PLDT Inc. (TEL) Earnings Call Transcript

All right. Good afternoon, everyone. Thank you for waiting. Apologies for that delay. Thank you for joining us today. My name is Jinggay Nograles. I'm the Head of Investor Relations here at PLDT. And it's my pleasure to welcome you to our first half 2026 financial and operating results briefing. So, joining us today to share insights into PLDT's performance and strategic direction are PLDT's Chief Operating Officer, Mr. Butch Jimenez; our OIC, CFO, Mr. Leo Posadas. We also have here with us SVP and Head of Consumer Home Business, Mr. John Palanca. We also have our Head or OIC for Smart Communications, Mr. Lloyd Manaloto; and our Chief Legal Counsel Attorney, Joan De Venecia-Fabul. We'll also be joined later by our other key officers for our enterprise business as well as our data center business. So before we begin, I'd like to remind everyone that we will have a Q&A session after the presentation. You may submit your questions via the MS Teams Q&A panel. Thank you also to those who have submitted the questions before hand and we'll make sure to address those during the call. So to start, I'd like to invite our Chief Operating Officer, Mr. Butch Jimenez, to walk us through PLDT's financial and operating report.

Good afternoon, everyone, and thank you for joining us today. I'll take you through PLDT's first half 2026 financial and operating results. For the first half, gross service revenues grew 2% to PHP 108.7 billion, while service revenues, net of interconnection costs increased 1% to PHP 97.8 billion. Growth was tempered by softer consumer spending in wireless and the lag revenue impact of first quarter installation constraints in home, partly offset by continued enterprise growth. Cash, OpEx, subsidies and provisions were broadly flat at PHP 41.7 billion, supporting EBITDA of PHP 56.1 billion and a stable 52% margin. Below EBITDA, depreciation and amortization increased 6%, reflecting our past investments in network and infrastructure. Telco core income declined 2% to PHP 16.6 billion, while stable financing costs, contribution from Maya and asset sales helped stabilize core income at PHP 17.3 billion. Overall, the business remained resilient with stable margins and continued financial discipline. Looking more closely at the top line. Consolidated service revenues were up 1% to PHP 97.8 billion for the first half. Excluding legacy services, revenues grew 2% to PHP 89.2 billion and now account for 91% of total. Wireless revenues were broadly stable at PHP 42.1 billion, with mobile data and fixed wireless access grew to PHP 38.7 billion. Home revenues were PHP 30 billion, down 1%, reflecting the revenue lag from the constraints we experienced in the first quarter. Enterprise remains our strongest growth driver, with revenues up 5% to PHP 24.8 billion, led by corporate data and ICT. So while overall growth remains measured, the mix continues to shift toward data and ICT services. Let me now take you through the performance of each of our major business units. Starting with wireless, where we saw an improvement in trends through the second quarter, wireless consumer revenues were PHP 42.1 billion for the first half, broadly stable year-on-year. Data and fixed wireless access revenues grew 2% to PHP 38.7 billion and now account for 92% of wireless consumer revenues. More importantly, the trajectory within the first half has improved. Monthly year-on-year top-ups moved from negative 3% in March to flat in April and May, and positive 1% in June. This brought wireless revenues back to roughly flat for the first half. The usage numbers back this up. Active data users reached 44.1 million. Data traffic increased 12% year-on-year to 3,273 petabytes and 5G devices increased to 12.5 million, now representing 21% of the device base. ARPUs also remained resilient despite the softer consumer spending environment. So, wireless started the year under pressure and is ending the half on firmer footing. A lot of that comes down to how we're approaching pricing and customer engagement. Let me show you what we're doing on that end. Two things are driving better monetization. First, we are being more deliberate on pricing, selectively moving some prepaid offers to higher price points while adding more data and benefits, so customers still see good value. For example, the selected prepaid offers moved from PHP 99 to PHP 109, with additional data in the package. Second, we are getting much better at engaging individual customers. Our hyper-personalized offers use each customer's behavior and usage patterns to make promotions more relevant. The results have been encouraging. App-based hyper-personalized offers are converting at as much as 5% versus around 0.2% for generic SMS broadcast offers. That's as much as 25x higher. These actions are helping us support higher spend while keeping ARPUs resilient in a softer consumer environment. Our network experience also remains a key strength. In OpenSignal's latest July report, Smart earned 8 mobile experience awards, with outright wins across gaming, voice apps, 5G upload and 5G coverage and joint wins in video. What's worth noting is that OpenSignal looks at coverage in the places people live, work and travel rather than simply measuring land area or population coverage. It is designed to reflect the coverage users can reasonably expect in their day-to-day lives. Smart's network performance was also recognized in Ookla Speedtest Awards for the first half of 2026. Smart was named the Philippines' Fastest Mobile Network, Best Mobile Network and Best Mobile Video Experience. Sharper pricing, better personalization and a strong network experience are giving us a better improved monetization. Turning to Home. Home revenues were PHP 30 billion for the first half, down 1%, with fiber also down 1% at PHP 29.4 billion. It's worth remembering how home works. It's a 99% postpaid business, so there's a natural 3- to 4-month lag between an installation and when it shows up meaningfully in revenue. Each new installation adds to the recurring revenue base, so the benefit builds as new subscribers accumulate. That's why the first half number still carries [Technical Difficulty] from the installation constraints we saw in the first quarter. The OSS migration