter, even as we were getting ready, and I'll talk about the Maya bank launch and the whole revamp of our PayMaya, we were building our core businesses on the consumer side of the house, which is where we serve people through our e-wallet or app and also an on-ground network. We expanded the number of registered consumers to 47 million. On the payment side of the business for the enterprise solution, which is our acquiring business, where we process Visa, MasterCard, domestic debit, QR, all kinds of payments. We expanded that network, continue to be the number one in terms of key industries, everyday industries in the Philippines and the points of acceptance where we enable payments to be done by MSMEs, SMEs, large enterprises in payment gateways and also omnichannel and many more. Thank you very much. Money Platform, both for consumers and an all-in-one money platform for the enterprises. And that was done on the back of revamping all our payments, introducing new investment categories like crypto, adding insurance, and of course, launching Maya Bank, which enabled us to offer deposit-taking and also credit services. So I'll give you a little more color on the next slide, please. So in terms of... Next slide. Thank you. So in terms of completely revamping and from a consumer perspective, creating the all-in-one money app, we absolutely changed the whole payment app that was there, PayMaya. It is now Maya. This went beyond just a change in branding. It was a complete overhaul of our customer experience. And on top of that, with the introduction and launch of Maya Bank, We introduced new products within the same app for customers to seamlessly and conveniently save money, get access to a loan, and of course we added on new services like crypto trading, which helps them with investments and insurance. And even as we were rolling this out on the consumer side, similarly on the enterprise side, we have rebranded that to Maya Business. So MSME and SMEs who are today using our app for payments can now start saving and giving us deposits, and we are beginning to provide and test working capital loans to the same segment. This rollout happened as we spoke, and just on 29th of April, last Friday, and to just give some context in the Philippines, the penetration of banking accounts, so adult Filipinos, only 32% have a basic bank account. So the opportunity over here to drive financial inclusion is massive, and that's where we're focused. Similarly, on the lending side, to give you a statistic, the penetration of credit cards is 3% in the Philippines. So there is a huge unmet need for credit to help both SMEs, MSMEs, and consumers to grow with financial access to formal credit. While we were doing this relaunch, we've got, at this stage, we have rolled it out with what we call the Early Access Program, We are inviting people to come and participate as part of the journey of us co-creating the app. We were extremely encouraged when we got in two days more than 500,000 consumers signing up to be a part of the early access program. We slowly started releasing them and giving them access to the bank products with the idea being that in about four weeks' time, we should be able to roll the services of the bank out to the Filipino population at large. And while we're working on this, we also are very pleased to announce, the next slide please, our closure of the last round of funding that we did, our Series C funding, where we brought in external investors, SIG, EDBI from Singapore, and First Pacific Company, and at evaluation, post money of 1.4 billion. PLDT, of course, our largest shareholder, participated with the largest contribution of 62 million, with ownership of 36.8, and the other existing shareholders participated in the round with KKR, Tencent, and IFC. At this stage, we're well-funded. We are focused on growing the Maya all-in-one, both for consumers and for SME, MSMEs, by adding on new services and functionalities. I'm extremely delighted with the reception and feedback that we've gotten so far since we put this out there. with the population to start testing our services. With that, I'm going to hand it over to Chairman.

