PLDT Inc. (PHI): 5 FORCES Analysis [Nov-2025 Updated]

You're looking at PLDT Inc. (PHI) at a real inflection point, and frankly, the competitive landscape is getting tougher by the quarter. After years of heavy spending, the focus has sharply shifted to fiscal discipline, with the 2025 CAPEX guidance now guided down to P63 billion as the company targets positive free cash flow by 2026. But the biggest shift is regulatory: the Konektadong Pinoy Law, which lapsed into law in August 2025, just blew open the doors for new entrants by removing the franchise requirement and mandating infrastructure sharing, threatening the moat PLDT built with its massive fiber network. While the Home segment still shows stickiness with an industry-leading ARPU of ₱1,485 in H1 2025 and churn at just 1.93%, you need to see how these five forces-from powerful suppliers to disruptive satellite subsitutes-are squeezing margins and forcing PLDT to evolve from a pure connectivity provider to an intelligence enabler. Let's break down the pressure points below.

PLDT Inc. (PHI) - Porter's Five Forces: Bargaining power of suppliers

When you look at PLDT Inc.'s operational backbone, you see massive, long-term investments in infrastructure. That scale immediately tells you something important about suppliers: their power is significant, especially for the high-tech gear that keeps the network running.

The core of this power dynamic rests on the limited number of global vendors capable of supplying cutting-edge core network equipment, particularly for advanced technologies like 5G Standalone Architecture, which PLDT is betting big on for future growth. You can't just pick up a new core router from any local distributor; this is specialized, high-barrier-to-entry hardware.

This concentration risk is a real concern. We have to acknowledge the high concentration risk that was reported, showing that as of 2024, a staggering 68% of 5G equipment was sourced from a single major supplier. Honestly, relying that heavily on one partner for mission-critical technology puts PLDT in a tough negotiating spot, even with their reduced 2025 CapEx guidance of PHP 60 billion for the full year.

Switching costs are the invisible moat suppliers build around PLDT. If PLDT decided to change its primary core network vendor, the disruption and expense would be immense. We're talking about substantial sunk costs, estimated to be in the range of PHP 3.5-4.2 billion just to manage the core network changes. That figure alone makes vendor lock-in a major strategic consideration.

Also, let's talk about the global economic headwinds hitting PLDT's procurement. Imports of essential network chips and routers expose PLDT directly to inflationary cost pressures and the shifting landscape of international tariffs. For instance, general 2025 tariff adjustments on networking gear in key markets have suggested price hikes ranging from 5% to 20% on components, which directly pressures PLDT's capital expenditure efficiency, even as they aim to spend less than the PHP 78.2 billion spent in 2024.

Here is a quick look at some of the financial context surrounding PLDT's infrastructure spending, which dictates its purchasing power:

The supplier landscape is characterized by a few key dependencies that you need to watch closely:

• Limited number of global vendors for 5G core technology.
• High reliance on a single source for 68% of 2024 5G equipment.
• Exposure to global trade disputes and tariffs on hardware imports.
• Substantial financial penalty for vendor switching, estimated at PHP 3.5-4.2 billion.
• Supplier engagement is now focused on ESG alignment, with partners accounting for over 55% of 2023 spend.

If onboarding takes 14+ days, churn risk rises, but for suppliers, if network deployment schedules slip, PLDT's service expansion plans get delayed. Finance: draft 13-week cash view by Friday.

PLDT Inc. (PHI) - Porter's Five Forces: Bargaining power of customers

You're looking at PLDT Inc. (PHI) through the lens of customer power, and honestly, it's a mixed bag right now, late 2025. The competitive landscape in the Philippines telecom sector means customers have leverage, but PLDT's premium positioning in fixed broadband gives it some breathing room. We need to look at the hard numbers to see where the pressure points are.

Price Sensitivity and ARPU Pressure

Intense rivalry, particularly in the mobile space with two other major players, definitely keeps a lid on pricing power, which you see reflected in ARPU (Average Revenue Per Unit) trends. While PLDT Home has managed to maintain the industry's highest ARPU, this is a testament to upselling fiber bundles rather than a lack of price sensitivity from the broader market. The pressure is real; if you don't offer superior value, customers will look elsewhere. Here's the quick math on the premium positioning:

Low Switching Costs in Mobile

For the wireless segment, switching costs are inherently low. You can port your number relatively easily between Smart Communications, Globe Telecom, and DITO Telecommunity. This ease of movement means that any perceived dip in network quality or a competitor's aggressive pricing promotion can trigger immediate customer migration. The threat of substitution between mobile providers is very high; it's a direct feature of the market structure.

Home Segment Stickiness

Where PLDT Inc. really dampens customer bargaining power is in its fixed broadband offering, specifically through fiber. The investment in network quality is translating directly into customer retention. You see this in the churn figures, which are industry-leading low. If onboarding takes 14+ days, churn risk rises, but PLDT's focus on service innovation is helping here.