showed how quickly customer orders were converted into completed installations. The good news is that we started seeing recovery signs in the second quarter as installation volumes picked up and postpaid net adds turned positive in May. On fundamentals, ARPU remains best in industry at PHP 1,330 for the first half, though down from a year ago. Blended churn is industry-leading at 1.8%, with postpaid churn improving to 1.4%. Lastly, fiber net adds improved to 97,000 in the second quarter, more than double the first quarter trend. Let me show you those operating indicators in more detail because that's really where the recovery story is clearest. You can see the improvement more clearly in the operating indicators. Postpaid installations increased steadily through the second quarter, with June reaching the highest monthly level so far this year. As installations throughput improved, postpaid net additions turned positive from May. Churn also remains well managed, with monthly postpaid churn at 1% in June. We also continue to strengthen the whole proposition beyond connectivity. Fiber Unli All brings fiber together with Cignal, HBO Max and Smart data in one package. The idea is to give customers more value from their relationship and support data engagement and retention. And we continue to improve the service experience. Store Genie, our AI-enabled frontline service tool helps our customer-facing teams resolve inquiries directly and much faster. Inquiry resolution is now around 10x faster. Ticket escalations have been cut by half and more than 61,000 hours of customer waiting time have been avoided. So the operating recovery is already underway as installations rebuild the recurring subscriber base. We expect revenues to follow with the usual lag. Let me now turn to enterprise, which remain our strongest growth business in the first half. Enterprise revenues increased 5% to PHP 24.8 billion, while corporate data and ICT revenues also grew 5% to PHP 18.4 billion. The mix continues to shift toward higher growth services. ICT revenues increased 22% in the first half, led by 35% growth in tech services. This more than offset the continued decline in legacy services. We are also seeing good growth across the underlying infrastructure base. Fiber lines increased 6%. SD-WAN lines grew 18%, and contracted third-party racks across our VITRO Data Centers increased 6%. A key part of the strategy is One Enterprise. We bring together PLDT, Smart, ePLDT, PLDT Global and VITRO to offer clients a broad set of solutions under one relationship. Increasingly, our wins involve more than one part of the group, combining connectivity with cloud, managed IT, cybersecurity and data center services. That breadth is reflected in the growth we are seeing across the different enterprise businesses. You can see that momentum across the different businesses supporting our enterprise customers. PLDT Global's enterprise revenues grew 30%, supported by hyperscaler and carrier demand for international connectivity, cable capacity and colocation. Smart's enterprise business grew 15%, driven by services such as A2P, GIDA, enterprise postpaid and IoT. ePLDT tech services grew 37%, reflecting continued demand for managed IT, cloud, cybersecurity and customer experience solutions. And VITRO Data Center revenues grew 13%, supported by enterprise, cloud and hyperscaler demand. What ties these businesses together is the ability to serve more of our customers' digital requirements from connectivity, all the way through to the cloud, cybersecurity and data centers. I'd like to spend a little more time on VITRO, where we see a particularly strong growth runway. VITRO data center revenues grew 13% in the first half, supported by demand from enterprises, the public sector and hyperscalers. Today, VITRO has approximately 34 megawatts of activated IT-ready capacity across its portfolio, making us the largest data center operator in the Philippines by live, colocation, IT capacity, and we have significant room to scale from here. The next 10 megawatts at VITRO Santa Rosa are targeted for activation by the end of this year. Beyond that, identified expansion opportunities across Santa Rosa, Clark and Cebu 2 could take total IT-ready capacity to 62.4 megawatts. That represents more than 80% growth from our current activated capacity. We also see a supportive backdrop for the industry. Executive Order 119 reinforces the importance of secure in-country, boosting for sensitive government data. More broadly, it strengthens the case for building digital infrastructure locally and could support further cloud and hyperscale investment in the Philippines. VITRO is well positioned for that opportunity given its track record, scale, nationwide footprint and its integration with PLDT's broader ecosystem. We are also continuing to build a platform through global standards. VITRO Santa Rosa is TIA-942 Rated 3 and LEED Gold certified, while S&P Global Ratings assigned VITRO a light green shade of green assessment. Turning now to operating expenses. Cost management remained disciplined in the first half. Total cash expenses, subsidies were slightly lower at [ PHP 47 billion ] despite continued investments to support the business. The main increases came from repairs and maintenance, up 3% and contract-specific service costs, which rose 26%, in line with higher project activities. Subsidies were also higher, reflecting our continued push to drive device adoption and customer engagement. These decreases were largely offset by lower compensation and benefits, selling and promotions and taxes and licenses. Overall, we were able to keep the cash cost base stable while continuing to fund areas that support growth and customer experience. This cost discipline helped preserve margins, which I'll discuss on the next slide. Turning to EBITDA. The semestrial trend shows a steadily expanding earnings base. EBITDA reached PHP 56.1 billion in the first half, marking the fifth consecutive semester of growth from PHP 53.9 billion in the first half of 2024. This has been supported by a combination of steady revenues and disciplined cost management. This allowed us to maintain EBITDA margin at 52%, broadly consistent with the levels we have sustained over the past several periods. Moving below