Okay. Just dealing with the outlook and guidance numbers for the year, for the full year. Service revenue growth is expected to be in the mid-single digit growth range with home broadband leading the way in terms of revenue momentum. We expect revenue growth for the home broadband to be In double digits for the year and in absolute quantum value higher than the growth in 2021. Enterprise is expected to register stronger performance underpinned by ICT and data center for the course of the year. I believe that would be high single digit growth for the enterprise business and the wireless continue to face challenges. but I believe it will be flattish for the full year 2022 to 2021. Telco Hort income is expected to be at 33 billion for the full year, flowing from better cost management, principally the MRP that Anabel referred to earlier, and increased revenue and better EBITDA in the course of the year. CapEx, first of all, we're raising estimates from the 76 to 80 billion range. We gave out in the early part of this year to 85 billion owing to requirements of the business and the exigencies of competition. And of course, the CapEx, additional CapEx spent for towers, which are the subject of the sale in Eastpac recently announced. But nonetheless, after peak CapEx in 2021, Thank you very much. EBITDA to CAPEX is 1.3 times and I think we expect to maintain that level of surplus of EBITDA to CAPEX in the coming years. So it's important for us to deliver free cash flows over the medium term. The cash position of the company will be In the first instance, with the preferred shares return that Annabel mentioned, which have already been received to the tune of $7.8 billion. And of course, the $7 billion proceeds of the tower sale, which will be received in the course of the year, starting end of May and the third and fourth quarters. So the ultimate goal is to leverage some two times net debt to EBITDA. and, of course, to pay a special dividend when we announce our interim results sometime in August, late August or early September this year. That ends our time. That's enough.

We're now ready to take your questions. You might type your questions in the Q&A box in the upper right-hand side of the screen. You may also click the raise hand button and just wait for us to call your name before you unmute your microphone. You may also send your questions via email to igtecepida at pldt.gov.ph. Please indicate your name and company name so we can get back to you for any additional information you need. First question is from Arthur Pineda. Arthur, you may unmute your mic. Arthur. We can go to the second question. Hussaini, you have your hand raised. You can unmute your mic now.

Yeah, sure. Thanks. Thanks, everyone. Good afternoon. Thanks for the opportunity. I just have multiple questions. First is on mobile competition. So is it possible to guide us that, you know, the decline in mobile revenues, what portion of it is linked to audit? And as we are seeing some recovery in that space, so just want to understand the level of recovery. Are we Already pre-COVID level or will it take time for us to reach there? And then what are the factors which are kind of holding it back? Is it competition or is it just the general purchasing power into inflation or things like that? Discussion number one. The second question is on the CapEx side. Now the increasing capex which to an extent is linked to towers, hills and hills back. So PLDT has to reinforce those towers before transferring it to the vendors, tower vendors or tower cores. So you just want to understand where the incremental capex is going on the tower side. And finally on the PMI allowances, I see that the losses have increased, so I just want to understand that is the cash bond linked to the launch of Maya Bank or is it linked to the, you know, asset of the app and things like that? So what is driving the incremental cash bond on the PayMias? Thank you.

I guess I'll have the first question first, but I think it's Jane also on the line. Just to answer your question, I think there are several factors at the mobility opening up now, lockdowns have eased up, so hopefully there's no more any virus or any pandemic that will force the economy to lockdown again. Yes, there is an affordability issue that we are seeing, plus of course competition. We are not yet at pre-COVID levels, but I think we're seeing the next quarter to be closer to the second quarter of last year. So that's something that I think we're a bit positive about, that there is a change in trend in terms of the mobile space. Jane, you might want to add a few things, and I think the programs that you implemented this first quarter.

Yes, yes, sir. That's right. Our revenues in the mobile wireless space hasn't quite reached pre-COVID levels. As you know, we were challenged in the second half of 2021 as well as the lockdowns were extended. In fact, there was a hard lockdown in August and then there was this anticipated impact of Odette. but we're very encouraged with the signs of growth that we are seeing beginning middle of January and on a month-on-month basis our top-ups are growing, our subscriber activity is actually growing, our average basket size is growing and that's really a combination of the reopening of the economy which was implemented in the third to fourth quarter of February as well as the programs that we had implemented early on into the year, in fact beginning the second week of January. This includes programs like Gigapower, and currently we're running Free Tech Talk for All. And the objective of these programs is not only to differentiate our service amidst heavier competition from both Globe and the Third Layer, but also to really stretch our pool from our most valued customers.

Thank you.

