Not as simple as ABC for ABS-CBN

17 Aug 2016

Filipino media conglomerate ABS-CBN Corporation, part of the Lopez Group of companies, reports that it succeeded in cutting the operating costs for its fledgling MVNO ABS-CBN Mobile, thanks to the signing of a deal with its host network provider Globe Telecom that resulted in a halving of its annual wholesale fees from PHP400 million (USD8.65 million) to PHP200 million. Nonetheless, the group reported that subscriber numbers at the start-up continued to tumble in the first half of this year; the MVNO closed out June 2016 with 520,000 customers, down 13% from the start of the year and significantly lower than the 1.7 million figure reported in early 2015.

Chief financial officer Aldrin Cerrado told reporters that ABS-CBN’s strategy to trim its wholesale access charges is in line with its plan to rein in the start-up’s operating expenses and rising losses, while simultaneously seeking a better growth strategy for ABS-CBN Mobile. TeleGeography’s GlobalComms Database notes that in May 2013 ABS-CBN signed a five-year wholesale agreement with Globe Telecom via ABS-CBN Mobile, saying that it planned to invest more than PHP2 billion in the new venture during 2013-2016. The MVNO went on to launch commercial services in Q4 2013, and amassed 689,000 subscribers by the end of Q1 2014, but after peaking at 1.7 million at the start of 2015 the user base entered a steady decline.

In light of the recent problems, Cerrado has reassured the market that ABS-CBN Mobile will continue trading, but admitted it was ‘scaling down’ its ambitions in a bid to better manage its expenses. When asked, however, he declined to answer whether or not ABS-CBN would seek to renew its agreement with Globe Telecom when it expires in 2018.

Philippines, ABS-CBNmobile (MVNO)