Al Panlilio, President and CEO, Smart Communications; and Chief Revenue Officer, PLDT

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On adapting data and communications services for the post-Covid-19 context 

In what ways has the pandemic impacted corporate performance and strategy? 

AL PANLILIO: We have an optimistic view of the second quarter of 2020, as we have seen our revenue continue to increase both year-on-year and quarter-on-quarter. On the consumer side, we have witnessed a significant uptake of data services, while on the enterprise side, the biggest challenge is that many businesses are closed and are requesting reprieves for their monthly billings. However, this period of disruption has also meant that digitalisation is accelerating. Within the PLDT Group, we often say that we are in the business of nation-building. This has never been more true than it is today: our services have really come to the fore across many industries. 

When enhanced community quarantine (ECQ) began, business process outsourcing (BPO) companies remained keen on technology investments. The BPO industry, which plays a major role in the Philippine economy, was grappling with how to provide work-from-home solutions for most of its agents. We saw a tremendous connectivity uptake in April: the demand for our wireless offerings shot up by about 400% in the first two weeks of that month. 

E-health is another segment with considerable potential. A group that owns 15 of the largest hospitals in the country – some of which already had their own e-consultation platforms – still required us to look at better ways to implement telemedicine and e-health solutions beyond Covid-19.

E-learning is also a promising area, but it presents a number of issues. There are 32m students and 1.2m teachers across 80,000 schools in the country, which are now faced with the challenge of education continuity. We are working with the government to determine how we can bring education to public school students through connectivity and video conferencing, either via synchronous or asynchronous learning. 

How well prepared was PLDT in terms of digital infrastructure and service provision to adjust to this disruption in the market?

PANLILIO: In terms of connectivity, we were well prepared because we had already expanded our core network. 

However, we had issues with the availability of devices, such as pocket Wi-Fi devices, which mostly come from China. Distribution of supply was also challenging due to travel restrictions and lockdown measures. Our team pulled together to help Filipino companies, and even our relationship managers went out to deliver these devices personally. This really exemplified bayanihan, the Filipino term for helping each other during times of crisis. 

Internet traffic has shifted from the central business district to more residential areas, and we are continuing to monitor capacity on a daily basis. Our networks are managing the current capacity: third-party results from Open Signal and Ookla report that we are still the fastest network, and we are making every effort to keep it that way. 

To what extent have your infrastructure and capital expenditure plans shifted?

PANLILIO: We are still targeting 5G implementation, although our most recent disclosure reported that this is likely to be delayed to the fourth quarter of 2020 or the first quarter of 2021. For capital expenditure, we advised our investors that this will be lower when we disclosed our first-quarter results. This is not due to a slowdown in spending, but rather a delay of projects. We are pushing hard to meet spending targets in preparation for the developments we seek to implement in the future, including 5G.
We recently announced that we will build a new submarine cable together with the Asia Direct Cable consortium. This is set to help us address the growing demand for digital services from both business and individuals within Asia Pacific.

Looking ahead to the recovery period, what do you identify as the most promising opportunities for PLDT?

PANLILIO: Data remains the primary driver of growth on the consumer side, so ensuring a high quality of service is of primary importance. The home consumer segment, which concerns mostly fixed-broadband and fixed-wireless connections, also has large potential for increased uptake, as homes are now becoming schools and offices. The current situation has involved a unique level of cooperation between different business groups within PLDT. 

On the ICT side, we have seen a surge in uptake of data centre services, much of which is driven by e-commerce. In the first two weeks of ECQ we had close to 50,000 new connections. It was therefore very important for us to offer cybersecurity to the market. We began to offer three months of access to our endpoint advanced security service and three months of free access to our cybersecurity portfolio for hospitals, as we noticed that the health sector was the target of many attacks during the start of ECQ.
Post-Covid-19, the services that we have provided offer considerable potential for monetisation. However, at this point in time, metrics for our key performance indicators have shifted from revenue to service. The entire group is very much aligned with driving capabilities for the sectors that we expect will witness major shifts in the months to come. 

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