Globe 9-Month Revenues Sustain Growth Momentum; Up 7% at P89.1 Bln

Globe Telecom sustained the top line growth momentum for the first nine months of the year with consolidated service revenues of P89.1 billion, up 7% from the P83.4 billion recorded in the same period of 2015. The robust revenue growth was spurred by the gains across data-related product segments, despite the increased competitive intensity. The company’s effective efforts in providing market-relevant data offers, the best of breed solutions to cater to the evolving needs of its customers, backed by the significant improvements in its wireless and wired data networks, have paved the way for its continued success.

For the first nine months of 2016, Globe recorded net income of P11.7 billion, down by 17% against the P14.1 billion reported in the same period of 2015, as the gains in EBITDA were offset by increases in depreciation and non-operating charges. Note that non-operating charges included P540 million of Globe Telecom’s share in net losses of joint venture, owing to the acquisition of Vega Telecom Inc., as compared to gains recorded in the second half of last year from the consolidation of Bayan and the sale of a 51% stake in Yondu, Inc. to Xurpas, Inc. However, on a normalized basis, excluding the impact of the one-time adjustments brought about by the abovementioned transactions, net income would have declined only by 2% year-on-year. The company’s core net income, which excludes the impact of non-recurring charges, foreign exchange gains and mark-to-market charges, stood at P11.7 billion, still lower by 8% year-on-year, as the gains in EBITDA were not able to offset the increase in depreciation in the period.

“Notwithstanding the serious turn in the level of competition, we are happy that the company’s overall financial results remained strong and still on-track with our guidance for the year,” said Ernest L. Cu, President and CEO of Globe. “We remain steadfast with the expansion of our data network and capacities, to maximize the use of the additional 700 and 2600 megahertz (MHz) frequencies by investing heavily on LTE to give our customer the best experience in terms of the speed and reliability of our internet services.” Mr. Cu added.

Globe Telecom’s mobile revenues slightly grew by 1% year-on-year, reaching P68.3 billion for the first nine months of 2016 from the P67.5 billion reported a year ago, given the continued shift towards digital lifestyles from the core services of voice and SMS. TM, the company’s mass-market brand, posted a 3% growth year-on-year while Globe Postpaid showed a 2% improvement from the same period of 2015. This, however, was partly offset by the slight decline in Globe Prepaid revenues by 1%. At the end of September 2016, the company’s mobile subscriber base reached 65.4 million, up a robust 23% from the 53.1 million subscribers reported in the same period of 2015, still driven by the strong prepaid gross acquisitions during the period.

From a product perspective, mobile data remains to be the top contributor for mobile revenue growth, which rose to P25.2 billion for the nine months just ended or 31% higher than the P19.2 billion reported a year ago. The robust growth in mobile data services was underpinned by the growth in data traffic from 176 petabytes (PB) to 249 PB in the nine months just ended, as smartphone penetration increased to 54% and Globe Telecom’s data-driven product portfolio expanded. On a sequential basis, mobile data declined by 7% from P8.6 billion last quarter to only P8.0 billion in the third quarter of 2016, given the market aggression during the quarter, which affected mobile data yields. Mobile data services now comprised 38% of total mobile revenues, up from 29% in the first nine months of 2015.

The company’s home broadband service revenues grew to P10.7 billion as of end-September 2016 from P7.8 billion last year, with total subscriber base rising to 1.15 million customers. The sustained growth in revenues was driven by the continued increase in fixed wireless customers (up 35% year-on-year), due to the growing demand for internet and data connectivity and the popularity of Globe Telecom’s premium entertainment content from HOOQ, the NBA, Disney, and Netflix among others. In line with the company’s vision for the Philippines to become an admired nation for having first world internet connectivity, the company has started the deployment of fiber broadband technology that aims to provide ultra-fast internet access to two million homes in 20,000 barangays by the year 2020.

Globe Telecom’s corporate data business rose to P7.3 billion for the first nine months of 2016, from the P5.5 billion in the same period of 2015. This was primarily driven by the strong take-up of various data connectivity solutions, managed services, mobility solutions and cloud-based services. Similar to home broadband, Globe is embarking on capacity augmentation of its corporate data network to address the bandwidth requirements of enterprise clients for the use of various data solutions to improve business efficiency, enhance productivity and boost competitiveness.