EBITDA. Telco core income was PHP 16.6 billion, down 2% year-on-year, mainly reflecting the higher depreciation and amortization. Maya continued to contribute positively, with PLDT's share of core income reaching PHP 559 million for the first half compared with PHP 406 million last year. Maya's second quarter contribution was lower, mainly due to one-time accounting adjustments rather than a weakening in the underlying business. Excluding these effects, the contribution would have been stronger. We also recognized around PHP 0.3 billion from asset sales. These helped stabilize core income at PHP 17.3 billion. Reported income was PHP 16.4 billion, down 6% year-on-year. Losses in foreign exchange and derivatives, which moved from a net gain last year to a net loss in the first half of 2026. Overall, while higher depreciation weighed on telco core earnings, Maya asset sales helped cushion the impact on core income. Turning to CapEx. We continue to bring investment intensity down while maintaining focus on growth and network quality. CapEx for the first half was PHP 20.7 billion, down from PHP 27.4 billion last year. This brought CapEx intensity down to 19% of service revenues from 26% a year ago. We continue to prioritize investments that support growth and customer experience, including new cell sites, regional fiber core, AI, submarine cables and IT modernization. For the full year, we continue to expect CapEx in the mid PHP 50 billion range. Our objective remains the same, continue bringing CapEx intensity down over time while sustaining positive free cash flow and investing where we see the best returns. Turning to the balance sheet. Net debt stood at PHP 287.3 billion at the end of June, with net debt to EBITDA at 2.57x. We continue to manage the debt profile proactively with a well-spread maturity schedule. Only 3% of total debt matures in 2026, while more than half matures beyond 2031. Average debt maturity remains healthy at over 6 years. Our average pre-tax interest cost also improved to 5.05% from 5.43% at the end of 2025. Foreign currency exposure remains limited. U.S. dollar-denominated debt accounts for 14% of total debt, with only a small portion debt unhedged. PLDT remains investment-grade rated BBB by S&P Global and Baa2 by Moody's. Our focus remains on maintaining positive free cash flow and steadily bringing net debt to EBITDA towards 2x. Finally, on dividends, the Board declared an interim cash dividend of PHP 46 per share for the first half of 2026. This represents a payout ratio consistent with our dividend policy. PLDT continues to offer an attractive return to shareholders, with a trailing 12-month dividend yield of around 8% based on the June 30 share price. At the same time, we are balancing shareholder returns with a need to strengthen the balance sheet. Our focus remains on sustaining positive free cash flow, continuing our asset monetization programs and bringing leverage down over time. In the second quarter of 2026, Maya continued to scale its integrated ecosystem and remain profitable. Through one platform, Maya enables consumers to save, borrow and transact while helping businesses accept payments, manage cash flow and access financial solutions. This integrated model creates strong network effects across consumers and businesses, reinforcing Maya's position as the Philippines' leading digital bank and merchant acquirer. Maya sustained strong growth across both digital banking and payments. As of end June 2026, Maya's deposit balance reached PHP 86 billion, while loans outstanding rose to PHP 39 billion. In merchant acquiring, Maya accounts for 53% of POS terminals nationwide as of December 2025 based on BSP industry data and Maya's corresponding regulatory submission under the same reporting definitions. On digital banking, Maya deposit balance grew 71% year-on-year, while loans outstanding increased 56% year-on-year, reflecting continued demand for its savings and credit products. The loan-to-deposit ratio stood at 45%, supporting the continued expansion of the lending portfolio. Asset quality remained stable with gross NPL ratio of 4.8%, while annualized net interest margin stood at 17.3% for the first half of 2026, reflecting strong lending margins. Maya expanded payment flexibility for consumers through Maya Mini Payments, which allows Maya Credit Card users to convert any purchase into monthly payments without acquiring a merchant tie-up. For businesses, the new Maya Business App brings together payments, banking, lending, cash flow management and business insights and analytics in one app for the MSMEs. Maya also enabled Apple Pay acceptance through Maya Terminals and Maya Checkout, giving Apple Pay users a simple, secure and convenient way to pay at Maya-powered businesses in-store and online. These products and services demonstrate how Maya continues to innovate across both the consumer and business sides of its civic relevance. On sustainability, we continue to strengthen the depth and transparency of our reporting. As supplements to our 2025 Annual and Sustainability Report, we published 5 focus reports covering business continuity and network resilience, gender equality, human rights and environmental due diligence, just transition and materiality and impact assessment. These reports help convey an even more holistic corporate narrative for PLDT. PLDT continues to participate in industry forums and thematic discussions covering areas such as finance, accounting, human capital, child protection and nature-based sustainability. These platforms allow us to share what we have learned, exchange best practices and contribute to the broader conversation on integrating sustainability in the business. To wrap up, the first half showed a resilient performance despite a softer operating environment. Wireless trends improved through the second quarter. Home's operating indicators are moving in the right direction and enterprise continued to deliver solid growth. At the same time, disciplined cost and capital management helped us protect margins, strengthen cash generation and maintain our focus on deleveraging. We believe these trends give us a firmer base as we move into the second half of the year. With that, we thank you for your time, and we're happy to take your questions.

