Globe Telecom adopts multi-pronged growth strategy

MANILA, Philippines - Globe Telecom is taking on a multi-pronged approach to grow and recover mobile revenues and market share for the rest of the year, the company’s top executive said yesterday.

The company will focus on growing its subscriber base through quality acquisitions underpinned by strong product offerings and loyalty push, said Globe president and CEO Ernest Cu. Globe expects net increases in its SIM base by the fourth quarter of 2009 as it completes the clean up of its prepaid SIM base, he said.

Also yesterday, Globe said results of a nationwide broadband benchmark test of 26 key cities all over the country showed that Globe Tattoo Broadband is the fastest among all prepaid wireless broadband brands.

Third-party testing agency NESIC Philippines Inc. utilized three applications, namely Netpersec, 2wire.com, and the web-based speedtestnet. to determine the real-time connection speeds of three nomadic broadband brands and how fast web pages are downloaded.

The test showed that Globe’s prepaid broadband service is the fastest Internet brand, posting average speeds of as high as 1,300 kbps in some areas within and outside Metro Manila. One brand has speeds of under a thousand kbps and a third brand did barely 100 kbps. And while additional snapshot tests of Globe Broadband even showed speeds of up to 3,500 kbps in some areas, the other brands were in the low hundreds, a NESIC representative said.

Globe earlier recalibrated its acquisition efforts during the second quarter of the year, focusing more on stimulating usage and strengthening brand loyalty while deliberately churning out some lower-quality acquisitions. As of end-September, Globe reported a SIM base of 23.1 million.

“Our early October results have been encouraging, with improvements in both gross additions and churn levels. This is a result of the adjustments that we have made to our acquisition programs with the objective of pulling in better quality subscribers,” Cu said.

As part of its growth strategy for mobile, Globe will also improve the usability of its promos to increase share in a market that is seeing steady growth in multi-SIM ownership. It will also enhance its loyalty programs to reduce churn, ensure a more pervasive distribution channel, and deliver superior customer service.

Meanwhile, Globe estimated its capital expenditures to hit around $500 million for 2009 as it ramps up network expansion and upgrades. This is higher than the earlier outlook of $400-$450 million.

The network upgrade and expansion aims to enhance quality of service to customers and expand the reach of Globe’s broadband services.

“We are accelerating our broadband network build to quickly capture emerging opportunities in this market.  Our aim is to build a pervasive presence and deliver reliable, quality connections to our customers. Our WiMax build is on track and now covers additional towns and cities. On the other hand, our 3G with HSPA network is being upgraded to better serve our existing customers and support the exponential growth in demand in the broadband market,” Cu pointed out.

Globe’s capital investments also include funds for expansion of its corporate data networks and its participation in the TGN-IA (Tata Global Network-Intra Asia Cable System) international submarine cable facility.

The completion of Globe’s second international cable landing station in Ballesteros, Cagayan early this year and the TGN-IA cable system servicing business customers are seen to significantly increase Globe’s international bandwidth capacity. These will improve Globe’s redundancy and quality of network services, provide business customers an alternative access around Asia, and a more direct route to the US offering better international voice and broadband connections. These will also support Globe’s thrust to support the needs of the overseas Filipinos and their families back home, Cu said.