PUBLICLY listed mobile services operator Globe Telecom Inc.’s topline is expected to rise faster than rival Philippine Long Distance Telephone Co. (PLDT) next year amid intense competition in the cellular data arena, a global credit-rating agency predicted.
The second largest telecommunications firm in the Philippines, due to its continued acquisition of postpaid subscribers who avail himself or herself of smartphone deals, is set to outpace the growth trajectory of the dominant telco by 2015.
“Competition is intense in the data segment as both telcos continue to offer handset subsidies and are only gradually migrating to volume-based tariffs from unlimited tariffs. Globe’s revenue is likely to rise by mid-single digits in 2015, greater than PLDT’s growth; given it has a higher proportion of smartphone users,” Fitch said in an analysis.
The debt watcher noted that the Pangilinan-controlled multimedia firm will continue to shed its market share annually, given the aggressive stance of its competitor.
“We forecast that PLDT will continue to lose 100 basis points of market share annually to Globe, which increased its mobile-revenue market share to 43 percent from 34 percent during 2010 to 2013,” Fitch pointed out.
The two telcos have been aggressively expanding their infrastructure to cater to the growing need for data services in the Philippines. The two firms are banking on mobile data to increase their revenues this year.
Globe recently completed the roll out of its 3G and 4G facilities. PLDT, on the other hand, is targeting to fully serve 100 percent of the population with its 3G network by the end of the year. It’s LTE network, meanwhile, is set to be expanded to 50 percent population coverage by yearend.
The telco arm of Ayala Corp. is spending P27 billion this year to further modernize its network. The telecommunications company of businessman Manuel V. Pangilinan, meanwhile, earmarked P32 billion for this year’s capital investments, bulk of which will be used to expand its coverage.
The dominant telco’s net income stood at P20 billion in the first semester this year, a 2-percent increase from the P19.7 billion it booked in the same period in 2013.
In the same comparative periods, consolidated service revenues grew 3 percent to P85.43 billion, while expenses rose by a faster 6 percent to P62.52 billion from P59.11 billion.
Globe’s net income stood at P6.8 billion in the first half of the year, a fivefold growth versus the P1.4 billion it recorded in the same period in 2013. Revenues grew by 7 percent to P47.7 billion from P44.5 billion, while expenses rose by a faster 12 percent to P28.62 billion from P25.59 billion.