Globe Telecom, Inc. ended the first half of 2018 with consolidated service revenues of P67.3 billion with revenues hitting P33.2 billion in the second quarter, up 3% from prior quarter. Sustained topline performance was due to the continued expansion of the 4G and LTE network, and the growing preference of customers towards content-rich offerings and multimedia applications that enrich the Filipino digital lifestyle.
Mobile revenues reached P51.3 billion for the first six months of the year with mobile data still growing at a steady pace. Globe’s mobile subscriber base totaled 65.1 million as of end-June 2018, up 9% from the 59.7 million subscribers in the same period last year. From a product perspective, mobile data, the top contributor to the Company’s total mobile revenues, now accounts for 48% from 42% a year ago. Mobile data service revenues generated a total of P24.7 billion in the first half of the year as video viewing continues to drive the high mobile data consumption (39% increase from 280 petabytes last year to 390 petabytes this period). Mobile SMS and mobile voice revenues, on the other hand, posted P11.2 billion and P15.3 billion, respectively. On a quarterly basis, mobile service revenues stood at P26.1 billion or up 2% from the prior quarter.
Globe’s home broadband business performed well in the second quarter (+4% vs. prior quarter), bringing its first half revenues to P8.6 billion. This was largely attributed to subscriber expansion in fixed wireless solutions (+40%), coupled with the positive market response to the new and more flexible home broadband bundles and plans. Total home broadband subscriber base now stands at over 1.5 million or 22% higher from a year ago. Globe continues to aggressively roll out broadband lines with the company’s bid to roll out ultra-fast internet service to 2 million homes by 2020.
Globe’s corporate data business also posted P5.3 billion in revenues this period, mostly driven by higher customer base, circuit count increase, and higher usage, given the demand for various business solutions, as well as faster and reliable connectivity. Traditional fixed line voice revenues, on the other hand, generated a total of P1.5 billion this period. On a sequential basis, corporate data revenues grew by 5% while fixed line voice revenues declined by 3% against the first quarter.
Globe’s consolidated EBITDA as of end-June 2018 reached P33.0 billion with EBITDA margin of 49%. Compared to prior quarter, consolidated EBITDA increased by 5% while EBITDA margin was at 50%. Total operating expenses and subsidy ended at P34.2 billion.
Net income for the first half of the year stood at P10.1 billion. On a quarterly basis, netcome surpassed prior quarter’s P4.7 billion by 16%. This was mainly due to higher EBITDA, offsetting depreciation charges and non-operating expenses booked for the period just ended. Depreciation expenses remained elevated as Globe continues to expand its network with the acceleration of its LTE and broadband rollout.
Likewise, Globe’s core net income, which excludes the impact of non-recurring charges, and foreign exchange and mark-to-market charges, stood at P10.3 billion. Compared to prior quarter, core net income improved to P5.5 billion, or up 15% from P4.8 billion reported last quarter.
Commenting on these results, Ernest L. Cu, President and CEO of Globe Telecom Inc., stated:
“We are encouraged by the positive business momentum in the first half of 2018. These results validate our strategy in driving the digital lifestyle of our customers, and reaffirm our status as the country’s leader in mobile. Our efforts to modernize further our network play a critical role in our company’s performance. We believe we are well positioned to compete in this highly challenging market going forward.”
Globe spent around P22.9 billion in capital expenditures as of end-June of 2018 to support the growing subscriber base and its rapidly changing and rising demand for data. Of the total capital expenditures spent this period, about 77% was for the data service needs of its customers. To date, Globe has a total of 39,614 base stations, with over 26,200 for 4G to support the service requirements of its customers. To consolidate its position as the data network of choice, Globe continues to invest in its 4G and LTE networks. The Company is currently on track to fulfilling its commitment to deploy LTE services nationwide by the end of 2018 using the 700 megahertz (MHz) and 2600 MHz frequencies.
Moreover, Globe recently announced its full compliance to Memorandum Circular (MC) No. 05-12-2017 issued jointly by the National Telecommunications Commission (NTC), Department of Information and Communications Technology (DICT), and Department of Trade and Industry (DTI), extending the validity of all prepaid load to one (1) year. Effective July 5, 2018, all Globe prepaid load, including those with denominations below 300 pesos, will now carry a one year expiration period. It was on January 6 when Globe and other carriers started implementing the one yearexpiration period for prepaid load worth 300 pesos and above.
In addition, the Globe Board of Directors approved last July 5, 2018, the creation of a separate tower holding company and started the process of incorporation. Following Globe’s press release dated February 8, 2018, the establishment of a tower company will help speed up the building and deployment of more cellular towers and improve the state of internet in the country.
Globe also announced last July 16, 2018 that after a thorough assessment, ABS-CBN Convergence deemed its current mobile business model to be financially unsustainable. As a result, ABS-CBN Convergence and Globe reached an agreement not to renew their mobile network sharing agreement and look at more profitable opportunities in the content business. ABS-CBN and Globe are exploring new ways and synergies that 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 the leading telecommunications company, both companies have decided to shift their focus in maximizing synergies.
Lastly, the Globe Board of Directors approved additional in-year capital expenditure (capex) of US$100 million as it moves forward with upgrading its network to provide first-world internet connectivity in the Philippines. Prior to this new approval, the Company’s 2018 full year capex guidance was at US$850 million. This additional network spending will bring the 2018 capex to around US$950 million, with the additional investment to be spent in the balance of the year.