Thank you very much, Butch, for that presentation. And before we open the floor for your questions, let me just acknowledge the presence of some of our other key officers here. So, we have also with us SVP, Blums Pineda, who heads our Enterprise business. We also have Attorney Marilyn, our Corporate Secretary. Thank you for joining us as well. [Operator Instructions] So, a number of you have sent in your questions before the meeting started. So let me go ahead and ask those questions. This first question is from Marky Carunungan of F. Yap Securities. This question is for our mobile business. So, you've highlighted the improvement in top-ups from negative 3% in March to positive 1% in June. How are you seeing July and early August trends? And do you now view the improvement as a structural recovery in consumer spending? Or are customers simply responding to the price and offer changes?

Thank you for the question. So the first part of the question is, are we seeing improvement in top-ups? For July, we're looking at roughly a plus 3% top-ups. In August, we're trending somewhere between 2% and 3%. And in response to the second part of the question, what part is structural and what part is driven by marketing interventions? Recall that around in March, we went down to minus 3%. April, probably around minus 2%. And then sometime around May, we saw an improvement in gasoline, the diesel prices, which actually positively affected mobility. So all told, if we were looking at the numbers, it seems that about -- from minus 2% to flat, that's driven by structural price improvements in gasoline prices. But from June, we saw plus 1%, July, plus 3% and roughly around maybe a plus 2% around August. So that roughly plus 2% is now driven by our interventions. So it's half structural and probably half driven by our marketing activities.

