A copy of today's presentation is posted on our website. For those who have 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 Finance Officer; Mr. Joachim Horn, Next Generation Technology Solutions Adviser of Smart Communications as well as other members of the PLDT management team. At this point, let me turn the floor over to Mr. Panlilio to begin the presentation.

Thank you, Melissa. Good afternoon, everyone. I am pleased to share our unaudited financial results for 2020, which reflect outstanding performance in a challenging time. We achieved this through teamwork and dedication to our goals, staying focused on serving our customers and supporting our employees. This commitment was evident from our Chairman and VP, who were actively involved during the lockdown, reinforcing our dedication to our customers. Moving on to the key components of our success in 2020, the first pillar is people. Our approach was not only customer-focused but also employee-centric, ensuring the safety and well-being of our staff through initiatives like providing PPEs, vitamins, and medicines. We adapted to working from home while ensuring we could still serve our customers effectively. The second pillar involved how we worked during the pandemic. We leveraged technology to enhance collaboration, allowing us to make quicker and more agile decisions, which contributed to our success. The third pillar is brand affinity. We engaged customers through relevant campaigns to keep our brand at the forefront of their minds, aiming to enhance brand loyalty for both PLDT and Smart. The fourth aspect is our network and technology. Despite some initial hurdles during the lockdown, we managed to stick to our capital expenditure plans, maintaining nearly the same level as in 2019. Our network and technology teams worked hard to ensure service continuity and to keep us ahead of the competition in terms of capabilities and customer experience. Customer experience is the fifth focus. We aimed to be the industry benchmark and compared ourselves with other countries in the region, striving to offer a level of service deserving of every Filipino. Lastly, transformation has been a priority since 2016, with significant progress in both our technology platforms and processes. We have not yet finished this transformation journey. As a result of these efforts, we recorded net service revenues of PHP171.5 billion for 2020, marking the highest revenue in the company's history, with a growth of PHP13.8 billion or 9% compared to 2019, despite the pandemic challenges. A significant portion of this growth, 73%, was driven by data. Looking at the segments, Wireless was the frontrunner, with growth of PHP10.6 billion, reaching PHP82.7 billion, a 15% increase from 2019. Our initiatives like GIGA Life and GIGA Pro resonated with our customers, and we became the leading brand in prepaid services while also excelling in sports content. Home services also had a breakthrough year, totaling PHP41.4 billion, an increase of PHP4.3 billion or 11% from the previous year. The home segment has become crucial as people work and learn from home, and we have been focusing on enhancing operational efficiency, installation, and repair services. The Enterprise segment, although the most affected, still managed a 5% growth of PHP2 billion, supporting businesses of all sizes through this pandemic. We launched products like BEYOND FIBER and eHealth packages during the lockdown to assist our clients. In International services, despite challenges, we mitigated declines through existing partnerships and identified growth areas, although roaming impacts prevented us from recovering to 2019 levels.

