Globe to spend bulk of 2016 investments on SEA-US cable

MANILA, Philippines - Globe Telecom Inc., jointly owned by conglomerate Ayala Corp. and Singapore Telecommunications (Singtel), is set to spend bulk of its $85 million investments in the proposed $250-million Southeast Asia and United States (SEA-US) undersea cable system in 2016.

Globe chief operating officer Gil Genio said the proposed investments would be used over a three-year period as the construction of the proposed undersea cable system would be completed after two years.

“We don’t have to build right now because of the way submarine cable system works. We need to make it ready by the time the actual fiber goes from the sea to the shore so that is at least a year away from now,” he added.

Genio disclosed that about 80 percent of the amount would likely be spent by Globe in 2016.

“On the first year is not much because most of the construction will be in 2016 and a little in 2017,” he said.

Aside from Globe’s GTI Corp., other members of the consortium include PT Telekomunikasi Indonesia International (Telin), Telkom USA, RAM Telecom International (RTI), Hawaiian Telcom, and Teleguam Holdings (GTA).

The 15,000-kilometer underground cable system would link Manado in Indonesia, Davao in the Philippines, Piti in Guam, Oahu in Hawaii, and Los Angeles in California providing superior latency delivering additional 20 Terabits per second utilizing 100 gigabits per second transmission equipment.

The cable system is expected to provide more efficient connectivity to 1.5 billion people through route diversity from the North Pacific and avoiding earthquake prone areas in East Asia.

The Philippines has become a preferred destination for the outsourcing and offshoring industry including major call centers, business process outsource providers, global financial institutions, and a host of other multinational companies that require very large bandwidth.

Globe also invested in the 8,900-km Southeast Asia-Japan Cable (SJC) system that links Brunei, mainland China, Hong Kong, Japan, Singapore and the Philippines, including the option to link with Thailand.

It is also part of the East Asia Cable system, Asia Pacific Cable Network-2, Tata Global Network-Intra Asia cable system, the City to City cable system and is interconnected with major Trans-Pacific Cable systems encompassing the Unity, Tata Global Network-Pacific, and the Japan-US Cable Network.

The listed telecom provider has existing domestic cable systems catering to transmission requirement connecting Luzon to various islands in Visayas and Mindanao.

Globe recently raised P10 billion from the issuance of new preferred shares to bankroll its capital expenditures this year.

Globe has earmarked P29 billion for its capital expenditures this year or almost the same level as the P28.99 billion spent in 2013.