Globe lowers 2017 capex

Globe Telecom is lowering capital spending this year as it girds for increased competition with rival PLDT Inc.

The decision comes on the heels of record earnings for the company, owned by Ayala Corp. and Singapore Telecommunications, and at a time when Globe has secured  growth momentum over competition in the industry-wide shift to internet-centered services.

Globe Wednesday said capital spending this year would hit $750 million, lower than the $772 million in 2016. It planned to spend as much as $1 billion last year to roll out new radio frequencies as a result of the acquisition of San Miguel Corp.’s telco assets.

Globe said core profit hit a record P16 billion in 2016, up 6 percent, while service revenue topped P120 billion, also up 6 percent, on “solid growth in data-related products.”

It  ended 2016 with 62.8 million mobile subscribers, up 12 percent. This, however, was lower than the 65 million as of the third quarter of 2016.

As with 2016, most of the spending this year would focus on mobile internet and fixed-line broadband—an area where the Philippines has been lagging behind regional peers in terms of speed and reliability.

Globe has been beefing up funding. It said its board had approved a plan to sell up to P40 billion in bonds, likely in several tranches, over the next three years via a shelf-registration scheme.

Data remained the main driver of growth for Globe.

It said mobile data, for the first time, overtook traditional voice calls as the largest contributor to mobile revenue. Mobile data accounted for 38 percent of the total, versus 37 percent for voice.

Mobile revenue ended 2016 at P91.9 billion, slightly above the P91.2 billion recorded in 2015. The home broadband business saw revenue at P14.5 billion last year, up 28 percent.