Globe nets P6.8B in 9 mos

MANILA, Philippines - Publicly-listed Globe Telecom Inc., a joint venture between diversified conglomerate Ayala Corp. and Singapore Telecom, registered a 19 percent drop in net income in the first nine months of the year due to higher expenses brought about by its capital intensive $700-million network modernization and transformation program.

Globe reported yesterday that its earnings amounted to P6.808 billion from January to September this year or P1.186 billion lower than the P7.994 billion profits booked in the same period last year.

The Ayala-controlled telco provider attributed the decline in net income to higher expenses brought about by its aggressive network modernization and transformation program.

“Consolidated net income after tax stood at P6.8 billion as of end-September this year, down 15 percent from almost P8 billion in the same period last year driven by the continued investment in subscriber acquisitions and network and IT infrastructures,” Globe said.

The company’s capital expenditures jumped 16 percent to P16 billion in the first nine months of the year from P13.9 billion in the same period last year on the back of higher investments on network modernization and IT transformation coupled with the usual spending to expand coverage and capacity of its broadband and mobile networks.

The telco provider reported that its consolidated revenues increased six percent to P61.3 billion from P57.7 billion on the back of the strong performance of mobile, broadband, and fixed line data segments.

Its mobile revenues climbed six percent to P49.86 billion from P47.06 billion despite pressures from competition, peaking penetration levels amid rising incidence of multi-SIM usage, and declining yields resulting from subscribers’ base continued shift from regular pay-as-you-see service to unlimited and bucket offers.

Revenues from broadband service jumped 14 percent to P6.35 billion from P5.557 billion while revenues from fixed line data service increased nine percent to P3.07 billion from P2.83 billion. Fixed line voice segment registered a nine percent decline in revenues to P2.04 billion from P2.23 billion.

“Sustained topline growth was underpinned by strong performances of the mobile, broadband, and fixed line data businesses,” it explained.

The company attributed the growth to the success of the company’s revolutionizing customizable postpaid plans, supported by rising demand for mobile browsing and voice services that continued to thrive with the prevalence of unlimited and value promotions.

To date, Globe’s mobile subscribers rose 10 percent to 32.1 million as of end-September. Increasing demand for internet connectivity, fueled in part by the popularity of social networking sites, coupled with technological advancements that bring about improved internet connection speeds continue to drive growth in the Company’s broadband business.