Thank you, Doy. Before I go to the next question -- apologies, before I start to acknowledge your presence here. We also have Viboy Genuino, President and CEO of ePLDT and VITRO, our data center business. So if you have questions for that side of the business as well, please feel free to ask him your questions. All right. So the second question is for our Home business. This is also from Marky Carunungan of F. Yap. Given that installations and postpaid net-adds have turned positive in May, should we expect the revenue inflection to become visible at around August or September? Or is there still a longer lag from the OSS disruption?

So yes, Marky, right?

Marky, yes.

Marky, thank you for your question. Actually, we're very encouraged by the leading indicators that we've seen. As we mentioned during the briefing, our installation rates went up to pre-disruption levels. We've also seen the conversion rates improve and the churn rates go down. So, all these factors will add to the compounding of the installed revenue moving from month-to-month to higher levels. Yes, we are encouraged to see this impact very soon. I'd like to say that it will be sooner than later, but we will see what the impact of this is. But I can say based on the initial figures that we're seeing that we will see near improvements for sure.

And as a follow-up to that, John, would you be able to share if there are any installation run rates that you need to reach for home to return to positive revenue growth? Or is this something...

Well, as a matter of principle -- Jinggay, thank you, Marky too. As a matter of principle, our net adds is really a function of our gross adds and our churn rates. And as long as we keep it on the positive side, this will compound. In fact, our challenge in catching up was really the shortfall of the Q1 disruption that carried over also compounded negatively into the first half. But we're seeing that we are now positive net-adds and an increasing rate at that. Also, we're seeing that the customers that we are acquiring are in the postpaid segment, which provides a much higher ARPU for us. So as long as we continue to do that for the balance of the year and moving on to the next year, then we should be okay.

Thank you, John. All right. Next question also from Marky. This is on Maya, and I'll be taking that question. So, Maya remains profitable, but its contribution to PLDT's core income was slightly lower both Q-on-Q and year-on-year in the second quarter. Is it because of non-recurring accounting adjustments? If you exclude those adjustments, how should we think about underlying earnings trajectory for Maya in the second half of 2026? And also as a follow-through to that question, with Maya's loan book up 56%, would that cause management to slow credit growth? And what early warning indicators would tell you that the current 4.8% NPL ratio is no longer sustainable? So just to address the Q-on-Q and year-on-year decline for Maya. So the movement in that is really not reflective of the underlying performance of the business, and it's really primarily due to certain accounting treatments of expenses and non-recurring expenses for the quarter, right? So definitely, if it were not for those accounting adjustments that are one-time, definitely year-on-year and both quarter-on-quarter contributions to PLDT would have been much stronger and positive. Now regarding the question about credit growth. So it did grow 56%. If you do look at the LDR loan-to-deposit ratios of Maya, which is published in the BSP website, it is still in the low-40s. So, there definitely is quite a bit of room to expand. And really, if you look at Maya, I mean, it really is hand-in-hand with the BSP and really pushing financial inclusion, right, in the Philippines. Now if we look at the credit quality of Maya, as well as the credit quality that is published by the BSP, based on that, Maya really hasn't observed any broad-based deterioration in credit quality. In fact, our loans -- Maya's loans continue to grow. Our NPLs continue to improve to 4.8%. And Maya really continues to monitor repayment behavior, portfolio performance and developments across the customer segments very, very closely. So, I think for now, they're at a comfortable position on that. Okay. So this next question is from Jojo Gonzales of Philippine Equity Partners. So, many thanks for sending ahead of the call. My questions are around the cost side. So, this would be for our finance team. OpEx appears to have outpaced the growth of revenue. Sorry, let me read that again. As OpEx appears to have outpaced the growth of revenue, especially in 2Q, specifically depreciation, interconnection and the cost of devices and accessories, what is behind the seemingly faster rate of growth of these items?

