Globe Telecom board approves $300M additional capex, increased to $1B

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globe telecom

Manila, Philippines — One of the countries major telecommunications and Internet service providers — Globe Telecom — received a final approval to increase its capital spending this year. The funds to be mainly disposed in deploying frequency it gained access which the telco acquire from the San Miguel Corp.’s telecommunications subsidiary last year.

Globe said in a Philippine Stock Exchange (SE) filing on Thursday that the company’s board approved an additional $300 million capital spending increase, which would bring its total new capital expenditure (capex) this year to $1 billion.

Globe explained that the $160 million of the additional budget was reserved for mobile; a $50 million for corporate data, and $90 million for its Internet broadband service. The Ayala-led telecommunication and ISP unit had originally totaled a capital expenditure this year at $750 million. The company added that the capex-cashflow would range from $750 million to $810 million, which is depending on the final network buildup completion in the fourth quarter of the year.

“We are leveraging our additional 700MHz (Megahertz) and 2600Mhz spectrum by investing heavily in LTE to improve both mobile data and fixed wireless broadband,” Globe Telecom CEO Ernest Cu said. “The company is now in the best position more than ever to deliver the best video platforms and expand our data services, in line with the future of our business.”

The telco giant secured an access to additional telecommunication frequencies in th country after acquiring the part of San Miguel Corporation’s Vega Telecom on May 30.

For starters, The country’s telecomunication adn ISPs duopoly – Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom – acquired the San Miguel Corp’s valuable 700-megahertz spectrum, a frequency that covers more ground and penetrates indoors. In a disclosure, PLDT-Smart said the buyout deal involves purchasing half of Vega Telecom, SMC’s holding firm for its telecommunication and ISP assets, for a whopping P69 billion and with the other half will be taken up by Globe.

In the statement, Globe Telecom said it was planning to deploy additional 700 LTE 4G 700 cell sites, close to 2,700 LTE 2600 sites and additional core and transport upgrades.

The telco mammoth started the deployment of fiber broadband Internet technology that would provide “ultra-fast internet access” to two million houses in 20,000 barangays by year 2020.

For the first half of this year, Globe’s data-related revenues accounted for 50 percent of consolidated service revenues, a significant increase from 37 percent in the same period of 2015.

The total Internet broadband revenue, which also consist of mobile data, home broadband and corporate data services, reached P29.6 billion in the first half of 2016, a 48 percent growth from the P20 billion YoY. — TheVader.com


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