Dito Telecommunity Eyes Data Center Push, But Profit Must Come First

The Data Center Dilemma

Dito Telecommunity Corp. is evaluating whether to expand its data center footprint to serve enterprise and government clients, but the decision hinges on one prerequisite: turning a profit first.

The telco, backed by Filipino businessman Dennis Uy, currently operates data centers for its own network requirements. Chief revenue officer Adel Tamano confirmed the company has begun studying the business case for scaling up those facilities to accommodate external customers, though no commitment has been made.

"We have the capacity to expand these data centers if we want to, but we need a strong business case," Tamano said. "Yes, we are open to it. Right now, we just don't have a decision yet."

The timing appears opportune. A July executive order (EO 119) mandates Philippine government agencies to store classified data locally, creating automatic demand for domestic data center operators. Incumbents VITRO Inc., the PLDT subsidiary, and ST Telemedia Global Data Centers Philippines are positioned to capture that windfall given their existing infrastructure.

The Numbers Don't Add Up Yet

Dito's hesitation stems from deteriorating financials. Parent company Dito CME Holdings Inc. reported a net loss of 11.29 billion pesos for the six months ending June, triple the 3.36 billion peso loss recorded a year earlier, according to the company.

Revenue climbed 21 percent to 11.67 billion pesos, and operating expenditure rose a modest six percent to 17.41 billion pesos. But interest payments surged to 10.04 billion pesos, and foreign exchange losses hit 13.88 billion pesos, overwhelming the top-line gains.

China Bank Capital Corp. managing director Juan Paolo Colet advised Dito to focus on its 2028 profitability target before venturing into new capital-intensive segments. Property consultant Cushman & Wakefield estimates a Philippine data center costs at least 6.6 million dollars per megawatt of capacity, or roughly 405 million pesos at current exchange rates. Facilities designed for high-performance computing and artificial intelligence workloads can cost significantly more.

"Rolling out a competitive data center business is capital intensive, and would entail a significant upfront investment," Colet said.

Growth Potential Remains Visible

Despite the financial headwinds, the data center sector's momentum in the Philippines is hard to ignore. VITRO has delivered average revenue growth of 13 percent and is expanding operational capacity to 44 megawatts this year and 62.4 megawatts by 2027, according to PLDT. The unit is preparing a real estate investment trust listing on the Philippine Stock Exchange, targeting 24.2 billion pesos in proceeds.

ST Telemedia Global Data Centers Philippines, part of the Ayala Group, plans to raise its own capacity to 30 megawatts this year, encouraged by the new data residency requirements.

The facilities house applications and information for global technology companies including Amazon, Google, and Meta, underscoring their centrality to digital infrastructure. But environmental concerns are mounting. Large-scale data centers can consume up to five million liters of water daily for cooling, raising questions about sustainability as the sector scales.

What Comes Next

For Dito, the path forward remains conditional. The telco must stabilize its balance sheet and demonstrate consistent operational efficiency before committing the hundreds of millions of pesos required to compete in commercial data centers. The government's regulatory push has clarified demand, but capital allocation discipline will determine whether Dito joins the race or remains a spectator while its infrastructure advantage erodes.