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Globe Strong Revenue Growth Fuels Network Investments to Meet Consumer Demand for Data
Globe Telecom’s stronger-than-expected revenue growth across all businesses continues to fuel investments for higher network capacity and wider coverage. Globe is allocating about 30% of its gross service revenues to capital spending every year. While some market analysts are wary of the ever-increasing capital expenditures and its impact on long-term profitability, the company has shown remarkable success in its strategy execution of spearheading the digital transformation in the Philippines. Coupled with operational expenses in check, the company has earned a slot among the best performing telcos in ASEAN.
“We intend to continue providing more of what our customers want, which include superior content through global partnerships, pervasive internet, and superior mobile experience,” Globe President and CEO Ernest Cu said.
To date, the Globe network’s combined 3G and 4G data traffic volume increased by 140%, with 390 Petabytes in the first half of 2018 from 280 Petabytes in the same period last year. The growing data traffic volume is also seen in its revenue growth across all businesses.
Globe sustained its market leadership in mobile, with revenues surging to P51.6 billion in the first six months of the year. This is one of the strongest performances in ASEAN year-to-date. Its mobile subscriber base totaled 65.1 million as of end-June 2018, up 9% from the 59.7 million subscribers in the same period last year.
Its growth in home broadband business provides Globe with a second engine. Its home broadband business performed well in the second quarter (up 4% from first quarter), bringing its first-half revenues to P8.7 billion. This was driven by subscriber expansion in fixed wireless solutions (up 40%) as well as positive market response to the new and more flexible home broadband bundles and plans.
The gains in mobile data and broadband were complemented by corporate data, which posted P5.4 billion in revenues in the first six months of the year. This was fueled by sustained demand for corporate connectivity and business solutions.
Advancing the network
“With data traffic continuing to be robust, we are accelerating our capex guidance by $100 million this year to further develop our network infrastructure. Right now, around 34% of our revenue goes back to spending for upgrading our network. This is among the highest reinvestment ratios in the world,” Cu added.
While it is upgrading its network to support 5G by early 2019, Globe is also pushing the boundaries of its 4G/LTE network in the country. The company is continuously cited by independent crowdsourcing surveys for having the most pervasive 4G/LTE network in the Philippines.