Battle for subscribers heats up: PLDT, Globe post double-digit growths in first half

MANILA, Philippines - Dominant carrier Philippine Long Distance Telephone Co. (PLDT) and rival Ayala-led Globe Telecom Inc. continued to slug it out for supremacy in the local cellular phone market through value for money offerings.

PLDT president Napoleon Nazareno said the Group’s combined cellular subscribers grew five percent to 74.4 million in the first half of the year amid the cleanup of inactive accounts of one of its subsidiaries.

Nazareno said the PLDT Group’s subscriber base consisted of 31.8 million for Talk N’ Text, 25.5 million for Smart Communications Inc., and 16.1 million for Sun Cellular’s Digital Telecommunications of the Philippines Inc. (Digitel).

 He said prepaid subscribers reached 71.2 million and accounted for 97 percent of the total subscriber base while postpaid subscribers totaled 2.2 million for a share of three percent.

On the other hand, PLDT said combined broadband subscriber base reached 3.2 million while fixed line subscribers stood at 2.1 million, bringing to 78.7 million the total fixed, wireless, and broadband subscriber base of the PLDT Group.

Nazareno said the PLDT Group sees the growth in mobile Internet browsing revenues accelerating with higher smartphone ownership as prices are on the decline, expanding second hand smartphone market, and the aggressive marketing by distributors of Chinese-made handsets.

Currently, he said the average smartphone penetration rate of total subscriber base is only 10 percent.

For its postpaid segment, he explained that smartphone penetration rate is about 54 percent half of which generated data revenues.

PLDT’s net income inched up by two percent to P19.7 billion in the first half of the year from P19.3 billion as consolidated service revenues went up by two percent to P75.7 billion from P74.2 billion.

Globe subscribers base surges 14%

Globe president and chief executive officer Ernest Cu said the company’s subscriber base surged 14 percent to 36.1 million in the first half of the year due to the success of its customizable and value-based product offerings amid rising demand for mobile browsing services.

“The company’s robust revenue growth in the first half was driven by strong performance of all our business segments complemented by the strong subscriber growth during the period, stemming from aggressive acquisitions in both the postpaid and prepaid business,” Cu stressed.

Overall subscriber net additions remained robust with close to three million in the first half while keeping blended churn to 5.6 percent.

Cu said postpaid subscribers jumped 18 percent to about two million while prepaid subscribers of Globe grew five percent to 16.9 million and that of TM surged 23 percent to 17.2 million.

On a year to date basis, Globe said gross acquisitions increased by over 2.4 million subscribers. Subscriber acquisitions in the second quarter alone remained strong at 7.4 million subscribers, over 85,000 SIMs higher than previous quarter’s level, which came mostly from the company’s mass market brand TM.

Cu said the company’s modernized network infrastructure would lift capacity and boost network performance and thus further enhance Globe branding moving forward.

Globe booked a nine-percent increase in revenues to P44.5 billion in the first half of the year from P40.8 billion. Amid the strong growth in revenues, the company’s net income fell 72 percent to P1.4 billion due to higher depreciation charges with the completion of the company’s network modernization and transformation program.

 Cu said the company managed to booked robust performance in the first half of the year despite the ongoing network and information technology (IT) modernization initiatives and expects stronger competition in the second half of the year.

“We anticipate competition to escalate in the second semester given the gains we’ve realized in the past, and anticipated launches of in-demand mobile devices from Apple and Samsung in the second half of the year. We’ve built up great momentum during the first semester, and we need to strive harder to sustain it in this very competitive and fast paced environment,” Cu said.