Sure. In terms of the depreciation, there have been investments predominantly related to the network, upgrading our core services. We also plan to build out in terms of the transport, as well as the core network and also to solidify our position. We want to make sure that our 5G coverage is better. And so we are increasingly focusing on that within the boundaries of our CapEx guidelines, which this year, we've signaled around a PHP 55 -- mid PHP 50s billion CapEx target for this year. But for us, that CapEx, which started and will continue in the second half has elevated some of the depreciation associated. And we have to invest to grow the business. I think the challenge for us is to be prudent in terms of our cost management, but also looking with a view towards pushing on and driving the growth in the top line. And so this is what we are focusing on, and we'll look to improve in the second half.

All right. So, this next question is from Michael Fernandez of Metrobank. I think this is in regards to CapEx as well. How much is CapEx spend in the first half of 2026? That should be in your slides. Is guidance for 2026 still in the mid PHP 50 billion plus levels? And what is CapEx guidance for 2027? How much of CapEx will be funded by debt?

Sure. So in terms of the CapEx, so as you saw last year, the CapEx for the first half was PHP 27.4 billion. This year, what we have done in the first half is lower than that, PHP 20.7 billion. And so from an intensity perspective, the CapEx intensity last year of 26% has reduced down to 19%. Why we are focused on that is the ability to then ensure the free cash flow generation. And so when we look at those measures, including, for instance, EBITDA less CapEx, then that's why we're showing the improvement that we have been able to do through the reduction. Now having said that, as I mentioned earlier, our target for the full year, though still remains in the mid-50s. And therefore, you would see an increase in the second half as we look to continue, as I mentioned, to support our network. We want better coverage. We want better quality in terms of our services that we provide across the board. And so we are going to be continuing our investments. Now in terms of guidance for next year, 2027, it's a little premature. But I think if we just -- the message here is we want to continue to maintain our discipline on CapEx. We are looking at very closely at the return on invested capital for the new CapEx that we're making. We want to make sure that that it's spent in the right areas that's needed, that will generate growth for our businesses as well in terms of the top line and provide an adequate return on that invested capital. And so for next year, I think we would look to continue to seek to reduce, if possible, from the PHP 55 billion below that. But in terms of the amount and the quantity at this point, it's too early to say.

Thank you very much for that. Okay. This next question also from Michael is for VITRO. So, Viboy, this will be for you. Can management provide an update on the proposed VITRO REIT transaction?

Yes. Excellent question. We're still targeting for a Q4 listing, but obviously, this will be subject to market conditions. We have done our cornerstone roadshow already internationally and locally. Interest has been very positive. I think it's close to the view that it will be one of the only digital infrastructure REIT platforms in the country. But we will see by Q4 as to whether we will proceed.