Revenues for 2020 showed a solid 9% increase or PHP13.8 billion year-on-year. With that top line growth, our EBITDA increased by 7% to PHP88.8 billion for 2020, at a 51% EBITDA margin. We saw a bit of increases in the cash OpEx, inclusive of the provisions. Without the provisions, our cash OpEx would have been up by 8% instead of 11%. Depreciation and financing costs rose as a function of the increased investments we've been making behind our network. With all of that, our total core income came in at PHP28.1 billion, which is PHP1 billion or 4% ahead of 2019. Reported net income was up PHP24.3 billion, a PHP1.8 billion increase year-on-year. Just showing the revenues on a quarterly basis over the last 3 years: other than a dip in the second quarter during the early days of the ECQ, we've seen an acceleration in our quarterly momentum with respect to topline growth. We ended the year with PHP44.9 billion in revenues in the fourth quarter, which was 8% ahead of the same quarter in 2019 and 3% ahead of the third quarter. So that was the highest quarter for PLDT with respect to our revenues. Likewise, in terms of our full year revenues, we reached an all-time high of PHP171.5 billion after a 9% year-on-year increase. Data clearly led the growth for the PLDT Group, with data growing 18% across our Mobile Internet, Home Broadband, Corporate Data, and ICT businesses. Data now accounts for 73% of our total revenues. Domestic voice, SMS, and International voice have been in decline. But things like SMS and International voice now account for smaller percentages of our total revenues at 4% and 2%, respectively. This again shows the revenues and how they have grown over time. Data revenues have clearly led the way, with data revenues in 2020 being over four times the level in 2012. To recapture, again, our EBITDA grew by 7% on the back of higher revenues, offset by higher cash OpEx and slightly higher provisions. PHP88.8 billion for the year and 51% margin; with higher EBITDA and some other higher income, we saw an increase in our core income, not exactly the increase in depreciation and financing expenses. For our EBITDA, the PHP88.8 billion is also an all-time high. We show here the development over the last few years from PHP68 billion to PHP83 billion to now PHP88.8 billion for 2020, at a quarterly average of about PHP22.2 billion a quarter. With respect to our telco core income, that came in at about PHP7 billion per quarter. So aggregated to PHP28.1 billion for the year, higher from 2019 by 4% or PHP1 billion. We do have quite a number of one-off nonrecurring items that were booked in 2020, showing some of the key ones. We had a gain on the plus side and a gain on the sale of our Smart headquarters. On the minus side, we had another round of manpower rightsizing with a one-time MRP charge of PHP2.6 billion, and we did recognize accelerated depreciation for the remaining copper facilities we have, given our plans to fully migrate copper to fiber, as well as we took a view on shortening the life of our 3G assets. Today, the PLDT Board declared a final dividend, equivalent to PHP40 per share, which adds up to PHP78 per share when you compare to the interim dividend of PHP38. That's a 60% payout based on the core earnings of PHP28.1 billion or a core EPS of PHP130 per share. On the balance sheet side, we're pleased to report that our net debt-to-EBITDA ratio was at 2.05x at the end of the year, a healthy gearing level given the higher CapEx requirements. Even when you pro forma the cash dividend payout or the final dividend declaration, the net debt-to-EBITDA ratio would be roughly 2.14x. Debt maturity is fairly well spread out. In terms of FX exposure, only 6% of our debt remains unhedged, and then 15% are closing rate. Average interest cost is 4.66%. I'm also pleased to note our USD 600 million U.S. bond issue that we did in June 2020 was made by IFR as the Philippine Capital Deal of the Year. Initially, we had guided that the CapEx may be lower because of the restrictions we faced during the lockdown period. We're pleased to note that at the end of it all, we were able to come in very close to the 2019 CapEx accomplishments, PHP71.9 billion, largely focused on the technology side of PHP56.6 billion, but also about PHP10.5 billion directly related to business requirements, particularly on the install side. For 2021, our guidance is at PHP88 billion to PHP92 billion CapEx investment for the year, with key targets we spell out here: a 5G rollout of over 2,800 base stations; introducing 4G to over 4,000 base stations; additional ports for fiber of 1.7 million; and an additional 125,000 kilometers of fiber. We continue to invest behind our data center capacity to serve the growing hyperscalers' demand. Some of the key highlights from a network standpoint, you've seen here that we've been able to roll out and grow our network across various metrics notwithstanding the pandemic. Homes passed, 9 million homes passed at the end of the year with over 4 million ports available for home broadband and enterprise broadband. Our fiber footprint is 429,000, unmatched by any competition in the country, and we're adding another 125,000 kilometers to this number this year. We continue the rollout for 4G as well as 5G. The 5G now has over 1,400 5G base stations as of the end of February, and that's a growing number as we speak to date. In terms of coverage, we cover 96% of the population of the Philippines with our wireless networks and 48% have our fiber broadband network. Devices; we're seeing that increasingly, people are shifting to LTE 4G, with 74% of the base using 4G now, and that is a number that continues to increase. The dependency on 2G and 3G is diminishing. At this point, let me turn you over to Mr. Pangilinan for the latest news for 2021.