This is very helpful. And just a follow-up question on the effect. So how would you characterize competition? Has the competition remained stable vis-a-vis the previous quarters, or has it kind of elevated or escalated from the other operators?

Sorry if I made my answer. It's largely been rational, I think, in terms of pricing. Clearly, the DITO in particular's product proposition is really anchored on price, but we've been able to hold off responding to that because of, as I said, the many values that we give our subscribers. So it's not been as bad as, you know, it could be worse than what it is now. The bigger challenge we are seeing actually with the entry of a 30-year is the increasing levels of dual SIM in our base. So we've seen that doubling from around 13% to closer to 25%. So when people have more than one SIM, then they kind of spread their usage across two SIMs, right? So the goal is to make sure that SMART becomes the primary SIM.

Should I answer on the tower?

Yeah, go ahead, Bjorn.

Yeah, there is no incremental spend for the towers. It's an acceleration because most of our towers were in a permanent upgrade because of 5G and so on. And in those towers which we sell, we have to complete that work a bit earlier than we thought. For example, tower replacements. So that moves a bit of CapEx from next year to this year. But there's no additional spend because of the sales.

The investment has been in three areas. First of all, on the core payments business, on the consumer and enterprise side, we made sure that we set the unit economics from solidly positive. So the investment is for acquisition, which has a payback period, of course. So we're investing in acquisition and growing on the payment side. Then there are new services that we're introducing. So for investment, we spoke about crypto and we spoke about insurances. These give us margins from the get-go. However, there is a one-time cost as we set these up, as we integrate these services. And the third bucket really is the Maya Bank. As you can appreciate the undertaking of a launch of a complete traditional bank that we have done. So while a lot of our expenses are based on consumption-based, et cetera, but there is a fair bit of expenditure to get the bank launched. We are fortunate that because of our Thank you very much. Great.

Arthur's not able to unmute his mic, so he sent his questions in. The first of his questions is regarding CapEx. What is driving the $5 to $9 billion increase in CapEx? How do you split this between network CapEx, data center, and tower-related CapEx? And based on this, the $77 billion proceeds from the tower sales is actually lower if we net this out. Is that how we should look at it?

The answer is yes. The effect of retrofitting those towers to make it saleable should be notionally deducted from the gross amount of 77.

So when we showed the premium to book value and we showed that the book value was 23 billion, that is inclusive already of the additional topics that we are booking this year. So it's still 77 versus...

Why aren't you guiding up more materially on the profit expectations? Given the $3 billion implied annual net savings from the deal, shouldn't we see a recurring profit?

I guess it's a timing question of when we will, the 3 billion is a full year impact assuming 100% done, right? So given that we, you know, we'll have some of it, I guess, flow through the year, but it's a little unpredictable in terms of when the final closing will be and how many months in fact.

And then this third question, on mobile momentum, are we seeing any improvements in the second quarter with the market reopening post-pandemic? Are we seeing any election-related spending uplift in the second quarter? Or is this phenomenon no longer applicable given the shift into data?

Well, I think we are indeed seeing growth in the second quarter. We expect the second quarter to be higher than the first quarter. We're not seeing much of the election spend this year. I mean, a lot of it is just on social media. It's all just on data. So not a major spike. I asked the question to the team as early as early this year, and we don't expect any major spikes during the election.

And then Arthur's last question. What is the outlook on mobile data noting that the first quarter revenues are flat year on year? When are you expecting this to increase?

Jane?

Well, we continue to push the adoption of data among our subscribers. We're actually at the 80%. The objective is to take the remaining 20% to using data. We are promoting a lot of usage offers. We call them SKUs to promote data use. Right now, our biggest campaign, which is Free TikTok for All, actually attempts to stretch the data spend of customers from the entry price point of 50 pesos all the way up to 99 pesos. So, yes, penetration for data has actually increased in the past several quarters. So the objective now is to actually squeeze value from customers by making them spend more through the values that we put in our products.

