Linear Relationship
Linear Relationship
Linear Relationship
Case Study
DITO Telecommunity, the 3rd player in the Telecommunications industry at present has official name as
DITO CME Holdings Corp.
The telecommunications company was formerly ISM Communications Corporation (ISM), where it was founded as a
mining company in 1925 Itogon-Suyoc Mines, Inc. and from there it ventured to IT, multimedia.
DITO was considered a holding company since 2016 but on December 2019, it acquired Udenna Communications
Media and Entertainment Holdings Corp. o simply Udenna CME.
Its Board of Directors are composed of 9 members where Dennis A. Uy as the Chairman and the same time as
President and CEO. Some of the Board members are also having dual functions as Treasurer Cherylyn C. Uy, CFO
Joseph John L. Ong.
The company posted with 78.174 billion market capitalization and outstanding market shares and issued shares of 14.035 billion and
as we know for utilities it can only allow 40% foreign ownership. The common stock is at average of 5.88 as of November 2021
This is the latest data of its listing in the Philippine Stock Exchange (PSE).
From the financial report of DITO last year, they have 3.993 billion of current assets compared to the present 4.136
billion of current assets. Though they are still not operating in full scale, the company posted retained earnings of 899
million.
The company current net income is 71.65 million which can still change since the present year has not yet ended
compared to last year that they are on net loss of 34.89 million. (PSE Edge)
When the company officially opened this March 2021, it started with 11.38 per stock but fell at its closing at P9 per
stock.
The current setup of DITO’s ownership where Dito Holdings owns 60% of DITO Telecommunity and 40% is owned by China Telecom.
(Rivas, 2021, Rappler)
DITO CME Holdings stocks were falling over the months due to market sentiment and this is due to
its current plans of expansion.
The stock prices went down by 36.9% and this was posted last July 2021.
The new telco was able to build 3,000 towers as of July’s report and it is
planning to complete 4,500 cell towers by December 2021.
From last July 2021 stock price analysis, Dito stock price were between P7 to
P8.15. (Tirona, 2021, Business World)
Vision
To digitally empower the nation and connect Filipino communities
Statement of
the Problem
DITO CME Main Problem
1.1 Management - From the management plans since they were only given the privilege to start his
March 2021, the company is targeting local businesses to embrace digitalization.
DITO partnered with SAS on creating managed analytics unit calls Unalytics.
Though this is a brave move, the initial target are the top companies in the country
but also will cater other businesses. (Mercurio, 2021, PhilStar)
Another move by DITO CME is setting up data center in Clark to accommodate global technology
companies. The company said that they are still negotiating with foreign partners.
Acquiring land assets is part of their plans and the ground breaking was made April 2021 in Clark
Global City. Where they plan to become data hubs for Hong Kong and Singapore was becoming an
over-invested region for data centers. (Balinbin, 2021, Business World)
1.2 Financial - Based on the DITO financial perspective, the company is facing loses of P1.8 billion
compared to last year profit of P15 million. Though there is bias on the comment of the newsletter since
the company was only approved to operate last March 2021 and still expanding, the numbers though
don’t lie that the company is experiencing great losses even before the year end this 2021. (Merkado
Barkada, 2021, PhilStar)
1.3 Marketing - DITO is promoting managed analytics with Unalytics, Acuity Global which provides
media planning and buying and Luna Academy for online education platform.
The 3 business units are still new and the total subscribers are still at 3.5 million and they are
planning to meet 4.5 million mobile subscribers.
The company is planning to capture the market for the coming Philippine Election next year with the
political ads. From here we can see that there is very little or low investment on marketing for the 3rd
telco player in the country. (Balinbin, 2021, Business World)
At present the company is trying to tap the Udenna Group’s extensive retail store and establishments
which includes its contractors for tower construction. DITO also used Phoenix Petroleum as major
distributor of its products which comprises 700 gasoline stations nationwide. (EDD, 2021 , Science and
Digital News)
From here we can see that it is still not tapping other major retail establishments, malls, convenience
stores and even setting up digital experience outlets like its competitors.
As of November 2021, Dito is planning to raise funds by offering P8 billion of new shares to add to
existing shareholders. The move is currently pending with the Securities and Exchange Commission
(SEC) and Philippine Stock Exchange (PSE) where they plan to offer around December 2021.
The expansion is to fund the capital expenditures of the telco business as a whole and other digital
businesses. (Dumlao-Abadiilla, 2021, Inquirer)
1.4 Operations - DITO Telecommunity Corp. launch last March after it was granted franchise to operate
did face issues like any other companies like network limitations, SIM card incompatibility, etc.
The new telco chose this strategy for their systems are running on 4G or 5G systems which is more
advanced compared to legacy systems of Globe and PLDT-Smart.
The company expanded initially in Visayas and Mindanao which contradict their aim for the said
region have fewer subscribers that are able to buy smartphones for their Dito SIM cards. (Manila
Standard, 2021)
Since the company franchise was approved by the Executive Department and then by the Congress
which include the Senate this March 2021, the company is expanding rapidly to meet the expansion
requirement imposed by the government which is to compete with the existing 2 telecommunications
companies PLDT-Smart and Globe Telecom.