Thank you. All right. This message -- let me keep it within the VITRO space. So, this is from Matteo Lorenzo. On VITRO REIT, could you help us understand why it is the right time from both PLDT's and VITRO's perspective to list? PLDT is already in a lower CapEx and positive free cash flow and deleveraging phase, while VITRO still has significant growth upside. How much of the timing is about accelerating PLDT's own financial trajectory versus the current rate and yield environment versus what the real -- what the REIT can unlock for VITRO? So, I guess Viboy can take the timing from VITRO's perspective and then we can take the timing from PLDT's perspective.

I think it's a good time. From our 9 data centers currently, we have 8 that we are injecting into the REIT. That's 24 megawatts in total. Our ninth data center, the newest one is VITRO Santa Rosa, 36 megawatts in capacity. I think it's a good opportunity to come in and capitalize the 25 years of experience of us running data centers in the country. We are the largest data center platform in terms of number of sites. We are the largest data center in terms of capacity. We are the most carrier dense data center in the Philippines today. We are the home of the Philippine Internet. We host over 0.5 billion Internet exchanges in the Philippines today, and it bodes well to the platform that we have built over 25 years. So, we're very proud of the platform, and we think it's a good opportunity to list now. But having said that, the upside is still huge. A lot of developments on gigawatt [ hours ], a lot of development of hyperscalers looking in the Philippines. And of course, we have our crown jewel VITRO Santa Rosa too in future -- to be injected in the future in the VITRO. .

Yes. From the PLDT's perspective, what I can say is that the timing is -- of course, there's a lot of interest in this space. As you are aware, the recent Executive Order 119 has created an opportunity to scale up in this industry. The REIT itself is a portfolio of 8 data centers, which are mature, which have been around even over 20 years. And so as a result of it and as the capacity of those are higher, this allows us to offer investors an attractive vehicle where they can invest into an attractive dividend yield business that is listed. And then in the future, we would look to grow by continuing to build on the data centers. And so as Viboy just alluded to, the developments in this market with EO 119, even without it, we're seeing a lot of growth on the corporate side and the traditional colocation businesses. And now with the interest coming from hyperscalers and AI-based providers, this is creating a lot of supply on the demand side for data centers. And so I think the opportunity to list would be one to then raise some capital and perhaps some of that would go into the future investment. But also, as mentioned earlier, it's also part of the overall group plan to delever, the debt where we are now today at 2.6x net debt to EBITDA. We'd like to see that come down. And so any proceeds that could be generated from a listing that would help us in terms of reducing and improving and strengthening our balance sheet. But this is an opportunity. It could be this year, but it doesn't necessarily have to. And the business, as we fill up the capacity of VITRO Santa Rosa and we look to further develop others in the future, I think that that's really where the strategy of the business is recognizing the growth in this industry and wanting to be a continued participant and increase our leadership in this category.

And I think, just to add to that, I think you had embedded in your question, right, the market conditions is what we talk about, like how would it price, right, in that period when we explore the listing. So, I think we're obviously paying attention to that. We want to make sure that it's pricing in upside in the growth that we're factoring into the REIT and how the data centers are performing. I just wanted to highlight that as well.

All right. I'll take some live questions now. I see John Te, UBS with a raised hand. So let me go ahead and allow you to unmute. Please go ahead and ask your question, John. Apologies, John. Perhaps you can send me your message offline if you're not able to ask it live. But let me go ahead and move back to the Q&A side while I figure out the live question box. Apologies about that, John. All right. So this question in the Q&A box is -- this is from Michaela Ng of Papa Securities. So this is for our mobile segment. Mobile subscribers saw churn across all segments this quarter. Are you seeing more aggressive pricing from competitors or just a case of subscribers self-selecting into lower-priced providers amid inflation?

All right. Our [indiscernible] agency did cleanup on our subscriber base. So it's not a churn driven by subscribers, but rather we saw some subscribers who don't make sense already to be on the network because they were just using the resources. So we are cleaning up. So that's what it it is.

All right. This is from [ Michael Xavier Alonso ]. This is in regards to Pax Silica. So maybe you, Blums or Viboy can comment on this. Do you anticipate any potential disruption or increased competition in the data center business arising from the Pax Silica development?