Good afternoon, and thank you for joining us today to discuss the Company's Financial and Operating Results for the First Half of 2020. A copy of today's presentation is posted on our website. For those who've not been able to do so, you may download the presentation from www.pldt.com under the Investor Relations section.

For today's presentation, we have with us Mr. Manny Pangilinan, Chairman and CEO; Mr. Al Panlilio, Chief Revenue Officer; Ms. Anabelle Lim Chua, Chief Financial Officer; Atty. Ray Espinosa, Special Adviser, Senior Adviser to the President; and other members of the PLDT management team.

In terms of sequence, we'll start off with Al Panlilio, followed by Anabelle Chua for the financials and a wrap-up in guidance from our Chairman. I now hand over the floor to Mr. Panlilio for the presentation..

improving network quality, strengthen our digital content and platforms, and our North Star is really championing, customer experience. A very important -- next page. A very important -- a big story this year and also closed our hearts as a group, is really making sure that we're able to help the country develop the ecosystem in e-learning.

So the mantra of our Chairman, no learner left behind.

We are working with DepEd that we're able to create an e-learning ecosystem in partnership with them so that we could offer a blended learning strategy encompassing modular online TV and maybe even signal and radio-based learning so that we can really address the 32 million students that need to go back to school and the 1.2 million teachers that need to work with the students.

So this is a very important initiative for us, and we are helping DepEd hopefully develop our e-learning ecosystem. And as you know, during the pandemic, the MVP Group had a big response to the COVID-19, as to our Tulong Kapatid, helping government.

We provide connectivity to LGUs, hospitals, quarantine facilities and COVID frontline housing facilities. We also a gave free access to government websites and free cost to government hotlines. In cooperation with other companies of the MVP Group, namely, Maynilad, Meralco and even NLEX tollways.

We partnered with the Philippine Arena to volunteer the biggest We Heal As One Center in the country in Bulacan. So we will continue to support government, obviously, during this time, and all our initiatives are focused on helping our fellow Filipinos. So lastly, my last page, really.

Again, we grow our business by helping our customers to build their lives, and we want to remain relevant to them. And that will be our main focus in the second half, but we will also remain laser-focused on delivering performance, but also investing ourselves to become more customer-centric and really become a digitally powered organization.

Thank you very much..

Thank you, Al. So welcome, everyone, to our first half 2020 results briefing. So let me start off by saying that despite the severe and unexpected disruptions caused by the COVID-19 pandemic, PLDT maintained our growth momentum from 2019 to the first half of 2020. And as a result, we saw quite healthy financial results during the period.

As Al had already highlighted, our service revenues rose 8% to PHP82.8 billion in the first half, and this is a new high in terms of semester revenues.

Now the 2Q revenues were better than initially expected, and coming in at PHP41.3 billion, which was lower than the first quarter, was not as low as we have indicated earlier, and it represented a 7% increase from prior year.

Consumer Individual business, which felt the most impact of the quarantine restrictions, with 2Q being lower than the first quarter. But nonetheless, it saw a continued strong growth of wireless data usage, which is solid on our 2Q revenues for the Individual segment coming in higher by 7% year-on-year -- sorry, by 12% year-on-year.

For Enterprise and Home businesses, 2Q revenues for both of these customer groups increased from its first quarter levels despite the challenges from the pandemic. So when you look at it combined, the Consumer and Enterprise business groups combined, grew by 10% year-on-year in the first half of the year to PHP79.6 billion.

And on the other hand, our international and carrier business posted PHP3.1 billion of revenues, which are 30% lower than prior year, but this included the impact of the removal of mobile interconnect revenues starting January of this year.

So without this, international revenues are down, but at a lower rate of 10%, and this is really due to the drop of international roaming revenues. Next slide, please. With the 8% increase in service revenues, equivalent to PHP6.2 billion.

We were able to cover the increase in our OpEx of PHP2.9 billion, resulting our EBITDA growing by 8% to PHP43.2 billion in the first half. Our EBITDA margin remained at a healthy 52%. Our depreciation expense and financing costs were higher year-on-year as a result of the investments we have made in our network rollout and expansion programs.