Next is a question on data center. Can you discuss the expectations of your new data center? When should we start seeing material contributions from?

I think Jojo's there, but in terms of a timetable, the completion of the last of the 11 data center will not, you know, the target is sometime for 2023. So we expect, hopefully, revenues to stream in 2024. But Jojo, you might want to add more details.

So just to quickly add, so from the Vitra Santa Rosa perspective, the revenues from that will come in late 2023. But we're also expanding on our current set of 10 data centers. So we expect our growth rate from a data center revenue perspective, currently at 29% in Q1, to continue to be at similar, if not higher levels in the next few quarters.

There's a question from Rachel Lynn of Maybank. In full year 21, Voyager registered $2.3 billion in equity losses. With $700 million in equity losses in the first quarter, do you expect the same level of losses this year? And when do you expect to reach profitability?

So as I mentioned earlier, in 2022, given that we have a major undertaking of the launch of the bank, we were able to do it very fast under six months, pretty much under six months, just over six months after getting the BSP license on September 20th, on the back of leveraging a lot of the expertise that we have on the payment side and using that synergy across both the businesses. However, we would need to invest through 2022 at levels similar or maybe slightly elevated versus 2021. As we roll out the new products and services through the course of 2023 is when we should start seeing, we start moving towards the end of 2023 towards a positive potential break even.

and lastly from Rachel, can you share the percentage of fiber sums over total fixed line sums? When do you expect migration completion?

Jeremiah?

Sure. So I'll answer the second question first. We have a plan to actually migrate all of our ADSL customers to fiber. That's something that we've been working on since last year. And we anticipate actually all of our data-based ADSL customers to be migrated over by the end of Q2. We do have some customers that are actually using voice-only services, which will actually then be the next focus for us happening Q3. That's not the end of our copper customers. We still do actually have quite a large VVDSL base. That's where we'll turn our next focus onto, which is actually migrating our VVDSL customer base over to our fiber network, which will go into 2023. But as a percentage, we have approximately 400,000 customers on our copper network of a total 3.1 million total base.

Hosseini, you have your hand raised again.

Yeah, thanks for the opportunity once again. So I have a couple of questions. One is on the margins and there has been quite a decent, you know, reduction in the provisions. So I just want to understand, is that level sustainable or is it just there was one kind of a reversal in the first quarter? And the second question is on the data center. Yes, we are, you know, kind of increasing the revenues on the existing data centers. Just want to understand from where those revenues are coming. Is it coming from the enterprises or mostly coming from the hyperscalers? Thank you.

At the provisions, I guess we do follow the expected credit loss approach. which does take into account actual experience in terms of collections, but also forward-looking items with respect to macroeconomic factors. So understandably, we have the chance to reduce it a bit because of provisions we have ramped up in the last two years during the pandemic period. So we didn't need to raise our provisions as much When we assess it during quarter one. So now, of course, it's a continuing assessment. What we do need to look out for in the subsequent quarters is really the impact of the higher inflation and other macroeconomic developments vis-a-vis the ability of our customers to continue their payments.

On your second question on data to enter, Jojo,

Go ahead, Joe. So we see, if I understood the question correctly, so we see growth in both segments of customers from a data center perspective. So we're seeing growth from enterprises and we're seeing growth from the hyperscalers. Although from a momentum perspective, we're seeing most of the growth, a larger part of the growth is actually coming from the hyperscalers.

Thank you very much. Thank you. The next question is from Hip Nguyen. You may unmute your mic.

Thanks for taking my questions. I have two questions.

First one is on Ditto. Can you make any educated guess on how much market share that Ditto is having at the moment? And then how is it compared with, let's say, one year ago? The second question is on the mobile data revenue, right? It used to grow at about 20 plus percent a year, you know, before 2021 and slowed down to 6% last year and then become, you know, flat this quarter. So I wonder how much is that, you know, is driven by competition and how much is driven by basically the consumer power. So if we think like in the normalized situation, let's say by next year, What kind of assumption that we should make for mobile data revenue growth? Thank you.