Thank you, Anabelle, and good afternoon to all of you. Starting with our revenue expectations for 2021, overall, service revenue is expected to grow by high single digits for the year, broken down roughly as follows: for wireless revenues, we expect high single-digit growth for 2021; for home revenues, we expect high double-digit growth; and for Enterprise revenues, high single-digit growth for the year. The decline in revenue for international would be modest starting 2021 and will likely continue to be modest in the coming years. It is not positive, assuming travel resumes, and we can regain our growth in our roaming revenues. CapEx is expected to be around PHP90 billion, PHP88 billion to PHP92 billion, roughly PHP90 billion for the year, higher than the PHP72 billion we spent in 2020. Telco core is targeted to be between PHP20 billion to PHP30 billion, leaning more towards PHP30 billion as set by management. The good news is that we are prepared to increase our dividend payout by 5% or to 65% of our telco core, as we use this to compute our dividend payout basis. That summarizes our prognosis for 2021, and I think we're ready for your Q&A.

We're now ready to take your questions. The first set of questions came from Carlos Angelo Temporal of APS. His first question is whether PLDT is considering utilizing low orbit satellite broadband technology in light of the recent news about Converge reportedly negotiating with SpaceX to start satellite broadband.

Yes. We are talking to various companies which are currently emerging in the industry. Not only just this year; we have been in talks for the past 1.5 years with various companies. Low orbit is an interesting technology; I personally believe it has been blown out of proportion in terms of what they really can do. It’s fantastic technology for covering those areas we cannot serve with our terrestrial technologies. In fact, PLDT has been a satellite capacity provider for the longest time with our Visa services to various industries, including maritime businesses. We understand that business very well and we are actively looking into it.

Next question. Globe subscribers continue to decrease, particularly TM subscribers. While TNT appears to be absorbing most of the increase in subscriber count. With that, are there particular areas where the room SIM take up for TNT or even Smart are significant?

For the value brand TNT, we've actually seen growth for the brand across all areas, except for the PCPs and NCR. A significant growth is observed in Visayas and Mindanao. In terms of the business, the growth in revenues is driven by the adoption of data among this particular segment.

The next question: What's the level of DE or net debt-to-EBITDA that management is comfortable with?

Yes, we ended the year a little over 2x. We've always indicated that we're comfortable with a 2x to a little above 2x net debt-to-EBITDA ratio. That remains management policy.

And the last question from Mr. Temporal: For comparability reasons, what is the current measure of tel's fiber footprint, excluding the last mile of fiber deployment?

As a total, the fiber length is about 424, which was the case by the end of last year. The last mile fiber footprint is about 250,000 kilometers. The rest is backbone, intermediate fiber, and various other elements like fiber base stations and so on. But I want to emphasize the way we built the network: the last mile fiber is as valuable and can be used for any service as any other fiber.

The next set of questions come from Bernese of Atrium. Could you share with us a trend in gross subscriber installations for wired home broadband in the fourth quarter compared to the third quarter? The number of 75.5 thousand average in September to December and the 100,000 target in 2021 mentioned in the disclosure, does it include wireless as well or only wired?

Only wired. That's only wired. You have to consider that in November and December there were a number of typhoons, which could have affected the numbers positively.

And Christmas.

And then the next question is: What is the monthly installation rate for wide home broadband in January and February of 2021?

Much better than the fourth quarter. Obviously, improving every month.

The next set of questions come from Miguel Sabidal of BPI Securities. PLDT team, thank you for the briefing, and congratulations on the results. Would you be able to provide color on what you saw in terms of consumer behavior in the fourth quarter, particularly in terms of basket size?

Jane, basket size?

The average basket size of the prepaid customer base has actually increased quarter-on-quarter in the same year of 2020. We saw the biggest basket size in December due to pent-up demand for storage for load. So it's pretty steady compared to where we are now; it still remains fairly steady.

The next question: Should we expect PLDT to continue with the higher data allocation for Mobile this year? Or are we going to see a gradual wind-down of the additional allocations?