We're also pleased to highlight that under these unusual times, we achieved a PHP13.9 billion first half telco core income, which is higher by 5% year-on-year. Our statutory reported net income grew slightly by 1% to PHP12.3 billion. Moving on to the next slide.

So when you look at our service revenues over the last 3.5 years, you'll see that the revenues continue to climb quarter-on-quarter and then notwithstanding the impact of COVID-19 and the government's proposition of the community quarantine, our first quarter and second quarter service revenues this year still represents historic highs for the company.

So Q1 revenues were up 9% year-on-year, while Q2 was up 7% ahead of the same period. Next slide, please. Showing the same numbers, but broken between data and non-data revenues. You can see clearly, the data was the main driver of our top line growth over the years of facing the downward movement in our legacy revenues from SMS, international voice.

Now for this semester, data revenues grew 18% or PHP9 billion. Next slide, please. When you look at the 8% revenue growth in the first half, this really reflected the growing importance of data, particularly during a period where data access has become critical for our customers staying and working from home.

The first half, our data revenues of PHP59 billion accounted for 71% of our total revenues and up 18% year-on-year. Mobile internet revenues moved up 34% versus a year ago to PHP29.3 billion.

Data usage continued to be strong, driven by demand for our mobile video services, social media, mobile games delivered to our customers through various GIGA load packages. Our mobile traffic usage was 1.4 exabytes, which are more than double from the traffic in prior year.

Volume broadband also posted an 11% increase in revenues, with the demand from Home connectivity bolstered by the lockdown. So, while we had challenges in installs during March and April, we were able to steadily ramp up our installations of fiber and fixed wireless broadband connections in May and June to even higher than the pre-ECQ levels now.

Corporate data and data center revenues were higher by 3% at the combined PHP12.5 billion of revenues, and we see emerging opportunities to serve the enterprise market in the new normal. Now moving on to the next slide, please. We show here how our EBITDA and our telco core income has changed from prior year.

Our EBITDA increased 8% or PHP3.3 billion, from PHP40 billion to PHP43.2 billion in the first half as the increase in our service revenues of PHP6.2 billion fully absorbed the rising cash OpEx and subsidies of about PHP2 billion and an increase in provisions of about PHP900 million. EBITDA margin was a healthy 52%.

Our first half telco core income at PHP13.9 billion is PHP700 million or 5% ahead from last year, driven by higher EBITDA, partly offset by higher depreciation and financing costs resulting from the higher CapEx. Next slide, please.

Here, we show our quarterly EBITDA numbers, and you see here that our 2Q EBITDA was stable versus first Q, notwithstanding the dip in revenues Q-on-Q.

So viewed against the quarterly results over the last 2 years are PHP21.6 billion EBITDA in the first quarter and the second quarter are the highest for the quarter, other than quarter in fourth quarter 2019. So the PHP21.6 billion average is also higher than the average quarterly EBITDA of PHP20.8 billion registered last year. Next slide, please.

This is on telco core income. So our telco core income of PHP7 billion in 2Q is about PHP0.1 billion higher than 1Q. The average quarterly result is also ahead of our 2019 quarterly average telco core income of PHP6.8 billion.

In light of the uncertainty surrounding the impact of COVID-19, we have not provided earnings guidance for the year, but we are certainly aiming for 2020 telco to be stable versus 2019 at approximately PHP27 billion. Next slide. This morning, the PLDT Board deferred an interim dividend of PHP38 per share for payment on September 4.

The dividend is in line with our policy to pay out 60% of our telco core earnings. If you calculate it based on the end due share price of PLDT, the dividend yield for PLDT holders is about 6%. Next slide shows our statutory reported income results. Reported income was PHP12.3 billion, 1% better than prior year.

After taking into account our equity share in the results of Voyager, the reval losses on our investments in Rocket Internet shares versus a reval gain last year and then an impairment charge relating to our investment in iflix of about PHP0.6 billion.

