Globe profit drops 8% in 2020, but expects 2021 growth

Telecommunication giant Globe Telecom posted an 8% drop in net income to P20.4 billion in 2020, but expects some growth within 2021.

Service revenues were down by 2% to P146.4 billion for the entire 2020, from 2019's P149 billion.

Globe's mobile business dragged revenues, as it slid 7% from P111 billion in 2019 to P103.1 billion in 2020 due to the coronavirus lockdown. Voice revenues ended 16% lower to P20 billion, while SMS revenues plunged by 29% to P11 billion.

Mobile data revenues, meanwhile, inched up to P72 billion in 2020 from the P71.4 billion posted in 2019.

Globe said revenues were mostly affected because of the pandemic, but its home broadband service remained a bright spot with a strong 23% growth driven by work-from-home arrangements and online classes.

The telco giant did not issue profit guidance for 2021 but is gunning for "low" single-digit growth.

"We expect growth will resume this year," said Globe chief executive officer Ernest Cu in a virtual briefing on Wednesday, February 10.

Cu remained hopeful for the year to come, but acknowledged that data spending may have to compete with rising food prices.

Competition?

With Dito Telecommunity launching commercially in March, Globe said the impact on competition remains to be seen once the 3rd telco player has rolled out. (READ: 'We want to be No. 1,' says Dito Telecommunity)

"On the mobile side, competition will remain pretty much as it is," said Cu. "Let's see what happens in March."

Globe dismissed a could-be price war similar to what happened in the early 2000s with the entry of Sun Cellular. Sun was backed by JG Summit before it was bought by PLDT in 2011.

"My own opinion is that it probably won't [happen], being the fact that prices are very low. It's very difficult when you don't have scale.… But again, we don't know what the strategy will be," said the Globe CEO.

"We'll have to see how they play the game. All I can say is that we will have commensurate reaction to however aggression [they show]," he added.

But what concerns Globe right now is competition in the fixed-line business.

Converge ICT Solutions on Wednesday said it has more than doubled its fiber rollout, adding over 28,000 kilometers of cables in 2020.

"With Converge having very significant builds alongside PLDT and Globe, what was once a free area for Converge to play has become a crowded area," said Cu.

Expansion

Globe earmarked P70 billion for capital expenditures in 2021, which it said will be spent mostly on data services.

The telco giant plans to build 2,000 towers and 1 million Fiber to the Home lines this year.

It also committed to be more aggressive with its 5G rollout in 2021, as more Filipinos acquire handsets to experience better speeds.

So far, Globe 5G is available in 1,045 areas in key Philippine cities and provinces. The firm said it will "cover more areas" in 2021 than it was able to accomplish in 2020.

Addressing President Rodrigo Duterte's call for better internet services, Cu said Malacañang seems to have been "satisfied" with Globe's network and service upgrades throughout 2020.

"The Palace has been very quiet in terms of what they are asking for," said Cu. – Rappler.com

Aika Rey

Aika Rey is a business reporter for Rappler. She covered the Senate of the Philippines before fully diving into numbers and companies. Got tips? Find her on Twitter at @reyaika or shoot her an email at aika.rey@rappler.com.

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