PLDT says $500-million subsea cable project still under discussion

PLDT Inc. says the proposed $500-million nationwide subsea fibre-optic cable project remains under discussion as construction costs, investment returns and demand are assessed. The company is also prepared to pursue the IPO of VITRO REIT once market conditions become favourable, with the earliest wi

PLDT Inc. says the proposed $500-million nationwide subsea fibre-optic cable project involving Globe Telecom Inc. and Converge ICT Solutions Inc. remains under discussion as construction costs, potential investment returns and demand are being assessed. PLDT Senior Vice-President and Enterprise Business Head Patricio S. Pineda III told reporters on the sidelines of a forum last week that the underlying demand for the project continues to be there, noting that the Philippines punches above its weight in terms of digital usage.

In August, the Department of Information and Communications Technology said the three telcos had proposed a $500-million (about P30.63-billion) nationwide subsea fibre-optic network. The proposal involves laying subsea cables from Batanes to Palawan, with connections extending to the Visayas and Mindanao, intended to improve connectivity between islands and expand telecommunications infrastructure in underserved areas.

Mr Pineda said the companies need to figure out the build costs and the ability for the investment to recover, adding that he hopes return-on-investment figures do not get too much of a hit. Demand from enterprises and government agencies would also be an important consideration, with the macro question being how soon companies and the public sector are able to pull the trigger on big projects and spending.

Mr Pineda said economic uncertainty could affect investment decisions, although demand for digital transformation could encourage companies to proceed. He noted that if conditions are uncertain and there is softness in the economy, spending is more controlled, but when digital transformation becomes a strong business case, there is incentive to proceed in order to be ready when the economy picks up.

Separately, Mr Pineda said PLDT remained prepared to pursue the planned initial public offering of VITRO REIT Inc. once market conditions become favourable. In October, PLDT announced that it had deferred the proposed IPO to 2027, citing prevailing market conditions and rising interest rates. Mr Pineda said he hopes for a favourable correction entering the year, with the earliest window being the first quarter of 2027.

VITRO REIT is the proposed real estate investment trust vehicle for PLDT's data centre assets. VITRO, the data centre business of PLDT subsidiary ePLDT Inc., operates 11 data centres nationwide with a combined capacity of nearly 100 megawatts. Mr Pineda also said demand for PLDT's enterprise services remained strong, including interest from hyperscalers, and that the weaker peso could have mixed effects, benefiting dollar-denominated revenues while increasing the cost of imported equipment.