In the second quarter, all the shareholders of Voyager signed up to commit PHP120 million of new funding for Voyager, with PHP65 million of this commitment increased in May. So we continue to look positively, and there is prospects of Voyager, particularly with distractions seen during this period for digital financial services.

Moving on to some balance sheet metrics. PLDT's net debt as of end June amounted to USD 3.8 million, while net debt-to-EBITDA ratio stood at 2.19x.

The gross debt amounted to USD 4.75 million, which included the $600 million new bond issue of PLDT, which was consistent of a $300 million long 10-year issued at 2.5% coupon and another USD 300 million 30-year issued 3.45%. Now with these tenures, we were able to expand our debt maturities out so that 50% or our debt will now mature beyond 2025.

And while we have increased the mix of our dollar debt, it's approximately 19%, our unhedged debt as of end of June was limited to 4.4%, given our dollar cash position.

Going forward, as we refinance our peso debt from the dollar bond proceeds, we'll continue to manage our FX exposure with hedges, and we will aim to keep the hedge portion at somewhere between 10% to 15%. Fixed rate loans accounted for 85% of our total, and our average interest cost was at 4.78%. Moving on to the next slide.

Our CapEx in the first 6 months came in at PHP31.4 billion. So as Al initiated earlier, while our original CapEx guidance was PHP83 billion, we now expect our spend for the year will be up to PHP70 billion, which is all of the same level as our 2019 CapEx level spend despite the challenges and restrictions during the quarantine period.

We made adjustments in the months following the lockdown and gradually scaled up our CapEx view. We do continue to prioritize projects that uphold our service quality in order to support our customers in the public for their businesses and social activities under these new conditions.

I must say that our network held up pretty well with a surge in data traffic, about 25% during this time. The shift of data traffic from the offices to the homes, with a rapid move to work-from-home.

In April 2020, we reallocated 2G-assigned frequencies in 1,800 megahertz from 2G to 4G LTE, which allowed us to increase the mobile data capacity of Smart's network. We also expanded our international links to support the higher demand for Internet connectivity. Next slide, please.

As -- here, we show that PLDT Smart continued our efforts to expand and modernize our fixed and mobile networks despite the pandemic conditions. So some select highlights from our network. As of the end of June, PLDT increased the coverage of our fixed network to pass 7.8 billion homes, so that's 8% more than the level at the end of 2019.

We have build capacity of 3.7 million fixed broadband ports available to serve those working or studying at home. The same period, the total footprint of PLDT's fiber optic network expanded by 11% to about 358,700 kilometers of fiber gained.

For the Wireless side, Smart further enhanced our mobile data coverage by adding 2,500 new 4G LTE-based stations, raising the total to about 27,100. And then for 3G, there's another 1,200 added to get to 15,000 3G-based stations as of the end of June.

So when you combine our 4G and 3G, we are able to serve more than 95% of the country's population with mobile. And if you add 2G in the mix, we actually serve 96% of the country's population. Next slide, please. We saw mobile traffic explode compared to previous periods.

As indicated, our mobile data payload rose to 1,368 petabytes in the first half of 2020, which is double the traffic of first half 2019.

In 2Q alone, the mobile traffic was 25% higher than the traffic in first quarter, so we expect the demand for data services to remain high with the growing dependent on online and the expected more extensive adoption of digital solutions for our customers under the new normal. As traffic grows, our network has remained resilient.

The superiority of our network was validated by third-party reports released by OpenSignal and Ookla. So based on the report of OpenSignal, Smart remains ahead of competition in terms of video experience, upload/download speeds, voice app experience and 4G availability.

Ookla also scored PLDT to the top download and upload speeds for fixed and Smart for wireless in this country. On this part, let me turn this over to Mr. Pangilinan for the latest outlook for 2020..

Well, thank you, Anabelle, and thank you to all of you for joining us in this meeting this afternoon. Well, I'd like to first say that our outlook for balance of the year, in the second half 2020, is guarded and a bit cautious. Given what we've seen today, the economy contracting by 16.5% in the second quarter.

