Globe reports rising profit in 1H11; seeks annulment of PLDT licences

9 Aug 2011

Globe Telecom of the Philippines said net profits climbed almost 9% year-on-year to PHP5.50 billion (USD129.9 million) from PHP5.06 billion in the same period of 2010. The operator said second-quarter revenues also peaked at PHP16.6 billion – the highest for any quarter – driven by a rise in subscribers. At the end of June Globe reported 28.4 million mobile phone users, up from 27.3 million at 31 March 2011.

The telco, which is owned by Ayala Corp and Singapore Telecommunications (SingTel), is the Philippines’ second largest telecom services provider. It is fighting something of a rearguard action in the country, however, in the wake of the announcement in March this year that the country’s number one player, Philippine Long Distance Telephone Company (PLDT), has agreed a deal to buy a majority stake in third-placed operator Digital Telecommunications Philippines Inc (Digitel). The two sides are now hoping to conclude the deal by 26 August, but opponents to the deal (e.g. Globe) have opposed the takeover on the grounds that it is anti-competitive; the enlarged entity would effectively control a roughly 70% share of the domestic mobile market. In the latest turn of events, Globe has reportedly asked the regulator, the National Telecommunications Commission (NTC), to cancel the operating licences of PLDT and its subsidiaries, claiming that they are not Filipino-owned companies. In a filing to the NTC, Globe’s legal counsel Rodolfo Salalima said the award of licences to the operator and subsidiaries including Smart Communications and Connectivity Unlimited Resource Enterprise (CURE) ‘are void from the very beginning’ because a majority of PLDT’s voting shares are in the hands of non-domestic companies or individuals. ‘PLDT and all its subsidiaries cannot engage in public service, not being utilities or Philippine nationals in the contemplation of Philippine laws,’ he added. The matter rumbles on.

Philippines, Globe Telecom (incl. Innove)