Jane, you can answer. But I think we will continue to push for data.

Okay. Sir, if the question pertains to the data packs that we have, we have actually enhanced the data packs, our data offerings, beginning January of this year. The need for our customers' data solutions is becoming even bigger. At the start of the year, we launched free storage where we doubled the data allocation for the packs under the GIGA platform, GIGA storage platform, etc. We will be coming up with more free flow presentations in the coming months.

Next question from Miguel regarding the common tower policy. Could we get a sense of what we're seeing for the common tower policy on the PLDT side? How many tower providers is PLDT looking to tap this year? And how much of the new cell site builds for 2021 will come from common or lease towers?

Yes. Currently, we have 6 tower companies under contract, and we are in discussions with a few more. We may add 2 or 3 to that depending on their capability. We are looking at doing most of our new towers, which we have planned for this year and the years to come with those tower companies. If they are unable to do all of them, we will handle some ourselves. But the target is around 90% to 95% of those with the tower companies.

The next set of questions are updates on the network rollout progress of the third operator. How ready is it? And when is it expected to launch?

The launch date has been publicly communicated. We should not talk about this because we can't, but it's next week. What we heard is they have 1,600 sites, and apparently, they met the 37% population coverage. They are far away from the number of sites other operators have. We have 10,000 as tower pass. The public opinion was that this is not enough. You can relate the number of towers Dito has to the number of towers we have and derive your own opinion about it. They will face challenges in launching since they are far behind our coverage, at least. Initially, this will be a market better for them, but they will get better over time. We are not underestimating them, but they will struggle to get the network stable and provide reasonable service this year. The impact will be rather limited.

Another Dito question: How does PLDT plan to counter the plan of Dito starting to roll out in Mindanao and Visayas? Can you share more about current trends of internet markets in Visayas and Mindanao?

As far as we know about Dito's rollout in those areas, I think they are at about 25% to 1/3 of the number of sites we have there. They probably have chosen areas that are easier to roll out, and that’s the reason why they went more rural. But sooner or later, they will face the challenging rollout task, for example, in metro modern coverage, which is much more difficult to get sites for. But sooner or later, they will need to get there. I am sure about that.

I agree that Dito will get better, but TNT, the service, is expanding too. We will get better. We will get bigger. We are not afraid of Dito, to be honest. The concerns of analysts seem quite misplaced.

Another Dito question: What aspect of the business do you think has the biggest impact due to Dito starting commercial operations, and how will this affect the bottom line?

I think this concern is your concern. Yes, frankly, right?

Yes.

I mean, our CapEx this year will be PHP90 billion at least. So where are they? How far would they marginally catch up just on the network side?

The next question: Any partnerships, acquisitions, or other investments planned for this year?

On the horizon, we have been approached by foreign investors and operators on the data center side because it's clear that this is one of the hot investment items on investors' radar screens. We believe it's an area that offers significant potential for PLDT, particularly concerning our ability to attract hyperscalers and the shift that's happening on the Enterprise side moving from pure connectivity to solutions, building a layer of solutions on top of their ability to connect enterprises, both large and small. We would prefer, if we're going to do it, to allow foreign investors to come into our data center, which we think will provide significant gain either through dilution or divestment. We would prefer not to engage private equity investors because they only offer money and not the necessary expertise.

The next question: What caused the jump in depreciation as well as asset impairment in the fourth quarter?

As part of the year-end review process, we, of course, looked at some of the carrying values of our fixed assets, and we decided to shorten the lives of some of our fixed assets. This includes, as we highlighted, the remaining copper facilities because we have announced our plans to migrate all the copper customers to fiber. We have already begun the fiber overlay, with some completed in the next few months. So we depreciated, in full, the copper facilities. We have started shortening the life of 2G assets, now only one year left, and for 3G we are advising it will not last until 2024. We also reviewed other items in the network as part of our modernization program, where we took the opportunity to accelerate depreciation in the fourth quarter. One of the other items that affected us last year was higher provisions for bad debt because, as you might appreciate, collection rates were lower last year than our historical averages. We also considered the PFRS 9 expected credit loss analysis, which assessed expected credit losses and resulted in higher provisions for 2020. As the economy recovers, there will likely be a reassessment of those provisions.