And of course, witnessing the second wave of the virus being, I think, significantly worse than the first wave. So we are concerned about, of course, the health of our people.

And secondly, the economic impact on the enterprise sector and on the ability of individuals to -- in terms of the disposable income, in terms of purchasing power to acquire our telco services, particularly in the second half.

Now with that said, we -- PLDT and Smart have managed to perform reasonably well in the second quarter despite the -- in the middle of the pandemic, and we -- our mission is to continue with that upward momentum and maintain that for the second half of this year. So that's on the revenue side.

I think as Anabelle indicated earlier, our telco core, we are guiding to a level very similar to 2019, if not better. Our dividend payout is at 60% of telco core.

And CapEx, we're guiding to a higher number than what we had guided at the onset of the pandemic to -- from PHP63 billion to PHP70 billion, which is similar, a level similar to what we spent last year in CapEx terms. So, we're guardedly optimistic for the second half. But on the whole, we expect the performance to be quite good for 2020. That's it..

[Operator Instructions] The first one from Arthur Pineda, how do your July trends compare against May and June levels? Are we seeing sustained improvements or was there any -- was there some degree of pent-up demand being filled in May and June?.

We still see a good level. It is similar to the June levels, at least on top-ups. So we still continue to see that. We felt that in terms of seasonality, normally June is softer because people are preparing for payments of school tuition fees. We did say that in June, we saw that more in July, but we expect -- we started August very strongly.

So I think the momentum on the top-ups are still there. Now on fixed, I think our capacity of install has also improved as we -- July is better than June, and definitely, August will be also be better than July in terms of installation capacity that we can put on the ground. So we still see that the trend is still good..

If I could add to what Al said, actually, our top-ups for July are at levels very similar to June, right, Al? So there's been no let-up in terms of the level of top-ups on the Wireless side.

On the top-ups for the fixed wireless side of our business, it has been going up, and that trend continues -- continued through to July and probably -- and then the first few days of August are higher. So on the Home broadband side, the -- as Al indicated, the fiber -- the fixed installations are higher for July.

And I think we're also ramping up fixed wireless installs for July. And I think for the balance of the year, the trend is likely to continue. That is -- at least that's the goal. So there's been no diminution in both our effort and the results so far we're seeing on the revenue side of the business.

And of course, it's our desire to keep maintaining that momentum to the end of the year..

Also from Arthur Pineda, what percentage of broadband subs are on fiber and what are on percentage on copper? And is there any ARPU differential if a sub migrates from fiber to DSL?.

It's about 2/3 of the subscribers are on fiber, and the rest is -- yes, the rest is on copper. We announced the program to migrate about 600,000 customers, which are still on the old legacy ADSL technology within the next 18 months to fiber. This program has already started and will go through the next year.

And this will be at no extra cost for our subscribers, free upgrade..

But typically, your fiber subscribers ARPUs have been slightly higher than ADSL copper, but not too much, about PHP200..

And you probably know that the ARPU on fixed is, I think about 3x, I guess on the wireless. So that's why we are quite optimistic about Home broadband revenues for the second half will be -- I think it will be much better than the first half..

This next question. A competing fixed broadband operator seems to be outpacing the incumbents when it comes to fixed broadband net adds.

What is driving this as incumbents of superior homes pass? And what can be done to better protect the market share?.

Any more detail on which?.

I think it's referring to....

Probably....

But it's not a new operator.

It's a newcomer, right?.

Yes. Well, obviously, what we're doing, we can only improve what we can do, right? So as I mentioned earlier, we're ramping up on our capacity to install, and that has been -- we're working closely with the group in making it happen. There's a number that we're targeting on a monthly basis.

So we'll increase it to that level, a much higher level than where we are today. At the same time, I think we're making sure that our service is much better, customer experience is much better..

So maybe we can also add to that, that July is an all-time high in installations. It's significantly higher than the months before. And it's not -- we are happy with our progress, but we are not satisfied where we are. We will push higher this year. So I think we will soon be in a position to install many more ports for months than we were in the past..