• PLDT Home churn rate (Q3 2025): 1.9%.
• PLDT Home churn rate (H1 2025): 1.93%.
• PLDT Home churn rate (2024): 1.7% (Industry best).

Customer Base Size and Fragmentation

PLDT's customer base is massive, which gives it scale advantages, but the sheer number of users across different technologies (fiber, fixed wireless, mobile) means the base is highly fragmented. This fragmentation means a single pricing strategy won't satisfy everyone, and it dilutes the power of any single customer group. We can see the growth in the high-value fiber base, which is less price-sensitive than the broader mobile base.

The scale is undeniable, but the mix of services means customer power varies significantly by segment. For instance, the fiber base is sticky, but the mobile base is highly elastic.

• Total Fiber Net Additions (YTD Q3 2025): 265,000.
• Total Fiber Subscriber Base Growth (YOY Q3 2025): 8% higher.
• Active Mobile Data Users (Q3 2025): 42.4 million.
• Total Fiber Subscribers (End-Sept 2025): 3.63 million.

Finance: draft 13-week cash view by Friday.

PLDT Inc. (PHI) - Porter's Five Forces: Competitive rivalry

You're looking at the competitive landscape for PLDT Inc. (PHI) right now, late in 2025, and the rivalry is definitely the most pressing force. It's a fight for every subscriber and every peso of revenue in a market that, while growing, is intensely contested.

The rivalry is extremely high, rooted in a tight duopoly that is now firmly a three-way contest. Historically, PLDT and Globe Telecom dominated, and even now, in the mobile segment, they hold a combined market share of over 90% based on subscriber data from late 2024/early 2025 estimates. This means any move by one is immediately countered by the other, leading to constant pressure on pricing and capital deployment.

The new third player, DITO Telecommunity, and the aggressive fiber rival Converge ICT, are intensifying this competition. DITO Telecommunity, as of June 2025, serves 14.6 million mobile subscribers and 240,000 customers in its Fixed Wireless Access (FWA) segment. DITO is still aiming for a 30% mobile market share within the next two years, and they expect to book at least P20 billion in revenues for 2025. To be fair, DITO has already breached the 15 million subscriber mark as of July 2025.

On the fixed-line side, Converge ICT is a major disruptor. Their prepaid brand, Surf2Sawa, hit 500,000 users recently, showing they are effectively targeting segments the incumbents might overlook. Also, Converge ICT is making big infrastructure plays, like lighting up the first direct US subsea link through the Bifrost system.

This rivalry is incredibly capital-intensive. You can see this directly in PLDT's spending plans. The initial 2025 CAPEX guidance was set high, ranging from P68 billion to P73 billion, though this was later trimmed to a ceiling of P63 billion as of August 2025 due to better vendor terms. Still, for the first half (H1) of 2025, PLDT already spent P27.4 billion on network build-out. This level of spending is necessary just to keep pace.

The pressure is showing in the top-line growth figures. While PLDT is still growing, the pace is modest, reflecting the market's maturity and competitive pricing. PLDT's consolidated service revenue growth in H1 2025 was only 2.7% year-on-year. Conversely, Globe Telecom saw its revenue fall by 2% in the same period.

Here's a snapshot of the competitive positioning and financial pressure points in H1 2025:

Even within PLDT's strong segments, the competition is fierce:

• PLDT Home revenue grew 4% in H1 2025 to P30.4 billion.
• Fiber-only revenues for PLDT Home climbed 7% year-on-year to P29.5 billion.
• PLDT Home added 169,000 new fiber subscribers in H1 2025.
• PLDT's ARPU remained the industry's highest at P1,485.
• Over 80% of new PLDT Home customers in Q2 opted for plans at P1,299 and above.

The need to maintain this high-value customer base while fending off price attacks from DITO and infrastructure challenges from Converge ICT means PLDT must continue heavy investment. It's a classic capital-intensive battle where scale and network quality are the only real defenses.

PLDT Inc. (PHI) - Porter's Five Forces: Threat of substitutes

You're looking at the competitive landscape for PLDT Inc. (PHI) and the threat from substitutes is definitely a major factor, driven by digital evolution. This force looks at what customers might use instead of PLDT's core services, like voice calls or fixed-line broadband. The numbers clearly show where the customer value has shifted.

Over-The-Top (OTT) platforms like WhatsApp and Zoom heavily substitute traditional voice and SMS services. This isn't just a theory; the global trend shows a massive migration. For context, telecom operators worldwide have seen voice calls revenue share drop by an approximate 80% over the last decade, and SMS revenue share has seen a staggering 94% decrease. PLDT Inc. (PHI) is navigating this by making sure its own data offerings are compelling enough to capture the spend that's leaving legacy services.

