GLO, TEL, DITO: Which Telco Is the Best Investment Today? | Intelligent Investing
SE Financials telecom analyst Paulo Manala discusses the Q1 2026 performance of Philippine telcos (Globe, PLDT/TEL, and DITO), highlighting Globe's strong momentum in mobile and broadband, DITO's continued subscriber growth despite profitability challenges, and PLDT's sustainable dividend supported by asset monetization plans. The analyst also addresses upcoming IPOs for GCash (valued at $8B) and Maya, positioning Globe as the top sector pick due to its growth catalysts.
Summary
In this episode of Intelligent Investing, analyst Paulo Manala examines the Q1 2026 performance of the Philippine telecom sector, which saw marginal earnings growth of only 1.2%. The three major telcos showed divergent performance: Globe posted growth driven by both core business and GCash stake contributions, while Converge and PLDT faced operational headwinds. In the mobile segment, Globe maintained strong subscriber acquisitions (10% growth in Q4, sustained into Q1), and DITO continued its momentum with 20.5% subscriber base growth, gaining 1 percentage point in market share to reach 9%. PLDT reported flattish mobile revenues, attributed to weaker consumer demand due to higher oil prices and economic headwinds. Manala suggests DITO is attracting price-sensitive consumers during inflationary periods, while Globe targets the higher-end market and PLDT's base is more vulnerable to economic downturns. However, DITO remains operationally unprofitable with 200 billion pesos in debt, 5 billion in annual interest payments, but only 800 million in quarterly cash generation—insufficient to cover interest expenses. In the broadband segment, Globe grew revenues 6.3% due to a low-base-effect recovery and declining fixed wireless losses, while PLDT and Converge posted flattish growth. PLDT faced system migration bottlenecks and typhoon-related assistance that reduced ARPU by 10%, while Converge struggled with ongoing manpower shortages affecting fiber acquisitions (down 20% YoY) and elevated churn in its FiberX business. Regarding dividends, Manala maintains confidence that PLDT's nearly 9% dividend yield is sustainable due to asset monetization initiatives including a REIT listing (raising ~20 billion pesos to reduce debt by 8-9%), potential copper asset sales, and the Maya IPO. GCash earnings rebounded strongly to 1.9 billion pesos in Q1 (95% of its peak), recovering from the BSP's 2024 delinking order that banned its use for online gaming. The recovery is driven by core merchant and transaction volumes rather than gaming, with GCash now representing 40% of Globe's core profits. GCash is set to IPO later in 2026 at an $8 billion valuation (approximately 20x PE), with Globe holding 34% and Ayala holding 8%. Maya, which contributed 285 million pesos (double YoY) to PLDT's profits but only 3-4% of core earnings, is also planning an IPO at $3-4 billion valuation with a dual US-Philippines listing. Manala recommends Globe as the top sector pick due to attractive valuations (12x PE), strong core business performance, and GCash as a significant growth catalyst and valuation uplift opportunity, while PLDT is better positioned for income-focused investors despite sustainable dividends. DITO remains a speculative play awaiting investor clarity, and Converge requires monitoring of execution risks.
Key Insights
- DITO gained 1 percentage point in mobile market share to reach 9%, driven by 20.5% subscriber base growth, but remains operationally unsustainable with 200 billion pesos debt, 5 billion annual interest payments, and only 800 million quarterly cash generation—insufficient to cover interest expenses.
- GCash earnings recovered to 1.9 billion pesos (95% of peak) in Q1 2026 after the BSP delinking order banned online gaming use, with recovery driven by core merchant and transaction businesses rather than gaming, now representing 40% of Globe's core profits.
- Globe's mobile subscriber acquisition of 10% in Q4 2025 continued into Q1 2026 despite market maturity, while PLDT's flattish mobile growth is attributed to weaker consumer sentiment due to higher oil prices, with DITO capturing price-sensitive customers during inflationary periods.
- PLDT's asset monetization program—including a REIT listing raising 20 billion pesos to reduce debt by 8-9%, potential copper asset sales, and the Maya IPO—supports dividend sustainability at nearly 9% yield despite growth headwinds.
- Globe is valued at 12x PE with its core business trading at 6x PE after removing the GCash stake; the GCash IPO at $8 billion valuation would unlock value and likely provide positive valuation uplift to Globe stock, making it the analyst's top sector pick over PLDT.
Topics
Transcript
[0:00] So for for Globe uh I guess you could uh contextualize then its home broadband uh uh revenues now it's it it's in a recovery phase because obviously for the longest time its home broadband was one of its weakest segments compared to obviously convergent >> but then during this period uh it kind of reversed that it it's the only one that posted you know this growth >> my low base effect >> yes there's a there's a low base effect that's uh helping uh globe uh post [0:33] growth year on year. >> Hi everyone, I'm April Lean and welcome back to intelligent investing market [music] talk series. For many investors, telecom stocks are stable dividend plays.…
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