The team-up was committed to paper in the form of a memorandum of agreement (MOA) between the Antonio Tiu-led Greenergy [GREEN 2.58 12.24%] and the Dennis Uy-led Dito Telecommunity [DITO 7.44 6.18%]; the MOA has GREEN providing “commission-based lead generation services” to DITO, and in return, DITO will pay a commission to GREEN for each successful DITO mobile subscriber signup.
GREEN agrees to “lead the public to DITO-related products and services”, and to do this, GREEN has committed to use “its own system or the system of any third-party affiliates”. Then, the GREEN press release quickly runs through a couple of other bullets that speak very generally about collaboration “in other areas” to pump DITO’s subs and promote GREEN’s “digital initiatives”.
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As you might remember, DITO has been trying its hardest to make its extremely modest subscriber count seem like a victory, while also trying to frame its slow and clumsy country-wide rollout as some kind of “sustainable” on-going victory. The market remembers, as DITO’s stock price has crashed 59% from it’s peak of around P18.12 in February just after it passed the last technical audit; Friday’s P7.44 close is just the most recent low in the consistent, downward trend that the stock has traced, especially since early March.
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GREEN is down about 44% over the same timeframe, and especially since the start of June. If we zoom out, it’s hard to find anything technical to fault about the team-up for either company; DITO needs subs and this is a really low-risk method of trading a slice of profit in exchange for another company’s userbase, and GREEN needs... money?
The deal is interesting to GREEN if this deal gives can forge a strong alliance with a committed telecom provider in its geographical regions of focus, that GREEN can use to push all of its connectivity-related projects as part of Tiu’s “#GREEN2030 vision” (Farmer card, transpo payment card, etc). For DITO, though, the motivation for the agreement can be summed up by this line of the press release: “The collaboration between [GREEN] and DITO will pave the way for the conversion of [GREEN]’s existing clients, partners, and affiliates to become DITO mobile subscribers.”
Basically, DITO purchased GREEN’s userbase and GREEN’s cooperation in converting its current users into DITO mobile subscribers.
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