ABS-CBN cuts ties with Globe on mobile network sharing

MANILA, Philippines — ABS-CBN Convergence, the broadcast giant’s mobile telecommunications unit, is not renewing its network sharing agreement with Globe Telecom as the partnership is set to expire this year.

In a disclosure to the Philippine Stock Exchange, ABS-CBN said it previously signed a five-year agreement with Globe to deliver content and telecommunications services on mobile devices through its ABS-CBNmobile brand.

“After a thorough assessment, deemed its current mobile business model to be financially unsustainable,” the company said.

“As a result, ABS-CBN Convergence and Globe reached an agreement not to renew their mobile network sharing agreement and to look at more profitable opportunities in the content business,” it added.

ABS-CBN and Globe said they are exploring new ways and synergies that would complement their business models.

Leveraging on ABS-CBN’s expertise as top content provider to the Filipino audience and the vast reach of Globe as a leading telecommunications company, both companies have decided to shift their focus in maximizing synergies.

Among these product synergies are the promotional bundling of ABS-CBN TVplus boxes with Globe At Home prepaid WiFi and the availability of ABS-CBN TVplus’ KBO (Kapamilya Box Office) and iWant TV over-the-top services to all Globe subscribers, which are already commercially available.

Meanwhile, the company said all ABS-CBNmobile prepaid, postpaid and Sky Mobi subscribers will continue to enjoy text, call and data services until the final date that will be approved by the National Telecommunications Commission (NTC).

In November, ABS-CBN chief financial officer Aldrin Cerrado said the company in reviewing its mobile business strategy, in a bid to trim down the losses of ABS-CBNmobile.

“The direction is to have a mobile strategy in order to maximize the revenue potential of our content in many platform as possible including the mobile platform,” Cerrado earlier said.

In the first quarter of the year, ABS-CBN reported a 31 percent increase in net income to P411 million from P314 million in the same period last year.

This was despite a 5.9 percent decline in revenues to P9.01 billion from P9.58 billion in the same period a year ago.

Advertising revenue, in particular, slid by 10.2 percent to P4.35 billion as of end-March from P4.84 billion last year due to fewer advertising placements this year.

Consumer sales decreased by 1.5 percent to P4.67 billion in the first quarter from P4.74 billion a year ago due to lower theatrical receipts from global business and ABS-CBN Films, as well as lower revenue from Sky Cable’s business.