There's a related question from Diane of Nomura. How do you plan to increase the utilization of the existing fiber ports given it's been an issue for some time? Some of your peers are doing much better in increasing the utilization of existing ports..

Actually, utilization has gone up during this year, actually, by 10 percentage points already, and we have a clear target for end of this year what utilization is concerned. And going forward, I think this will not be a problem anymore..

Yes. From the business, I've seen a program that will increase it 12% in the mark to year-end. So we will definitely focus on utilizing the maps that we have undergone..

We have many more ports than anybody else. Fixed ports..

And then finally, from Arthur, can you talk about the bad debts? How should we see this a trending in the second half?.

Yes. Arthur, that's something that we would have to closely monitor. I think there will be 2 key items to look at. First, as you know, we gave our postpaid subscribers a 6-month installment payment period, so that is starting to amortize. So we do need to see the collection -- success of collections for these people who are under installment plan.

So that's one item we will have to monitor closely. The next really is the macroeconomic situation. So under the PFRS 9, where you look at expected credit losses, it's very sensitive to GDP indicators and inflation. So if the GDP continues to be negative, that will effectively over for the need to provide for the eventual losses.

So those are the economic indicators that we do need to monitor. In the second quarter, we already increased our provisions about PHP1.4 billion compared to the first quarter, but this is an area that we will have to review more closely come third quarter..

Next question comes from Diane of Nomura.

Can you share some insights on competition so far in both mobile and broadband? Any comments on the emerging fixed line player Converge, which is also accelerating their fiber network rollout?.

Well, I think the results should speak for the performance that we've had. So I guess, you have all the data with you. You can do the analysis, and -- but we're very happy with our performance despite the fact that we were, of course, the pandemic and had difficulties.

But more importantly, I think we're able to serve our customers during this very -- most difficult time for them..

And on Converge, I think we definitely respect the competition there. We don't underestimate them, but you should also see that they are confined to Luzon. And they announced a big program to roll out fiber for backbone and to connect to other islands, which is a multiyear program.

So from that angle, we are actually massively ahead because we connect from almost all the islands here in the Philippines, and we connect to more countries internationally than anybody else besides capacity. So we have a very strong foundation.

And with our efforts to improve our efficiency on install, I think we will be strong enough going forward to compete and to maintain our leading market share..

Related question from John Te of PEP.

Compared to an emerging competitor whose strategy is microtrenching and able to grow its footprint fast, how does PLDT's rollout strategy differ? And what do you think are your advantages from a rollout perspective?.

So first of all, we also use microtrenching. But microtrenching has its limitations, and the biggest limitation is it's a very shallow digging on the street, and it easily can be disrupted. One of our biggest challenge in our fiber network is the number of fiber cuts we are facing every day.

So our strategy is that for the more important connections, we go underground, namely, we dig 1.5 meter deep or deeper. While microtrenching is typically only 10 to 20 centimeters deep, which can be easily impacted even by a truck rolling over it, even if you don't cut the surface, this fiber can break.

So it is fast, faster than digging deeper, but in terms of reliability of the network, it has significant disadvantages. But as I said before, we and our subcontractors have also microtrenching machine, and we use it where appropriate..

Also from John Te. PLDT lost less customers than Globe for the second quarter straight.

Do you think there are risks on competition on the mobile front? Do you think that competition has moved to fixed broadband of late?.

No, I think they would -- I mean, people will still use the mobile phone, and we've seen an increase contrary to the other company that you're referring to, I think we actually increased our base. We've increased our data users, for sure. And even our data usage has gone up significantly in the second quarter. I think that's in the report of Anabelle..

Then lastly, from John, regarding refarming; can you remind us which banks are now being 4G? And how much is capacity do you think you will have when these are freed up?.

So the refarming we did was 1,800 megahertz. And in fact, it was 5 megahertz of 1,800 megahertz. We added to, I think, 3,400 sites in the Philippines. 5 megahertz doesn't sound a lot, but if you combine it with the rest of the 1,800, it was actually a relief per site of 10% to 15% additional capacity. And in the constraints we had, that was significant.

