Telco braces for challenging 2023

CEBU, Philippines —  Globe Telecom, Inc. is preparing to cope with what’s in store in 2023 considering current inflationary pressures and rising interest rates.

In a briefing held recently reporting the company’s third quarter performance, Globe Chief Finance Officer Rizza Maniego-Eala expressed concerns about what 2023 brings to the business, although she said there are some positive sides that the company can use, both from the topline and expense sides.

“It’s not going to be an easy turn from 2022 to 2023. There are some headwinds, and I think those would be quite challenging to overcome,” Eala said adding that the company still has to complete its capital expenditure budget for 2023.

In the last few months, Globe’s business has already felt the soaring inflation “hit the wallets and spending ability”, especially to the mass consumer segment, she noted.

However, the company hopes that Christmas spending fueled by Overseas Filipinos’ remittance will cushion the belt-tightening among consumers and somehow offset the expenses slowdown in the last few months.

“We are interested to see if remittances will drive Christmas spending and whether there will be additional savings from our customers that would flow into top-ups and connectivity spending,” she said.

Globe closed the first nine months of 2022 with P74.4 billion capital expenditure (capex), or 14 percent higher than last year to bring better communications services to its over 91.0 million customers nationwide.  An eighty-four percent of this period’s total cash capex was allocated for data requirements to further enhance the overall customer data experience. These data requirements include additional LTE upgrades, new 5G sites, more tower builds, and a Fiber to the Home (FTTH) rollout.

With the Company’s bid to make fast and reliable connectivity pervasive and accessible to more households and businesses, close to 1.4 million FTTH lines were deployed as of end-September of 2022, versus over one million lines from a year ago.

Globe continues its efforts to provide free broadband fiber upgrades to its existing legacy broadband customers as part of its commitment to help bridge the digital divide among Filipinos.

Likewise, unlimited prepaid fiber (TMBayan Fiber WiFi) was launched last August in its bid to make fiber internet affordable and accessible to the masses. Filipinos can go online for as low as P5 for a minimum of one hour of internet access, and for P20 for 12 hours of high-speed internet connection.

Additionally, Globe built 1,064 new cell sites, upgraded over 10.6 thousand mobile sites to LTE, and installed 1,887 new 5G sites nationwide to address the growing connectivity needs of Filipinos amid greater digitalization. Globe’s network rollout momentum continues and remains on track to surpass last year’s builds of 1,407. These accelerated upgrading and network expansion efforts will not only deliver a more consistent level of network quality but will further elevate the standard of connectivity in the country.

For the first nine months ended Sept. 30, Globe saw its attributable total comprehensive income increase 37 percent to P24.9 billion from P18.2 billion previously. Total revenues for the period went up 3% to P130.2 billion from P126.4 billion in 2021.

The growth was “led by corporate data and mobile services, supplemented by the sustained growth from non-telco services,” Globe said in a statement.

However, revenues from its home broadband business decreased further in the third quarter. Nine-month revenues reached P20.5 billion, lower than the previous year’s P22.4 billion.

“Total home broadband subscriber count now stands at 2.7 million or down by 27 percent year on year,” Globe said in a statement.

 “We are pleased with the Globe Group’s performance amidst the challenging economic climate and rapid changes in our industry. We believe that our decision to pivot and expand our growth opportunities through non-telco services has paved the way for us to remain relevant and competitive. We will stay committed to our promise to improve our network and come up with new products and services to meet the changing needs of the market and support Filipinos’ digital enablement. Looking ahead, we are confident that our digital transformation will enhance shareholder value and unlock Globe’s sustainable growth trajectory,’ said Ernest L. Cu, President, and CEO of Globe Telecom Inc.