GLOBE Telecom Inc. has allocated $750 million (P37.448 billion) for its capital expenditures for 2017 to further improve its services in major cities and the countryside for both the mobile and fixed-line segments.
The amount is $250 million (P12.48 billion) less than the capital outlays last year, which was pegged at $1 billion (P49.931 billion), due to Globe’s part in the acquisition of San Miguel Corp.’s telco assets.
Ernest L. Cu, the company’s president, said the lower capital requirements this year signify that the company is “balancing revenues, cash generation and capital” this year.
“Last year we had higher than the usual capital expenditures because of the San Miguel transaction. I think we are okay this year already,” Cu said in an interview. “It’s still at the $750-million level.”
Bulk of the capital will be spent on improving the data services of Globe.
“We’re the leader in data so we’d have to do that,” he said.
Last year saw Globe setting up thousands of cell sites after acquiring a swathe of frequencies from San Miguel. For the coveted 700-megahertz (MHz) frequency alone, the company deployed 500 sites around major cities and provinces to extend its indoor and outdoor data coverage.
This year Globe aims to deploy 900 sites under the 700 MHz, Globe Spokesman Yolanda C. Crisanto said via a text message.
Globe has also set a firm target of setting up 400,000 broadband lines across the Philippines by year-end to meet its goal of providing ultra-fast Internet in 2 million households over 20,000 barangays by 2020.
This developed after deploying 260,000 home broadband lines in 2016.
The whole program will cost Globe a whopping $2 billion (P99.86 billion), aimed at “redefining home-broadband experience for Filipinos.”
Despite these huge investments, Globe’s capital requirements are fully financed through the loans made last year.
“We are all done with the financing. The bank loans were made. We have enough equity,” Cu said.
The company signed multiple loan deals with several local banks last year. It borrowed P5 billion from Union Bank of the Philippines last November, and another P20 billion from Metropolitan Bank and Trust Co. two months prior.
Globe booked P11.7 billion in net profits in the first nine months of 2016, about P3.6 billion down from the P14.1 billion it made during the first nine months in 2015.
Its consolidated service revenues were at P89.1 billion, while operating expenses and subsidy were at P51.58 billion.