Globe Telecom will stick to its $450-million capital expenditure budget this year with another $350 million likely to be programmed next year, despite lower consumer spending in the first half of 2008 that has dampened the company’s bottom line.
Company president and chief executive officer Gerardo Ablaza said that while the first half numbers are soft, the business remains fundamentally sound and the company’s financial position remains solid.
As this developed, Globe announced it will bring the hugely popular iPhone 3G model to the Philippines on Aug.22. This phone combines all the revolutionary features of Apple’s iPhone plus 3G networking that is twice as fast, build-in GPS for expanded location-based mobile services, and the iPhone 2.0 software.
“Beginning Aug. 22, Globe is bringing to the Filipinos the best browsing experience through the revolutionary iPhone 3G on our 3G/HSPA network,” said Ablaza.
Globe has earmarked $450 million in capital expenditures this year to enhance its mobile network quality and coverage, grow its broadband footprint, and improve the resiliency of its Internet network.
Ablaza said except for a non-recurring investment this year of about $100 million for transmission capacity, the level of capex will most likely be the same at around $350 million next year.
He expressed disappointment that the strong second quarter in terms of subscriber pickup did not translate to a revenue improvement. “The challenge is to look at programs that are geared towards increased usage. We have reviewed our product and pricing plans and we do not have any competitive disadvantage in these areas. But we may have to recalibrate our marketing and promotion efforts and do an aggressive push,” he said.
Ablaza revealed that partly due to inflationary effects, there has been a change in usage pattern. For instance, while voice revenues went down three percent, there was a three percent increase year-on-year in terms of SMS revenues. Value-added services, meanwhile, dropped 22 percent this year compared to last year.
He noted that they are hopeful there will be a better growth profile, especially with the fourth quarter being a traditionally high season. “At best, the revenue growth will be at the low end of the single-digit range,” he said.
For the second half of this year, Ablaza revealed that Globe will reinforce the TM brand for the mass market and intensify coverage of overseas Filipino communities by entering into tie-ups with other telco operators and retail chains.
Globe will likewise make a major broadband push supported by a strong technology portfolio that will include WiMax (wireless interoperability for microwave access) which will be launched by the fourth quarter of this year, the current DSL (digital subscriber line) for fixed wireless broadband access, 3G/HSPA, and fiber to home (FTTH).
“Our Wi-Max trials have confirmed its compatibility with our requirements. We will use this technology mostly for fixed wireless broadband,” Ablaza said.
Wi-Max which is the next generation wireless broadband technology can carry both voice and data whether for fixed wireless or mobile at speeds of up to 10 megabits per second. It will be initially available in several key cities.