GLOBE Telecom Inc. stressed the need to be ahead of its rivals this 2011 in this so-called “hypercompetitive industry” after it reported a 22.4-percent drop in net income last year.
The cellular firm, owned by Ayala Corp. and Singapore Telecom, reported a full-year net income of P9.7 billion in 2010 from P12.6 billion a year ago. This was a result of flat revenues and higher operating expenses (opex) incurred during the year.
Consolidated service revenues stood at P62.6 billion, lower than P62.4 billion recorded in 2009, of which mobile revenues dipped by 6 percent to P50 billion brought about by intense price competition. However, revenues from the fixed-line and broadband business—which comprised 19 percent of consolidated service revenues—grew 32 percent last year.
Globe booked an opex of P29 billion last year, up 12 percent from P26 billion in 2009. It spent for the modernization of its network as its subscribers grew by 14 percent from 23.2 million in 2009 to 26.5 million in 2010. Prepaid subscribers accounted for 93 percent of full year’s net incremental subscribers which reversed the previous year’s net reduction of about 1.4 million SIM cards. Globe’s cellular postpaid and broadband subscribers at end-2010 stood at 1.1 million each.
Capital expenditures for 2010 totaled to P19.5 billion compared with P24.7 billion the prior year. Of this amount, about P9.1 billion was spent for wired and wireless broadband capacities while around P7.9 billion was used to expand and upgrade the mobile network.
For 2011, Globe expects to spend an additional $500 million, including carryover spending from projects started in 2010. “This year, we will continue to build on service quality as a key differentiator for Globe. We will implement a proactive approach in meeting the upsurge in voice and data requirements across all customer segments, including the larger enterprises. We will also improve power and transmission management to meet our quality objectives in terms of network availability and capacity,” said president Ernest Cu.
He said the P2.3-billion net income Globe recorded in the fourth quarter last year was “encouraging.”
From October to December of last year, Globe booked an all-time high of P16.2 billion in revenue. Mobile revenues in the last quarter were 9-percent higher than the prior quarter and are the highest in six quarters, given the strong demand for voice and data services during the holiday season.
“Our postpaid brand delivered record subscriber additions, while our prepaid brands’ performance have improved across all key metrics, driving good growth in top-up and usage levels. Meanwhile, our broadband and corporate data businesses continued to grow steadily, providing good counterbalance to a maturing mobile business. This should provide us momentum going into 2011, which we expect to be another challenging year,” said Cu.
In the fourth quarter, Globe further intensified its subscriber acquisition campaign with the introduction of new and affordable deals. “We believe our programs are starting to gain traction. However, as this is a hypercompetitive industry, we need to move with even more urgency toward transforming ourselves and the way we operate in order to be the brand of choice,” added the Globe executive.
Globe declared this year its first semi-annual cash dividend of P31 per common share, payable on March 18 to shareholders on record as of February 22. The total dividend payment of P4.1 billion represents 84 percent of Globe’s 2010 net income.
Globe shares rose 2.7 percent to P800 pesos at the noon close of trading yesterday, the highest since January 21.
