GLOBE Telecom Inc. is seeking to invest in “new” noncore business that can create additional revenue streams for the company.
In a stock exchange filing Tuesday, Globe said its board had approved the establishment of a wholly owned holding company that would undertake “new and strategic businesses.”
This is the first time the company, owned by Ayala Corp. and Singapore Telecommunications Ltd., announced concrete steps to invest outside its core business.
While it gave no other details, the development suggests that Globe is moving in the same direction as dominant telco Philippine Long Distance Telephone Co., which has taken early steps to invest outside its core telecommunications services.
Last year, PLDT spent 333 million euros for a minority stake in Germany’s Rocket Internet, and more recently, put in $15 million for a stake in iflix, which provides television streaming services similar to Netflix. PLDT, through its units, also has investments in various media assets in the Philippines, including a television station and newspapers.
“We can say we are looking at more non-core businesses, as well as any adjacent business but still leveraging on our strengths as a telco,” Yoly Crisanto, Globe head of corporate communications, said in an interview Tuesday.
The establishment of a specific holding company also suggests that Globe was serious in this segment.
“The creation of this holding company aims to provide more focus on developing and growing said businesses,” Globe noted in its disclosure.
Projected investment figures were not immediately available, Crisanto said.
Globe, which has been tracking earnings growth as of the first quarter of 2015, earlier said it had budgeted as much as $850 million in capital spending for this year, with most of the amount going to data-related investments given increasing demand for Internet services.
Cheap smart phones and the popularity of social media and instant messaging are also behind this trend.
Rival PLDT said last week that capital spending for 2015, which was also mainly for bolstering Internet services, would rise from P39 billion to “over” P40 billion, PLDT president Napoleon Nazareno said capital spending would likely remain elevated through 2017.