PLDT - Q1 2024
May 9, 2024
Transcript
Melissa De Dios (First VP and Head of Investor Relations)
Good afternoon, and thank you for joining us today to discuss the company's financial and operating results for the Q1 of 2024. A copy of today's presentation is posted on our website. For those who've not been able to access, you download the presentation at 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 notice is emailed to you. For today's presentation, we have with us our Chairman and President, Mr. Manny Pangilinan, Sir Danny Y. Yu, Chief Financial Officer and Chief Risk Management Officer, Atty. Marilyn A. Victorio-Aquino, our Corporate Secretary and Chief Legal Counsel, Mr. Orlando B. 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 (CFO and Chief Risk Management Officer)
Good afternoon, everyone. Allow me to share with you PLDT's financial and operating results for the Q1 of 2024. Consolidated service revenue for the Q1 grew by 3% to PHP 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 PHP 21.4 billion. Consolidated EBITDA rose by 5% to PHP 27.3 billion, with EBITDA margins stood at 52%. Telco core income, excluding the impact of asset sales and Maya, expanded by 8% to PHP 9.3 billion. Next, please. On segment basis, the strongest growth was registered by our individual or mobile business, having grown 7% to... or PHP 1.3 billion to PHP 21.1 billion in the Q1.
The enterprise segment recorded a 3% revenue increase to PHP 12.1 billion. While home segment revenue were stable year-on-year at PHP 15 billion, fiber revenues were higher by 7% or PHP 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 Q1, 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 Q1 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 PHP 13.7 billion. Home fiber ARPU saw improvement year-on-year and remained at around the 1,500 level. Increased focus on quality of service has helped reduce churn. Fiber churn improved to 1.82% for the Q1 of the year. PLDT is of the view that there are unserved and underserved markets in the home broadband space. These include 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 Q1 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-Person services, which are the SMS, OTP, or one-time 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 Santa Rosa data center remains on track, with the first 10 MW capacity expected to come on stream by July this year. Full capacity is expected to be a year ahead of competition, making PLDT well positioned to serve the existing robust demand from hyperscalers. Total cash OPEX was moderately higher by PHP 600 million in the Q1, 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 3 months of 2024 rose 5% to PHP 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 PHP 9.3 billion, higher year-on-year by 8% from PHP 8.6 billion in 2023, reflecting the impact of higher EBITDA, partly offset by higher financing costs and tax provisions. On reported basis, PLDT income expanded by 9% to PHP 9.8 billion, mainly from derivatives and tower sales gains. Note that our share in losses from Maya for the quarter stood at about PHP 400 million, lower than last year, and consistent with the expectation of Maya's bottom-line break even 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 PHP 257 billion, of which 15% are dollar-denominated and 5% unhedged. Interest costs for the period stood at 4.8% pre-tax, while the average life of debt is 6.9 years. Next. Total CapEx for the quarter stood at PHP 15.7 billion, consisting of network and IT CapEx of PHP 14.1 billion and business CapEx of PHP 1.6 billion. CapEx intensity stood at 30% for the quarter. Of the PHP 33 billion commitment net of advances to major CapEx vendors, the remaining commitment has been reduced to PHP 10.3 billion.
For 2024, our CapEx guidance is PHP 75 billion-PHP 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.
Shailesh Baidwan (President and CEO)
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 2 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 Q1 in 2023.
Our deposit balance grew to PHP 29 billion, which was, again, a substantial increase of over 40% from the same period last year. Importantly, our loans disbursement from the launch of our loans has crossed now the PHP 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 count and 49% by value for QR Ph, the common QR standard in the Philippines, in the Q1 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 PHP 2 million on the back of the payment 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 their 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 a control on expenses, a reduction in the cash burn, with the eye of getting to positive cash by the end of this year.
Danny Yu (CFO and Chief Risk Management Officer)
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 PHP 35 billion. Consistent with our commitment to lower the CapEx headline number and CapEx intensity over time, our CapEx guidance for 2024 is PHP 75-78 billion. This includes fresh CapEx for the year and the deliveries of prior years' commitments.
Reiterate our commitment to a 60% dividend payout, and our continued focus on deleveraging back to our target of 2.0 times net debt to EBITDA, and achieving positive free cash flow after dividends, which we expect by 2026. That ends my report.
Melissa De Dios (First VP and Head of Investor Relations)
We now go to speak. You may type your questions in the Q&A box on the right side of the screen. You may also click the Raise Hand button and wait for your name to be called before you unmute your microphone. You may also send your questions by email to [email protected]. Please indicate your name and company name so we can get back to you for any additional information you may need. So we can start with questions that were sent through email. "Could you characterize the competitive landscape in the wireless business? Thanks.