Currently, we are using, depending on the locations, 700, 850, 1,800, 2,100, 2,300 and 2,600 for LTE. And we have many sites where we have already all bands put up in order to cope with the capacity constraints. Yes. And we are looking for more refarming going forward, either from 2G or from -- coming from 3G..

[Operator Instructions] This is the last question we have on hand.

Which geographies would you say where the customers concentrated? And in which areas do you think there are lapses in your current coverage? Where do you intend to expand to? And how different is this from your -- how different is this compared to your competitors?.

So, I think the traffic move from the CBDs to the suburban and rural areas there where people's homes are. And there's no general rule, we actually cover 95% of the population already. That means also in those area. It's more a capacity constraint that we didn't put as much capacity up in the past, which we have already fixed.

If you look to our speeds as by confirmed by speed test, in fact, we are now in July higher than we have been before. So I think we managed very well in terms of capacity. Still, there are areas practically all over the country where we added -- massively adding capacity, for example, North Luzon and South Luzon and some areas of Mindanao.

Also we are ahead compared to competition, it's not enough because we want to really reach all of our customers over time..

That's all the questions we have. [Operator Instructions] There's one from Savi of BPI [ph].

Could you share what you saw in terms of consumer behavior for mobile during the second quarter in terms of basket size? Would you say that the trends seen in the ECQ in March were fairly sustained? And second, Savi [ph] wanted to ask about the Enterprise segment.

You recalled that the indications were flat performance, so could you provide color on what drove the growth? Was it because of new accounts in phases like e-learning at telemedicine? Or were there some resilience for your current accounts? Could you also share what the difference in terms of experience of large corporate subscribers versus MSME subscribers for price? We can stop there first.

There's another question..

I'll ask Jane to answer the basket size, and maybe Jovy for the Enterprise.

Jane?.

Yes. We've actually seen significant improvements in critical business drivers, and one of them is basket size. So our average top-up basket size is higher on a year-on-year basis. And the top-up basket size for July and August is even higher than the first 3 to 4 months of the year.

So the highest basket sizes experience, sometime May, and I guess this is really because people were stuck in their homes, and there's some movement now. But it's -- compared to the first quarter of the year, it's actually significantly higher.

And more than the basket size actually is we actually have more customers loading up, right, so we have more subscribers with reload with higher top-up basket size, resulting to essentially higher average top-up per customer..

Jovy, for Enterprise?.

For Enterprise, what we're seeing is that there has been a level of resilience for some of our Enterprise customers. If you segment the large enterprise from the SMEs, you would say that the SME has been largely hit, majority of which have actually temporarily closed their operations.

Now that being said, we've actually released an SME stimulus package for us to be able to help the smaller customers to rebuild their operations, and we're giving the connectivity for them for 3 months free. We've seen some tick-up there.

And then on the large enterprise side, it has been largely driven by the fact that they had to keep their employees connected. So we have enabled a lot of work-from-home connectivity requirements from the enterprise sector. I think Al alluded to it a while ago that one of the sectors is BPO.

So BPO has been operating, albeit that their agents are actually working from home, so that has been the driver of the growth so far. And for the second half, actually, we're seeing that the same trend is going to continue, so a lot of the enterprise are moving into their digital assets now.

So we're helping all of them to really -- rather than rebuilding their businesses is really more of reinventing their business to the new normal, and that would be a lot of technology enablement that we will be providing..

Thank you, Jane. Thank you, Jovy..

This is the also the last question from Savi [ph].

Just wanted to get a sense of what you're seeing on the ground in terms of tower rollout both owned and shared after the release of the common tower guidelines by the DICT and the recent streamlining efforts by the DILG?.

So, as you may have captured; we have actually signed up 6 tower companies for an initial rollout of more than 180 sites. There is much more in the planning, and we are also talking to more tower companies. I think -- generally, you can say that the pickup is relatively slow because our demand is bigger.

