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Globe COO discusses possible USD800m CAPEX spend in 2016

12 Nov 2015

Albert de Larrazabal, chief commercial officer for Filipino operator Globe Telecom, has said the country’s second-biggest player could spend up to USD800 million in CAPEX in 2016 to meet an explosion in demand for data services. The COO for Ayala-led Globe Telecom stated that he expects ‘more than half’ of the CAPEX will be set aside to cater for anticipated data growth, although he confirmed that the carrier will continue to invest in traditional voice and SMS services in fiscal 2016 to maintain a high quality of service for its customers and support rising usage in existing coverage areas. Further, de Larrazabal said that a portion of the monies will be ring-fenced to modernise the fixed network infrastructure of its newly acquired Bayan Telecommunications (Bayantel) unit – purchased from the Lopez Group earlier this year. Globe is likely to go to the market to raise debt for at least part of the investment, he said, adding that Globe will have a clearer view ‘by the end of November’.

According to TeleGeography’s CommsUpdate, Globe Telecom reported net income of PHP14.1 billion (USD299.9 million) for January-September 2015, up 34% year-on-year, fuelled by the acquisition of Bayantel, and the sale of its 51% stake in Yondu to Xurpas. Globe President and CEO Ernest L Cu noted that the firm’s sustained growth came ‘despite the renewed challenges in the industry’, with momentum supported by an increase in earnings before income tax, depreciation and amortisation (EBITDA) and lower non-operating charges. Globe recorded consolidated services revenue of PHP83.4 billion for 9M15, up 15% on an annualised basis, bolstered by the aforementioned inclusion of Bayantel, which boosted core net income 10% to PHP12.7 billion. Excluding the impact of Bayantel, net income and core income would have risen by 31% and 9% respectively. In particular, Globe noted that each of its three mobile brands reported ‘strong demand’ for mobile data services, generating revenue of PHP15.1 billion in the nine-month period, up 48% year-on-year. At end-September the carrier reported a total of 50.1 million mobile subscribers, up 17% from a year earlier, with the takeover of Bayantel pushing the enlarged group through the 50 million subscriber barrier for the first time in its history.

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