Manuel Pangilinan (Chairman, President, and CEO)
To respond to the question on the wireless space and the competitive landscape, we see continued push for service quality. We can sense that from the growth in the network build, not just from Smart, but from the other players 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, you know, and all the macroeconomic indicators, we now have to take a look at offers that promote longer validity, probably higher bandwidth, no?
Understanding, especially those customers who have probably difficulties, and who are on 15 or 30-day 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 De Dios (First VP and Head of Investor Relations)
Ranjan, you may unmute your mic.
Speaker 8
Hi, can you hear me? Hello. Hi, can you hear me?
Melissa De Dios (First VP and Head of Investor Relations)
Yes, we can hear you, Ranjan.
Okay. Hi, thank you for the presentation. It's Ranjan from J.P. Morgan. Two questions from my side. Firstly, on your guidance on telco core income of PHP 35 billion or more, you've already achieved PHP 9.3 billion pesos. So is it possible to, is it possible to tighten the guidance further, like, north of PHP 35 billion is a pretty wide range. Like, how should we be thinking about it? Will it be 36, 37, 40? If you can give some more color around this. And secondly, on your guidance of positive free cash flow after dividends in 2025, but if we think of 2024, would you be positive free cash flow before dividends? Thank you.
Danny Yu (CFO and Chief Risk Management Officer)
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 PHP 35 billion. So what was the second question? Sorry, Ranjan, I didn't hear that quite clearly.
Melissa De Dios (First VP and Head of Investor Relations)
free cash flow.
Danny Yu (CFO and Chief Risk Management Officer)
Free cash flow. We showed free cash flows in the Q1, so is it likely?
Speaker 8
So the question is like, can you expect PLDT to be free cash flow positive before dividends in 2024?
Danny Yu (CFO and Chief Risk Management Officer)
But maybe I should maybe step in, what'd you say?
Melissa De Dios (First VP and Head of Investor Relations)
Ranjan.
Danny Yu (CFO and Chief Risk Management Officer)
Ranjan. You're with J.P. Morgan?
Speaker 8
Yes, that's right.
Danny Yu (CFO and Chief Risk Management Officer)
Okay. Well, well, certainly, well, mathematically, you're correct, right? But of course, the world doesn't work to perfection when it comes to mathematics. Clearly, the internal target is higher than the PHP 35 billion that you have indicated. I think we'll get... We'll give you a better fix on the numbers once we announce our H1 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 PHP 35 billion. Indeed, so far, if we could get... If the wireless business maintains the momentum it established since the Q4 this last year and the Q1 this year, then that will help.
I think we need to get the home broadband going starting the Q2, and the enterprise as well. If we could achieve a greater level of those for these three revenue streams for the balance year. Q2 is actually the best quarters, typically for Smart and for the industry, so 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, for the whole year. And if we're successful in disposing of some partial interest in the data center, I think that will help that picture as well.
Speaker 8
Got it. Thank you.
Melissa De Dios (First VP and Head of Investor Relations)
Luis?
Speaker 7
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 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?
Last question is, yes, related to the data center monetization that we'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 some for any special dividend or the like?
Manuel Pangilinan (Chairman, President, and CEO)
Hi, 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 now. So, that comes on the back end of number 1, increased 5G devices latch onto the network. You know, 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're able to reduce LTE congestion where majority of our customers still reside.
I hope that answered your question.
Speaker 7
Yes, it does. Thanks.
Manuel Pangilinan (Chairman, President, and CEO)
Okay, then, oh, you want to...
Danny Yu (CFO and Chief Risk Management Officer)
Can you repeat your second question? Sorry, we didn't get...
Speaker 7
Oh, 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 growth offsetting the fiber disconnections. Is that internal migration between, you know, fixed to fixed wireless, or that's really the picture of the real picture?
John Gregory Palanca (Head of Sales and Distribution)
Hi, Luis. I'll take that question. Sorry, let me 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 Q1, 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-
Speaker 7
Mm.
John Gregory Palanca (Head of Sales and Distribution)
For a cohort of customers that we were actually treating for an extended period of time. So, there, there's actually not a drag from fixed wireless to fiber, and or any specific sort of migration between the two technologies. We are seeing fixed wireless start to improve. In fact, if you look at Q1 year-on-year, it's down to about PHP 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, VDSL, as well as our voice business.