I don't think D2 has released official figures, but what we do monitor are the consumer proxies, for example, FB Insights, right? And with FB Insights, we are seeing D2 shares to be around 5% right now. I think they ended last year with around 2.5 to 3%. So we are still the dominant player as far as the FB Insights, FB user base is concerned. But that's the kind of growth that we are seeing from D2. And in terms of data usage, really, if you remember sometime third quarter of last year, we actually had to compete in the market by launching our unlimited data propositions, initially priced at 499. We had since repriced that to 599 because We had to compete against DITO and GOMO's similarly priced product, which is Unlimited 499. And that has actually largely been the reason for this significant growth in our mobile broadband space. And as you can expect, because it's unlimited, then the data utilization will likewise increase. We have also been pushing long-validity, high-priced offers. in our usage portfolio and that means more data allocation within those products. So the objective at the end of the day is to be able to stretch our low-divided value customers. Still a significant portion of our base, around 60 to 70% have top-ups lower than 100 pesos, right? And so the objective is for us over time to migrate them to to higher-priced, higher-margin data offers.

Thank you. Just two small follow-ups. The 2.5% market share that Mabito had end of last year, is that for fourth quarter or for the year last year?

That's a big question. Sorry.

Yeah, and then, you know, and then the second one is that, you know, once the new base is set for the mobile data revenue, right, and what kind of, you know, growth assumption we should make, let's say, for next year, is it going to resume the double-digit growth or the mid-single-digit going to be the new north? Thanks.

For the first question, the first figure is as of end 2021, right? And for the second question, I'm very bullish about Thank you very much.

I see. So from the data, basically, D2 probably gained about 2.5% market share in the matter of the last one quarter.

Yes. That's unofficial, right? It's what we see from any companies.

I see. Okay. Thank you so much.

Right. There are questions sent in by Germán de la Paz of Abacus. Aside from Odette, should we attribute the slowdown in home net ads in the first quarter to growing competition?

Okay. Actually, what we see is seasonally, quarter one is actually a slower period for us. A couple of things that actually happened during quarter one, it takes us a little bit of time for people to come back from annually. Our field installation teams often take a lot of their vacation period over the Christmas break. So it's a little bit of a slower start for us. February is a shorter month, so we actually see there's only 28 working days in February, whereas we see normally a lot more than that. Those two things actually impacted us directly from a calendar perspective. But as you also touched on, Odette actually had quite a significant impact from us. The demand remained strong, but our ability to install them was hampered because we had quite a lot of our efforts focused on restoration activities in the Bismin area. Customers were actually impacted by Odette quite extensively. We had about 300,000 customers that we've actually had to restore services to in the southern region. But now that that has actually been completed, we're looking forward to actually ramping back activities in terms of net ads. What I will call out, though, is just to point out, if you look at year-on-year comparisons, we are still ahead of where we were last year. So there is some positive numbers there, and we look to continue that throughout the whole year.

and also from Vermont in the past. Should we expect further funding rounds for Boya Jervis?

Currently, the round that we have done funds as well for the plans that we have in the foreseeable future, specifically making sure that we can focus on execution. So the investors came in and the round that we did of $210 million to make sure that the The team is fully focused on the execution of launching and scaling up the bank and developing the other services. So at this stage, we are comfortable through the course of 2022. But as we will see the progress, we will then see the need if there is further allowance available.

Your hand is still raised. Did you have a follow-up question?

No, sorry. I'm good. Thank you.

We have no further questions in the queue, and neither are there any questions sent in via email. Last chance, last call. If there are no more questions, we'll turn the floor over back to Mr. Pangilinan for his final remarks.

Thank you for joining us this afternoon in respect of the offer support results briefing. And we look forward to speaking with you again Thank you for your participation. Stay safe. Thank you. Thank you, Melissa.