Globe's net earnings up by 170% in 2014
MANILA, Philippines – Ayala-led Globe Telecom Incorporated closed 2014 with a 170% increase in its net earnings at P13.37 billion ($302.93 million), driven by growth in its wireless and fixed line data services.
Demand in its mobile, broadband, and fixed line data businesses booked combined earnings of P99 billion ($2.24 billion) in 2014, according to Globe’s disclosure to the Philippine Stock Exchange on Thursday, February 5.
“Our full year results are testaments of our continued commitment in creating a complete digital experience, delivering best-in-class products and services and a whole new level of customer experience for our subscribers,” said Ernest Cu, Globe president and chief executive officer.
Contributing to the earnings was its subscriber base, which grew to 44 million from 38.5 million in 2013. It spent P59.8 billion ($1.35 billion) for operations and subsidy for its subscriber base, and 3G, HSPA+, and 4G network expansion.
Globe’s postpaid and its mass market TM brands also propelled its mobile telephony revenues to P78.1 billion ($1.77 billion) in 2014, from P72.8 billion in 2013.
Its prepaid revenues booked P48.2 billion ($1.09 billion) from P45.7 billion ($1.03 billion), or a 5% growth, “signaling its return on a growth track.”
This, despite heavy competition in value-based bucket and unlimited packages for voice and short messaging services, said Globe.
Capital spending at $650 million this year
For 2015, Globe plans to spend at least $650 million, 75% to go to infrastructure to support its data services.
This includes deployments of LTE mobile and LTE @Home, capacity and coverage augmentation of its 3G, HSPA+ and DSL network, as well as its requirements for domestic transmission and international cable capacities.
Globe said its remaining programmed capital expenditures (capex) will be spent for other product innovations. It also has a remaining capex balance as it only spent P21.1 billion ($478.26 million) in 2014, lower than its $650-million allotment for that year.
“The shortfall was mainly timing-driven and is expected to flow through the early parts of 2015 as acceptance of the assets and the capex programs was made,” Globe said.
Fitch: telco earnings to dwindle in 2015
However, London-based Fitch Ratings in November 2014 said that telecommunication giants in the Philippines will incur higher capex and lower profits in 2015 due to a need to expand their fiber networks and cope with the heavy demand for data services.
In January, Globe urged the government to streamline the process of securing rights to mount cell sites.
Derek Lim, Globe senior vice president for corporate and legal services, said lengthy processes and exorbitant fees required by government explain why the Philippines continues to suffer slow Internet speeds.
To date, Globe has 25,150 base stations and 15,000 4G base stations in the Philippines, where broadband speeds are one of the Asia Pacific’s slowest.
Globe, along with the Philippine Long Distance and Telephone Company, has been asked to explain its data service caps, which subscribers say are a far cry from its unlimited data service promotions.
On Thursday, Globe's publicly traded shares at the PSE stood at P1,809 ($40.99) apiece, up by 39 points or 2.2%.
Globe is a subsidiary of Ayala Corporation, the country's oldest conglomerate. It is also partly-owned by SingTel, with the rest of its shares owned by public shareholders. – Rappler.com
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