PLDT (TEL) accumulating debt, future cash dividend in grave danger with duopoly gone
TEL has been gradually accumulating debt. As of June 30, 2020 (1H 2020) total long-term debt of TEL is at 199.7 Billion Pessos. That is a significant 28.2% increase from 155.8 Billion Pesos as of the end of December 31, 2018. It can be remembered that on October 2019 TEL initiated a consent solicitation from bondholders to amend certain provisions in the indentures to allow TEL to borrow more money without breaching any debt covenants. TEL has to borrow more in 2019 because it has to fund its massive capital expenditures. In 2019, TEL spent 88 Billion Pesos for network and infrastructure. TEL has to catch-up on network and infrastructure investments as the third telco rolls out its network and telecom infrastructure . Over the years while it grew debt, TEL did not invests aggressively on its infrastructure. Over a three period from 2016 to 2018, TEL’s investment on its infrastructure averages to only 42 Billion Pesos. TEL was among the early companies to dip into borrowings ...