Globe earmarks record $850-M capex for 2015

Top telecommunications firm Globe Telecom will allot $850 million in capital spending (capex) this year which is almost double from 2014 when it posted a record P14.5 billion profit or a 25 percent jump from a year ago driven by solid performance in its mobile, broadband, and fixed line data businesses.

Globe earmarked $650 million in actual capex plus $200 million carried over from last year.

Consolidated service revenues reached a new high of P99 billion, besting the previous high of P90.5 billion in 2013.

The company’s 2015 capex is almost double the $450 million actual spending in 2014, of which, about 75 percent would be spent for data-related investments, on LTEmobile, @Home as well as 3G capacities.

Globe said with the growing demand for data and internet connectivity, it anticipates approximately 75 percent of the capex would be related to data, including spending for deployments of LTE mobile and LTE @Home, capacity and coverage augmentation of the 3G, HSPA+ and DSL network, as well as requirements for domestic transmission and international cable capacities.

The balance of the capex is expected to be spent for business support systems in line with product innovations, and other corporate expenditures.

With the $200 million capex, which was initially estimated in 2014, expected to slide into the early parts of 2015, total cash CAPEX for 2015 would be approximately $850 million.

The solid full-year results were buoyed by a strong second half performance, with fourth quarter revenues at an all-time quarterly high, peaking at P26.3 billion, five percent higher than the previous best of P25 billion in the preceding quarter and a 13 percent improvement from the P23.2 billion from the same period last year.

The company said in a statement that rapid growth momentum for Globe’s broadband businesses continued in 2014, registering steady double-digit growths of 22 percent for revenues and 37 percent growth customer base year-on-year.

Globe ended the year with nearly 2.8 million broadband subscribers, with the strong growths registering across fixed broadband, wireless broadband and long-term evolution (LTE) solutions of 16 percent, 42 percent and 377 percent, respectively.

The introduction of more affordable products and competitive tablet bundles throughout the year and the expanded pervasiveness of the fixed and wireless broadband network stimulated the robust performance in the year just ended.

This was driven by the sustained demand for data connectivity across the mobile, broadband and fixed line data businesses, which improved by seven percent, 22 percent and 17 percent, respectively, given the increasing affordability of the service and compelling gadget bundle offers backed by Globe’s improved network with 100 percent 3G and 4G coverage completed during the year.

“2014 is another banner year for Globe Telecom, reaching the best-ever consolidated service revenues, EBITDA, net income and core net income, despite intensifying competition Our full year results are testaments of our continued commitment in creating a complete digital experience, delivering best-in-class products and services and a whole new level of customer service experience for our customers,” Globe president & CEO Ernest Cu said.

“Reaping the benefits of our modernized network, with full 3G and 4G coverage, we have seen a steady and healthy growth in both our mobile and broadband businesses, surpassing all of our expectations, and we are confident in sustaining this momentum moving forward. Even as we face new challenges in the coming year, we are optimistic that the new innovations and product offerings we have lined-up will continue to be relevant to our customers, provide growth across all our businesses and create value for our shareholders,” Cu added.

Mobile telephony revenues, which contributed 79 percent of consolidated revenues, grew seven percent year-on-year from the prior year’s P72.8 billion to P78.1 billion in 2014, propelled by growth in the Globe Postpaid and mass-market TM brands. Driven by the rapid expansion of the postpaid base, which stood at 2.3 million at the end of the year, Globe Postpaid revenues improved 11 percent to P29.9 billion from P27.1 billion last year.

For the prepaid segment, TM had another banner year with a 14 percent growth in revenues and a 21percent increase in customer base compared to last year. TM now accounts for 51% of the total mobile subscriber base. Despite the continued pressures on yields with the increasing multi-SIM incidence in the market, as well as the popularity of value-based bucket and unlimited offers for voice and SMS services, total prepaid revenues improved by five percent to P48.2 billion from P45.7 billion a year ago, signaling its return on a growth track.