This developed as the Ayala-Singapore Telecom-owned cellular service provider opposed government plans to impose new taxes on text messaging. Globe Telecom alone sends out about 77 million text messages a day of the industry total which is about 150 million messages a day. A one-centavo excise tax per message could easily raise P550 million a year for the government.
This year, Globe is scheduled to put up 1000 new cellsites mostly in Visayas and Mindanao which could probably add about three million in subscriber capacity. Its network now has about 13 million in gross subscriber capacity. Globe had total wireless subscribers of 8.9 million as of end-2003. Total capital expenditure budget for 2004 is $350 million.
Globe president and CEO Gerardo Ablaza said the installation of new cellsites is aimed at reaching further out into the mass market where a lot of growth is taking place. "In Metro Manila, the cellular penetration rate (percent of population with cellular phones) is at 70 percent. In the provinces, it’s still low at 10 to 15 percent," he said. The company aims to retain its current market leadership in the postpaid segment but is also focused on getting a bigger share of the prepaid segment currently dominated by its competitor Smart Communications.
Also yesterday, Ablaza opposed proposals from certain government officials to tax text messaging. He said that in 2003, Globe alone paid P2.5 billion in taxes. "Considering that a 10 percent value-added tax is already being imposed, an additional tax on text messaging will constitute double taxation," he said.
Ablaza added that a robust and growing industry such as the cellular industry is already bringing about economic benefits much, much more than what additional taxation will bring about. "Regardless of who pays for it, and whether or not we pass it on or absorb the added tax, it will definitely impact on the kind of service that we give to our customers," he stressed.
Meanwhile, Globe chief finance officer Delfin Gonzalez, Jr. yesterday said that $150 million in new financing is being worked on to partly finance the Phase 10 expansion, of which $100 million will be through a syndicated loan participated in by Standard Chartered, Sumitomo Mitsui, and BNP Paribas. A term loan is also being worked out with a local bank.
In addition, Globe is scheduled to pay out in the third quarter of this year about $175 million remaining of the 2009 bonds issued by the company. The amount will come partly from internally generated funds, $100 million in refinancing loan, and about $50 million which has already been signed and which the company can drawdown before repayment date.
During yesterday’s stockholders’ meeting, Globe chairman Jaime Augusto Zobel de Ayala II said the company will strive for greater regional collaboration as key to future success. Basically, Globe will utilize shareholder Singtel’s growing presence in the region to further elevate competitiveness beyond local boundaries.
Ablaza said one of the initiatives which Globe can pursue is the export of its MMS (multi-media messaging service) applications and services to Singtel affiliates in the region which include Optus of Australia, AIS of Thailand, Telkomsel of Indonesia, and Bharti of India. Other customer-relationship oriented collaborative are also being worked out among the different Singtel affiliates.