But I think it's as difficult for the tower companies to get set up as it is for the telcos itself. If you ask about potential new entrant in the market, I think the numbers we are seeing are pretty low in terms of rollout and -- but that's not us to comment. If -- due to the recent announcements, the limitations in terms of rollout are being reduced.

The commissions are moving faster. You will also see that automatically, our ability to install more towers will pick up. And so yes, that's how we see it..

The next question comes from Joshua of Guild Securities. Monetization of mobile data traffic seemed to have stabilized. Please share with you what you -- what brought about this positive development..

It's -- Jane will be the best person, but it's really our GIGA platform, and that is already 58% or more, right, Jane?.

Yes, sir. Yes. So we continue to actually push the migration of our customers from 2G, 3G devices to LTE devices as well as LTE SIMs. And we've been quite successful in doing that as we saw significant growths in our LTE user base year-on-year.

At the same time, we continue to promote our data packages, particularly our GIGA platform because we do see a significant increase in ARPU when our customers subscribe to our GIGA data packs.

So the intention is to actually expand that data platform to address other passion points of our customers so we can actually also sustain our growth moving forward..

There's a question from Kervin of Macquarie.

Can you share with us any movement from data telecom in terms of the rollout? And any employees being poached by Dito?.

That is what I just said. I think we cannot comment on Dito's. What we are seeing is very little. But also, we have to talked to the tower companies and see if we can share some of the towers, but there's not much there. In terms of poaching, that, of course, happens, but that's the part of this industry.

If there's a demand for people, people get poached. We do not have a big drain of people to Dito..

There's a question from Herman of Abacus.

When do you expect Voyager to breakeven?.

Hopefully, 2023, if not 2024..

I think they did say -- we asked that question only recently on Voyager. They said that they are sticking to the schedule despite the significant rise in their volumes during this pandemic. They're staying with the current of becoming EBITDA neutral by 2023 and EBITDA positive by 2024..

A lot of questions together that are related.

Amidst concerns that the telco industry is becoming increasingly politicized, are you concerned by the President's threat of expropriation? Is there even a basis for this threat? And in spite of the 5G launch, how will PLDT discuss the recent remarks by the President in the last SONA?.

With great difficulty..

No. Well, we hear what the President said. He shared his concerns about the quality of the services we provide.

So we just have to concentrate on our mission regarding the submission or a mandate from him to raise the level of our services, which covers a broad range of topics, like, coverage, speed, upload/download speeds, video experience, latency, and so forth, reliability of the network, which I think our network, as Anabelle said is, that are doing well during this pandemic despite the restraints put on our people to expand the network, to repair and install what needs to be repaired or installed.

So what we would like to see is to sit down with the regulator, the NTC, to agree a common set of metrics by which we could be measured, including the cost of delivery of the gigabytes to the Filipino consumer so that we're guided as to who's doing well, not doing well, doing their job and not doing their job because those metrics are the metrics that rating agencies like Ookla or OpenSignal use in assessing performance of other telcos in other countries.

So for us to be referenced correctly, we have to read those measures that correctly puts us in the right place and to be charged. I mean, obviously, that's a country average, but there's also a PLDT number that is out there that's visible to everybody.

So, I think we should be more transparent as to how we are doing by ourselves and how the country -- taking everybody into account are doing, right? So that would be, I think, part of our job in the coming months..

And then last two questions from Joshua of Guild.

Can you give us updates on the fixed wireless side and the whole broadband business? How do you see the profile of fixed wireless and fixed broadband customers?.

Butch, are you online? Butch?.

Yes. In terms of fixed wireless and fixed, definitely for the Home segment, our priority is the fiber. We are ramping up the installations on fiber. We are ramping up our capacity to be able to install and repair fiber, and we shared with everybody that we're doing a copper-to-fiber migration.

That is a key imperative for Home subscribers just to improve the quality of service, but also the ability for Home to upsell and provide other areas of services and products to our fiber subscribers. In terms of fixed wireless, it is a balancing act that we are doing.