The shift is stark when you look at PLDT Inc. (PHI)'s own revenue mix as of mid-2025. Data and broadband are now the overwhelming source of income, which is the direct result of users substituting traditional services with data-based alternatives.

Satellite internet services, such as Starlink, are now approved and bypass the need for traditional fixed infrastructure. Starlink, operated by SpaceX, is scaling its constellation, which now consists of over 7,600 satellites as of May 2025, providing coverage to around 150 countries and territories. They are actively rolling out services that directly compete in the fixed broadband space, especially in underserved areas, though some analysts see coexistence and collaboration as likely, with Starlink potentially fulfilling the last mile in areas where terrestrial networks are difficult to deploy. Starlink has announced that Data & IoT services became available in 2025 via its Direct to Cell satellites.

Mobile Virtual Network Operators (MVNOs) are emerging as another substitute layer, often targeting price-sensitive segments with flexible plans. While the prompt mentions a 7.3% market penetration for MVNOs in 2023, the market is still growing, projected to reach a revenue of USD 68.1 million by 2030 from USD 37.0 million in 2024, at a Compound Annual Growth Rate of 10.1% from 2025 to 2030. This shows a persistent, albeit smaller, competitive segment offering alternatives to PLDT Inc. (PHI)'s primary mobile services.

The pressure from substitutes is clearly reflected in the internal business dynamics of PLDT Inc. (PHI), particularly in the fixed-line segment, where fiber migration is aggressively replacing older technologies. This is a proactive measure to counter substitutes by offering a superior data product.

• Fiber-only revenues rose 7% to ₱29.5 B in 1H 2025.
• Fiber made up 97% of total Home revenues (₱30.4 B) in 1H 2025.
• In Q1 2025, Fiber-only revenues were ₱14.7 B, representing 97% of Home revenues (₱15.2 B).
• The shift in the Individual Wireless segment is also clear: Mobile Data Revenues were steady at ₱37.4 B in 1H 2025.
• Active Mobile Data Users reached 41.6 M by the end of 1H 2025.

To be fair, the very success of PLDT Inc. (PHI) in driving data adoption-with data accounting for 85% of service revenues-is also the mechanism by which it defends against external substitutes for voice and SMS. Finance: draft a sensitivity analysis on a 5% ARPU decline in legacy voice/SMS revenue streams by end of Q3 by Friday.

PLDT Inc. (PHI) - Porter's Five Forces: Threat of new entrants

You're looking at a market that just had its foundational entry barriers significantly lowered, so the threat of new entrants for PLDT Inc. is definitely spiking as of late 2025. The key catalyst here is the recent enactment of the 'Konektadong Pinoy Law' in August 2025, which lapsed into law without a presidential veto.

This new legislation directly targets the legislative franchise barrier that historically protected incumbents like PLDT Inc. The law eliminates the requirement for new players in the data transmission sector to secure a time-consuming congressional franchise and a Certificate of Public Convenience and Necessity. Instead, it prescribes a straightforward administrative registration requirement for Data Transmission Industry Participants (DTIPs). This regulatory shift is designed to foster competition and innovation.

Also, the new regulation mandates infrastructure sharing on an open, fair, reasonable, and non-discriminatory basis. This directly erodes the massive cost advantage PLDT Inc. has built over years. PLDT Inc.'s extensive network, reported to be around $\text{1.2 million}$ cable kilometers of fiber footprint as of H1 2025, is now potentially accessible to competitors for co-location and co-use. This sharing mechanism aims to optimize asset use across the industry.

The expected market reaction is substantial. According to reports following the law's passage, over $\text{1,000}$ small internet providers are expected to enter the market by 2026. Department of Information and Communications Technology (DICT) Secretary Henry Aguda has even estimated that at least seven reputable foreign telecommunications companies are eyeing the Philippines, with each potential new entrant estimating an investment between $1 billion and $1.5 billion.

Still, building a nationwide competitor isn't a weekend project. Despite the legislative hurdles being removed, the initial capital outlay for a new entity to build a truly nationwide network remains a significant deterrent. This barrier is estimated to be in the range of $\text{P15-20 billion}$. Here's a quick look at the scale of existing infrastructure versus the challenge ahead for a new entrant:

The immediate risk for PLDT Inc. is the potential for price competition, especially in urban areas where new entrants can quickly leverage shared passive infrastructure. PLDT Inc. has already voiced concerns, hinting at possible legal challenges to the law's constitutionality, arguing it could be discriminatory against incumbents who already made heavy infrastructure investments.

The key factors that will determine the actual threat level are:

• Speed of the Implementing Rules and Regulations (IRR) finalization.
• Clarity and fairness of the Reference Access Offer (RAO) system for sharing rates.
• DICT enforcement of capitalization requirements for new players.
• PLDT Inc.'s ability to defend its premium Average Revenue Per User (ARPU) of $\text{P1,485}$ (H1 2025).