From the start of the first quarter, the company did not cease to expand, where the company posted
P1.75 billion losses during the nine-month period for its operations. The company have expanded the
cellular tower network by setting up 3,300 towers and planning to complete 4,000 towers within the
next 12 months. (Mercurio, 2021, The Philippine Star)
Other than rolling out its projects to meet the licensing requirements, the company also posted other
charges of P1.340 billion and from here Dito posted P2.808 billion of losses due to its operations
expansion. The scope of its present expansion is not to belittled for the company were able to have
presence in 340 cities and municipalities and 3,300 towers built in just 9 months. (Abadilla, 2021,
Manila Bulletin)
2. What are the challenges encountered by the respondent company during the pandemic and how
affected they are:
The company recently went public this March 2021 so it is very early to know on how the company
is affected by the pandemic.
Telecommunications has high demand these days due to work from home opportunities provided by
companies as advised by the government and online classes for the students to be able to study while
at home which in turn increased the internet subscription, there is a surge of usage of internet services
since the pandemic.
Where this year there was an increase of 4.2 million internet users in the Philippines which
contributes to total of 67% of Filipinos having internet connection as reported by NTC.
There is an estimate of having 80% of internet users for Filipinos by 2025. (Magahis, Santua, 2021,
Manila Standard)
2.1 Internal Factor Evaluation Matrix (IFE) - The IFE is a strategic formulation tool that summarizes the
major strength and weaknesses of a business. (David, Strategic Management Concepts, cited in MBA
Knowledge Base)
Where 4 is the highest in rating.
The total weighted score DITO CME for the table above shows that the company has weak
internal status and its weaknesses are major in the company’s decline and performance on this half
year of expansion. Due to the negative factors of being somewhat partisan to the president and
the major shareholder is Chinese and also too much expectation from the new
telco player, the strengths are not enough to overcome the weaknesses.
DITO Online Market still needs work, for they have few options for the consumer on availing their
services.
The company geographical coverage still need work for their scope is still not available
nationwide.
The new telco hasn’t partnered with international telco unlike the existing competitors which
need work to allow roaming and other vital partnerships.
DITO Telecommunity is also looking into offering broadband services other than the cellular
internet services they initially offered. (Cordero, 2021, GMA News)
As of November 2021, Dito claimed that they have 4 million subscribers and planning to hit 5
million by end of the year. (Mercado Barkada, 2021, Philstar)
The findings of this study will redound to the benefit of the society considering that internet plays
an important role in every day of our lives, and be informed about DITO
Telecommunity as the third service provider in the Philippines. Moreover, this paper can serve as a
related literature for future researchers who plan to explore the same thing.
Methodology
Competitive Analysis
Globe is one of the country's leading telecommunications companies, whereas DITO Telecommunication is a startup
that plans to establish commercial services.
Globe Telecom Inc is a telecommunications company that offers a variety of integrated services. Wireless and
landline communication services are provided by the company. Globe Telecom provides postpaid plans, mobile data plans,
prepaid promotions, mobile internet, online shopping, and broadband services. It offers a wide range of services via a
network of retailers, distributors, suppliers, and business partners. Globe Telecom also provides broadband services to
residential consumers. The organization caters to a diverse spectrum of small and medium-sized businesses, industries, and
commercial enterprises.
Strengths Weaknesses
- Technology, wider coverage and profitability - Startup business
- Cutting-edge fiber-optics technology, 3G, 4G, LTE
- High Growth Rate
- Huge demands of Telecommunications subscribers
Opportunities Threats
- New acquisitions, mergers, joint ventures or associates, - Intense competition, government regulations and
globalization, increasing demand for internet services and environmental risks
network expansion - Regulation of the Telecommunication Industry by National
- New technological products in the market Telecommunication Commission
- Value-added services - Heightened competition
- Increasing demand for mobile banking - Availability of substitutes
Data Analysis
To recover from the losses in competing with existing Telecommunications Companies like
PLDT Smart and Globe Telecom, Dito has to partner with various companies.
Dito Telecommunication should also have a better marketing strategy to achieve its ambitious
goal and secure nearly a third of the market.
Strengths
The company has rebranded itself to DITO Telecommunity though it has overcome the issues of gaining
franchise and approval from the government, it is not enough to lift its image since the company just started
this year. Its opening to the market faced some issues and did not fully capture the excitement like other
foreign brands on its launch like Samsung Galaxy, Apple iPod/iPhone though they are products, not the
company itself but still can be considered its strength being as as the upcoming third telco player.
Being customer oriented is still far from the expectation of many where there are many questions of
consumers but are not easily addressed due to very minimal presence and marketing done from its initial
marketing launch but due to some expectations of the consumers, it still could be considered the company
strength.
Portfolio, financial position, diversified business operation can be considered their strength for the portfolio is
increasing, the company has financial backing and Dito will be doing ground breaking for their data center hub in Clark this
year but we can expect more possible in a year or two.
The company’s advance mobile network is also part of the company strength for instead of starting with legacy systems
of 2G or 3G, they are setting up 4G and 5G unlike their competitors which are still upgrading their legacy mobile networks.
Their national coverage is also their strength since their presence is gaining attention but Dito still expanding for they
only started this first quarter present year.
Threats
There is no contest that the existing telecommunication companies in the Philippines has an edge
compared to the new player Dito which shows that there is pressure especially from Smart-PLDT.
Joachin Horn of Smart said in March 2021 that Dito is far to reaching the present competitors where then
Dito has 1,900 cell sites. PLDT Chief Revenue Officer Alfredo Panlilio said that PLDT invested almost P88
to P92 billion on 5G , 4G and fiber this year and still ongoing. (Cordero, 2021, GMA News)
Thank you!