As much as we want to attack the market with fixed wireless products, we have to be able to balance the network capacity and our robust superiority in network today, which we feel is paying off the dividends.

If you look at the growth of Smart Wireless or Individual, a big part of that growth is driven by the network superiority and the customer experience of Smart subscribers. We cannot just launch without studying the impact to our Wireless subscribers, the fixed wireless product for Home. So we're doing a balancing act on that front.

I think we've done a good job.

If you look at the performance for the first half of the year, while Globe, be it in terms of fixed wireless subscribers, I think if you look at it holistically, if you look at it overall, and because we have maintained network superiority, better quality of service, I think, overall, if you look at the numbers, we perform much better.

So fixed -- so priority remains to be fiber. Fixed wireless is a balancing act, but we will continue to drive fixed wireless as well..

Thank you, Butch..

Thank you..

The last question.

Of the PHP48 billion budget allocated for network and IT CapEx, how much will be used for mobile and how much of these for fixed?.

Sure. So the PHP48 billion [ph] is not including the last mile, just to everybody understand. So the installation of fiber to the home is an extra budget. So the PHP48 billion is for the mobile network, the core network, transport network, and this is a highly merged network.

So it's actually not so easy anymore after we did all the migration to say this is not fixed, this is mobile. But about half will go into rollout of cell sites and upgrade of capacity and, the other half will go to transmission networks, to core networks and so on and so forth. But that's just a guesstimate, it's not highly precise.

Our target has always been to build a highly synergetic network that we got -- if you have the fiber, you can connect an Enterprise customer, you can connect the fiber to the home, you can connect the base station.

And that becomes a big advantage now as we have progressed because now as fiber to the base station becomes a standard, every time we put a fiber to the base station, we can connect an enterprise and we connect -- we can connect homes..

That was the last question that we had. [Operator Instructions] But if there are no other further questions, we just want to inform everyone that the broadcast of this briefing will be available on our website after the call. We now turn the floor over back to Mr. Pangilinan for his closing..

Converge, ourselves and Globe. And that will be a very, very interesting situation. The context of your questions that we have not performed as well as we should have performed, on the Home broadband side. And we would be the first to admit that. At least not lately.

I think for the second quarter, we've seen very good signs of PLDT finally getting its bearings on the installs, both on the fixed wireless and on the fixed side.

Now having said that, I think we want -- simply want to emphasize that given the metrics in respect of the margins, and the data usage for fixed wireless and for the FTTH, the economics are significantly in favor of FTTH rather than fixed wireless, both from a margin standpoint and both from a customer experience standpoint, because we all know that the fixed wireless uses the wireless network.

And so to the extent it's a shared medium, your service levels get affected if you add more and more subscribers onto your network. And the usage factor, at least in our own experience, for fixed wireless is about 8 to 9x, 8 to 9x the usage of somebody who's on the mobile internet.

So we are pushing our fixed wireless, but up to a point, because we want to make sure that our customer experience is maintained at the levels that is satisfactory to both a fixed wireless subscriber and certainly to the mobile subscriber, which is the bigger part of our business.

Now so -- and the margins on the FTTH are really much bigger, 3 times as well. And the usage, as I said, the fixed wireless is much higher.

So we cannot totally -- however, having said that, we cannot totally abdicate that particular segment of Home broadband to our competitors, right? Much less abdicate our market share to Converge on the fixed side of the business. So we have to compete on both sides, but maybe not as much on the fixed wireless side.

Now the question to you, and I don't have the answer, but please think about it. 5G is here, not in a big way, but it's here.

2 years from today, 5G will add significant capacity to both the Individual subscriber and to the Home subscriber, right? The ability of the folks with a good 5G network to deliver home broadband on the wireless side will be there, perhaps in two years, perhaps in three years.

So the question to you is, what is the role of Converge in that market scenario because it will come.

So on that note, thank you so much for listening, and we hope to see you in -- when's the next?.

November..

November..

And that concludes today's briefing. As always, should you have any further questions or clarifications, please feel free to reach out the PLDT Investor Relations. Thank you for your participation. Stay safe..