Philippines operator PLDT cut capex in the first six months of 2023 and reduced its number of 5G base stations by more than a third, as part of efforts to reduce network spending and achieve positive free cash flow.

In an earnings release, president and CEO Alfredo Panlilio said amid an extremely challenging macroeconomic outlook it forecast single-digit service revenue growth for the full year.

Capex in the first six months of the year fell 11 per cent to PHP40.8 billion ($727.4 million), with the capex to service revenue ratio dropping to 41 per cent from 48 per cent the year earlier.

Despite the number of 5G base stations being cut by 2,500 to 4,700 at end-June, 5G connections rose 84 per cent year-on-year to 3.9 million.

The operator in May said it stopped deploying new 5G base stations in early 2022 and was converting some sites to LTE as part of a network optimisation programme, following a massive capex overrun.

Net profit in Q2 grew per 22.4 per cent year-on-year to PHP9.5 billion, attributed mainly to a lower loss from its Voyager holdings compared with the previous year. Consolidation service revenue rose 1.4 per cent to PHP49.5 billion.

Mobile service revenue dipped 1.9 per cent to PHP23.1 billion, with voice and SMS down 19.4 per cent to PHP2.9 billion and 6.9 per cent to PHP1.4 billion, respectively. Mobile data revenue was flat at PHP18.4 billion.

Prepaid ARPU at mobile unit Smart Communications increased 4.8 per cent to PHP109, and post-paid fell 11.4 per cent to PHP691.

Post-paid subscribers increased 3 per cent to 2 million, while prepaid subs dropped 5 per cent to 59.9 million, due mainly to the government’s SIM registration drive.

LTE and 3G sites remained stable year-on-year at 38,800 and 17,000, respectively.