Globe Telecom embarks on new business consolidations

Globe Telecom announced yesterday a consolidation of businesses focused around wireline and wireless companies to achieve a stronger competitive position for its various brands, amidst today’s market challenges.

Starting Oct. 1, the company’s Globelines and GlobeQuest services will move their networks and products to Innove Communications Inc., a 100-percent subsidiary of Globe Telecom. This is expected to result in higher-level service levels characterized by wider geographic average, integrated voice and data solutions, and a focus approach to satisfying corporate and consumer communication needs.

"Innove will be Globe Telecom’s subsidiary serving voice, private data networks, and Internet needs of individuals and enterprises in the Philippines. We are transferring and integrating our wireline networks and operations into this fully owned subsidiary, which used to be named Isla Communications. This expanded and focused company signals our renewed commitment to innovation, customer focus and operational excellence," said Globe Telecom CEO and president Gerard C. Ablaza Jr.

"We have created a financially strong company in Innove, with more than P24 billion in assets, P8 billion in annual revenues, P2 billion in annual operating income, and zero debt. Given the many opportunities and challenges of the wireline voice and data businesses, we believe that the move to house Globelines and GlobeQuest in a single company will give Innove a unique starting point as a financially strong and focused wireline company," said Innove chief operating officer Gil B. Genio.

Last Aug. 7, 2003, the National Telecommunications Commission (NTC) approved the legal transfer of Globe’s wireline business, authorizations, properties, assets and obligations to Islacom. Globe decided to change the name of Islacom because the old entity would have little in common with what is being created. The Securities and Exchange Commission (SEC) approved last Aug. 25, 2003 the change in name from Islacom to Innove Communications Inc.

The NTC decision which has become final, also approved the common usage, operations and maintenance of the network elements of both Globe and Innove. This is to ensure a smooth transfer of the local exchange carrier (LEC) and data services from Globe, and no disruption in interconnection with other carriers while the transfer is ongoing.

Innove will continue to market and sell the Globelines and GlobeQuest services, while Globe Telecom will continue to focus on the wireless segment of the business.

"Globelines and GlobeQuest will be offered with the same standards and quality previously enjoyed by our customers, but now delivered over a wider and constantly expanding domestic and international network infrastructure, and with an even stronger and more dedicated organization," Genio said.

He added that Innove will pursue further steps to improve by expanding its geographic footprint, investing in new network technologies, and working closely with application technology providers and integrators to make customer applications take advantage of the company’s higher availability and more cost effective networks.

Effective Oct. 1, 2003, Innove will absorb about 500 employees working for Globe’s wireline business. Employees will carry over their current seniority and maintain current salary levels. The employee movement to Innove will have no impact on individual jobs, compensation benefits, security and tenure, or individual career points. Innove is expected to have about 800 employees.

Both Globe Telecom and Innove management believe that upon completion of the movements by Oct. 1, 2003, the two companies will be strategically well-positioned within their respective businesses to meet the challenges of the increasingly competitive telecommunications environment, and maximize opportunities through a focused approach to their respective segments.