Globe growing ‘as expected,’ chief says

MANILA, Philippines—Ayala-led Globe Telecom is on track for further growth with a growing postpaid base supported by network transformation and an expanding Philippine economy, officials say during the Globe Innovation Forum in Makati City.

The Philippine telecommunications giant performed “just as expected” in the third quarter of this year and has a total of 32 to 33 million clients to date, Globe president Ernest Cu tells BusinessMonday on the sidelines of the event. “Trends are continuing. The strength we’ve seen in the beginning of this year seems to be flowing through, maybe even through to the fourth quarter,” Cu says.

The telecommunications industry benefits directly from good economic performance, Cu says, referring to the Philippines’ consumer- and services-driven 6.1 percent expansion in the first half of 2012. It’s the third best economic performance in Asia after China and Indonesia.

“We’re riding that wave a bit. I think we also scaled up momentum and the public believes the transformation we’re doing has a great effect on the kind of services they will receive, despite the negative advertising of our competition,” Cu says.

Globe will announce its third-quarter results on November 9.

“Network transformation is 60 percent done. We are committed to 70 percent by yearend and we will overshoot that,” Cu says. Network transformation in Makati City, for example, will be completed around mid-next week, Cu says. The company’s $790-million network expansion and IT transformation program is expected to be completed nationwide by early 2013 and will serve the company’s growth needs for about five years, he says.

Globe controls about a third of subscribers in the local telecommunications market while the rival group of Philippine Long Distance Telephone Co. virtually controls the rest since regulators have approved its merger with Digital Telecommunications Philippines Inc. in October last year.

In a plenary presentation, Globe Business head Jesus C. Romero says the company’s modernization program did not just involve upgrades of existing equipment but an entirely brand-new network that results in clearer and more stable voice calls, quick delivery of text messages, less dropped calls, and better Internet connectivity for subscribers.

The company has, in effect, “future proofed” its network because it can quickly adopt and launch new technologies such as the new long-term evolution (LTE) systems, Romero says.

Cu has said the company’s modernization was in line with efforts to keep up with the demands of consumers who have increased the use of the Internet on their mobile phones. He said the company’s commercial LTE mobile services will enable a significant jump in Internet connection speeds for users who can afford it.

LTE is the newest mobile data technology being adopted by telecommunications companies around the world, including the two industry giants in the Philippines. It offers faster and more reliable connection speeds for subscribers, but, as with all new systems, is still more expensive to use than older technologies.