ABS-CBN Corp tight-lipped over telecom unit’s future despite containing losses

10 Apr 2018

Philippine information and entertainment multimedia conglomerate ABS-CBN Corp reported that it was able to contain and control losses from its mobile unit ABS-CBNmobile last year, but as yet is undecided on whether it will renew its mobile network sharing agreement with Globe Telecom, which expires in June 2018. ABS-CBN chief financial officer Aldrin Cerrado confirmed: ‘We’ve managed to contain the losses last year. For ABS-CBNmobile, we’re still in discussion with Globe, so in the next few weeks, most likely, we will probably have some decision on ABS-CBNmobile. We’re still in discussion with Globe in terms of the plans for the mobile business of ABS-CBN.’

Mr Cerrado said that the MVNO’s FY 2017 losses were ‘almost the same’ as the net loss of PHP560 million (USD10.8 million) it booked in FY 2016, which itself was marginally lower than a PHP600 million net loss in FY 2015. According to TeleGeography’s GlobalComms Database, in a bid to restructure its cost base, in 2016 ABS-CBN Corp, a part of the Lopez Group of companies, succeeded in cutting the operating costs for its MVNO business, 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 to PHP200 million. At the time, Cerrado reassured the market that ABS-CBNmobile would continue trading, but admitted it was ‘scaling down’ its ambitions in a bid to better manage its expenses. The CFO later told reporters that the group was hopeful that its mobile business would break even in 2017, noting: ‘We were able to bring down the losses by about PHP100 million, since it was close to PHP700 million before, now it’s about PHP600 million, and we hope to at least break even for 2017.’ In the event, the projections proved overly ambitious.

In May 2013 ABS-CBNmobile signed a five-year wholesale agreement with Globe Telecom, and ABS-CBN said it planned to invest more than PHP2 billion in the venture during 2013-2016 to get it up and running. The MVNO launched commercial services in Q4 2013, and within its first five months had amassed an impressive 195,692 subscribers. However, the MVNO’s base yo-yoed dramatically in 2015 and 2016, peaking at over 1.7 million before slumping to less than 500,000 and recovering to 904,000 by the end of 2016. ABS-CBNmobile reportedly reached the one million subscriber mark once more by 31 March 2017, a figure which is estimated to have risen to 1.26 million by the year end.

Philippines, ABS-CBNmobile (MVNO)