Dito Telecommunity [DITO 3.78 1.89%] [link] said that it had hit 12 million subscribers as of August 26, and that it had done so three months ahead of its initial goal of doing the same by the end of 2022.
In the same press release, DITO attributed part of this rapid subscriber growth to the “speed of its network” as evidenced by the 5,500 cell towers that it has constructed. DITO clarified news reports to confirm that it has projected to be profitable by 2026, and EBITDA-positive as early as the end of 2024.
DITO also clarified that a potential sale of a portion of its stake in Dito Telecommunity is “always a business-driven option available to any investor desiring to raise liquidity”.
MB BOTTOM-LINE
I haven’t seen a more on-the-nose fact pattern since my first year of law school: DITO has more than 5,500 cell towers, needs to raise significant capital, and DITO’s competitors have established a vibrant market for sale-leaseback cell tower transactions.
If DITO achieved similar terms to what GLO and TEL negotiated, it would be able to raise more than P67 billion.
That’s really rough math based on the valuations that GLO and TEL received on their established, mature cell sites.
Are DITO’s cell sites similar enough to that to command a relatively similar price?
If so, I can’t see why any significant equity holder would entertain a stake sale instead of a tower sale-leaseback.
Sure, that amount is not enough to fund its medium-term capex needs (more than P230 billion over the next 2 years), but that’s a healthy chunk of low-risk money that wouldn’t have to come at the cost of points off future earnings for DITO shareholders that have purchased shares specifically for the potential long-term payoff of DITO succeeding in the telecommunications business.
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