PLDT Explores Sale of Data Center Business to NTT

Jakarta, INTI - Reports have emerged suggesting that PLDT, the prominent telecommunications firm in the Philippines, is in discussions regarding the potential sale of up to 49% of its data center business to Japan's Nippon Telegraph and Telephone (NTT), as disclosed by PLDT Chairman, Manuel Pangilinan.

Sources familiar with the matter, who preferred to remain anonymous due to the sensitive nature of the discussions, revealed that this transaction could potentially value PLDT's data center business at around USD 750 million.

While PLDT declined to comment on the valuation, NTT has not responded to inquiries seeking comments. NTT, Japan's largest phone company, commands a market value of USD 99.9 billion, according to data from LSEG.

One source indicated that PLDT aims to utilize the proceeds from the potential sale to alleviate debt and bolster ongoing and future data center initiatives. Another source hinted that a finalized agreement could materialize in the latter half of this year.

Founded in 1928, PLDT stands as the Philippines' largest telecommunication conglomerate, covering various sectors including fixed-line and wireless telephony.

Headquartered in Makati City, PLDT, through its subsidiary ePLDT, owns and operates 11 data centers across the Philippines, including locations in Cebu, Clark, Davao, Manila, Santa Rosa, Subic, and Sucat. Additionally, the company is actively involved in the construction of its 12th data center in the country, boasting a significant 100MW IT capacity.

PLDT's contemplation of selling its data center business is not entirely new. In 2021, there was a proposal to sell the data centers for USD 500 million, although the deal was postponed. Notably, NTT expressed support for the deal during that period.

In March 2023, as part of its strategy to raise funds for network expansion, PLDT struck a deal to sell over 1,000 telecom towers to KKR. This move underscores the telco's dedication to fortifying its network infrastructure.

According to LSEG data, PLDT's share price has experienced a year-to-date increase of 5.6%, resulting in a market value of USD 5.09 billion.

A potential agreement would underscore the growing interest in Southeast Asian data centers, driven by an expanding digital population and increased adoption of artificial intelligence, thereby boosting growth prospects in the region.