Speaker 7
Thanks. It's very clear.
Danny Yu (CFO and Chief Risk Management Officer)
Luis, to your third question, so any proceeds will likely be used to pay off debts.
Speaker 7
Oh
Danny Yu (CFO and Chief Risk Management Officer)
... I don't think there'll be special dividends for now.
Speaker 7
Okay. Thanks.
Danny Yu (CFO and Chief Risk Management Officer)
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 exposure of PLD, and of course, the free cash flow aspects as well. So be mindful of the fact that, you know, the bulk of the proceeds from any sell down for that. Now, of course, we have shareholders, like yourselves, I suppose. So we would take a look, depending on the quantum of the cash that we get, no? 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...
I'll take a look at that. Hopefully, we could please you. From Citibank?
Melissa De Dios (First VP and Head of Investor Relations)
No, from... Yes, Citi. Correct.
Manuel Pangilinan (Chairman, President, and CEO)
From Citi.
Speaker 7
Oh, yes, boss. Thank you.
Danny Yu (CFO and Chief Risk Management Officer)
Thank you for the question.
Speaker 7
Thanks, all. Thanks, all. Very clear.
Melissa De Dios (First VP and Head of Investor Relations)
There's a question in the Q&A box from German de la Paz, where he asked for the reason for the huge jump in mobile data traffic in the Q1.
Manuel Pangilinan (Chairman, President, and CEO)
Yes, I think I already answered in part earlier. Second, I think just want to emphasize, aside from installed devices, which have grown a big way, particularly for 5G, I think on LTE, we're also seeing a decongestion of LTE users, especially those of 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, we'd 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 De Dios (First VP and Head of Investor Relations)
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?
Manuel Pangilinan (Chairman, President, and CEO)
Yes. We have seen a growth of over 21% for both brands of Smart Prepaid, and we are confident that this will continue to grow in the next 6 months.
Melissa De Dios (First VP and Head of Investor Relations)
Is that okay? Oh, sorry, that was from German. There's a raised hand from John Te. John, hey, John Te.
Speaker 6
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, that because net adds were negative, gross adds for fiber weren't as much as it was in the H2 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 (SVP and Head of Consumer Business)
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 one-time cleanup, we actually had 37,000 net adds for the fiber business. You will see there that, churn has actually been stable with that, one-time cleanup.
However, when you look at reversing the one-time 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.
Speaker 6
Thanks, Jeremiah. Just a quick follow-up. I'm just trying to make sense of, the revenue growth in the Q1. So home broadband was, as you said, flat. So how... To which would you ascribe, I guess, this, this trend?
Jeremiah De La Cruz (SVP and Head of Consumer Business)
Sure, John. So, so the, the growth- 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 PHP 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 just the fiber business alone, you'll actually see that it's growing at a rate of 7% per year.
Speaker 6
Okay, thanks. If I understood it correctly, I guess the drag from the copper business was more than in this quarter than in the H2 of last year, just to complete the picture.
Jeremiah De La Cruz (SVP and Head of Consumer Business)
Um-
Speaker 6
Because it,
Jeremiah De La Cruz (SVP and Head of Consumer Business)
Can you hear me?
Speaker 6
Yep. Yes, yes.
Jeremiah De La Cruz (SVP and Head of Consumer Business)
Yes, there is. There is. Sorry, John, I think you're echoing. Okay. 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've got from our legacy business. But given we are reaccelerating our fiber deployment, starting this year, we'll look to actually get that.
Speaker 6
Okay, thank you. That's very clear. Just one very quick follow-up housekeeping question. I see depreciation in the Q1, relatively flat, from last year. Is it safe to assume, you know, call it the sub-PHP 12 billion per quarter depreciation, except for Q?
Danny Yu (CFO and Chief Risk Management Officer)
It's most likely to increase. It's gonna increase slightly towards the latter part of the year, mainly due to newly capitalized assets in our ROUs. So it's gonna be slightly higher than the current level.
Speaker 6
Okay, thank you very much. And again, congrats on the results.
Melissa De Dios (First VP and Head of Investor Relations)
Thanks, John. There is a question emailed: What is the rationale for Radius acquisition?
Manuel Pangilinan (Chairman, President, and CEO)
Thank you very much for that 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 the journey simpler and secure by design, data connectivity options. So we can leverage both PLDT's network and Radius' network to provide better experiences for our customers, and, you know, 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 executions 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.