Next question comes from Kervin Sisayan of Manulife. I want to clarify a question earlier. Is it correct that we are looking to provide more free promos and higher data allocation, going forward to address the growing demand? Are we looking to increase pricing or keeping it stable?

Jane?

I think we'll keep prices stable, but I think Jane has offered deep storage for all ages, which we did last year. But Jane, you might want to add to that?

So right now, we've enhanced the data packs. We doubled the passion allocations with the free storage for all packs. We are preparing further enhancements for the coming months. However, pricing adjustments will depend on need.

A follow-up question from Bernese of Atrium. I want to clarify again on the fixed wire broadband subscriber growth. In the fourth quarter, the net added subscribers versus the third quarter were around 79,000. Given that the monthly installs were an average of 75.5 thousand, may we ask what's causing the churn? And if PLDT has been seeing improvement in the churn rates going into 2021?

Joachim, you want to pick that question?

To answer the question, we did hold off. We had some special treatment for our customers, given the impact of the pandemic, to keep as many of our customers as connected for as long as possible. Some of that treatment concluded in the fourth quarter, which actually led to a slight increase in churn as we began managing those customers differently. In terms of overall churn, we are seeing churn. We have different technologies within our base. Our fiber customers are experiencing a good profile for churn. As we migrate our customers from copper to fiber, which we announced in August last year, we're seeing churn improve across the base.

Finally from Bernese, her last question: May I ask about the CapEx associated with migrating subscribers from copper to fiber and how many subscribers are left to migrate?

I think the number of subscribers left is around 400,000. As for CapEx, I just don't know.

That's actually embedded in our entire fiber rollout. For most areas, we have already built the fiber.

It's very synergistic because we use the fiber build also for new customers. So it's very difficult to isolate the migration itself.

There's another question on Dito. Can you share your expectations on ARPU with the entry of Dito?

Dito's ARPU.

Data package was announced over there.

Dito's ARPU will be 199 for 30 days today. Again, we cannot answer that question directly. What we can do is focus on what we can offer the market. Obviously, we'll be watchful of all the packages in the market, not only those from Dito.

I think one disadvantage Dito has is they are not launching 5G according to their own statements. While we are proceeding full blast on the 5G rollout, which will show our upward trend.

Next question is from Tekwani Morales. Congratulations on the results. You mentioned that you would be replacing all copper with fiber. When can we expect 100% of customers on fiber?

We plan to migrate the ADSL customers, which is the slow copper, during this year. By the end of this year, all ADSL slow copper is from China. For the faster copper, we have a relatively modern VDSL technology that will take another two years, depending on how far we are with our fiber overlay rollout. Regarding the fast copper, we will replace that up until 2023. However, they are already enjoying 30-40 Mbps, which is reasonably good speed and comparable.

And the last question we have in the queue: Can you confirm your core income for the full year 2020?

2020?

Apparently, there is a misunderstanding, right?

There's a different figure on Slide 37. So I will point to Slide 19 for the reconciliation of telco core income down to report. Otherwise, we will give the floor back to Mr. Pangilinan for his final words. There are no other questions.

Thank you very much for joining us in this briefing. Thank you for your questions. We will speak with you again when we announce the first quarter results on May 8. Let me just say that the first months of this year have been good. We are on budget with respect to results, revenues, and bottom line. February looks also quite good, with the first few days of March also looking good. We hope to bring you better news in the first quarter, assuming there’s no second or third wave of the pandemic. Thank you again, and I wish you all a happy Easter.

A podcast of this briefing will be available on our website after the call. That concludes our briefing today. As always, should you have any further questions or clarifications, please reach out to PLDT Investor Relations. Thank you very much. Stay safe.

Thank you.

Thank you.

Thank you.