Danny Yu (CFO and Chief Risk Management Officer)
Sorry, just-
Well, you know, maybe just to add a bit more color to this thing. The Radius has been, as you know, relying on... Well, it's a sister company of PLDT, right, because it's a wholly-owned subsidiary of Meralco. It has been a bit of a pain point when it takes initiatives that are independent of or contrary even to the interests of PLDT. Like, having its own CapEx to build its fiber, marketing to both individuals and to enterprises without coordinating PLDT Enterprise. So for the best that we get coordinated on the home broadband front. As Jojo indicated, Radius is quite, they have a good fiber network in basically Metro Manila, in certain parts of the franchise areas of Meralco, and number 2, a very strong enterprise base.
So it's best, we thought that from a group perspective, that they stay coordinated on the enterprise front. It has shown losses on the consumer front, on the individuals, on for homes, homes itself, not the enterprise side, and I think what we want to do is to migrate the home customers of Radius to the home broadband of PLDT, because in any event, homes, sorry, Radius is losing money on the home front. That should happen. He completed the investment last week, and I think Jojo has appointed someone from Enterprise to help manage the Radius business, stay coordinated, in terms of approaching and attacking the home broadband market, both individuals, individual homes and the enterprises.
Melissa De Dios (First VP and Head of Investor Relations)
Another question that's been emailed: Any this color that you can give on the competitive landscape for the home business?
Jeremiah De La Cruz (SVP and Head of Consumer Business)
Right. 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 peer-to-peer 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 the period of high level of commoditization. But we will start to look at how we address the different segments of the market. There's 2 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 3 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 necessarily destroy value and actually completely cannibalize our base.
Melissa De Dios (First VP and Head of Investor Relations)
Any updates on the DC sale, the center?
Manuel Pangilinan (Chairman, President, and CEO)
Well, I think it's fair to state that the discussions with several parties that have expressed interest in investing in our data centers, it spans 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, they gave us sort of values that we expect to fetch for the data centers, which is north of $1 billion, no? And however, the condition that they wanted to have is that they would have majority, the ability to consolidate the data centers, and that sort of stopped in our probe, because we think that it has a good future for PLDT to give up control, and a significant portion of executive interest in the data centers is not to our interest, no.
And, we told Docomo that they are investors in PLDT, so they should be able to accommodate what they see the best interest of PLDT after all the shareholders have said. Besides, I think if we do away with the consolidation of data centers, we produce approximately PHP 5 billion or PHP 6 billion of revenues, when we do divest majority interest in data centers, and that requires more explaining with you guys, right? Why did our revenues drop by PHP 5 billion or PHP 6 billion? 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 receive are less than what Docomo are prepared to pay, so we have to ponder very soberly about whether that's something we would like to have, or to take an alternative form, alternative approach by adopting the REIT, model, REIT model. That's something I think we're quite serious about, because that's fairly close enough to the Docomo valuation, and, and accommodates the interest of PLDT in terms of being able to continue to consolidate, continue to manage the, the data centers, and expand it the way we see it. And, we would hope to, to, to get a party that can add value added to the revenue line and to the expansion of the data centers.
We're learning a lot 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, that's fine with us, which means that we are in many ways persuaded to adopt an expansive mode in our data center business, which we like, but important. 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 from divestment of our interest, some of our interest in the data centers.
Melissa De Dios (First VP and Head of Investor Relations)
There's a question, are there any updates on the digital? [audio distortion]
Yeah.
On the digital front, we're pleased to advise that we have been moving along very well. A lot of our focus has really been around the data portion of the group, of the MVP group. So we have managed to already look into. 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 ex-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, and the like. Are there any other questions? You raise your hand, type in the Q&A box. There's a question from Stephen Oliveros: How much of the tower sale deals are we looking at for this year?
Manuel Pangilinan (Chairman, President, and CEO)
Okay. We already received around PHP 84 billion out of the total PHP 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 PHP 14 billion, if we get to transfer all this year.
Melissa De Dios (First VP and Head of Investor Relations)
Any other questions? If there are no further questions, I'll now turn the floor over back to Mr. Pangilinan for his closing remarks.
Manuel Pangilinan (Chairman, President, and CEO)
Thank you. To begin with, thank you to all of you for joining us this afternoon, listening to our presentation, and pleasure to answer your questions. We look forward to talking to you again towards the end of August, right, for the H1 results of PLDT, and give you a better fix on full year numbers and special dividends.
Melissa De Dios (First VP and Head of Investor Relations)
Thank you, and that's... Thank you for joining us today. Have a good afternoon.
Manuel Pangilinan (Chairman, President, and CEO)
Okay.