Globe sets 2018 capex budget at $850M

Industry giant Globe Telecom set its 2018 capital spending budget at $850 million (P42.4 billion), around the same amount as in the previous year.

Globe said in a stock exchange filing on Friday that the amount would help the Philippines become “an admired nation for having first world internet connectivity.”

This comes as Globe and main rival PLDT Inc. continue to draw criticism over the quality of internet in the Philippines, where services are described as slow and expensive.

READ: Jack Ma unimpressed by PH internet speed

President Rodrigo Duterte had separately vowed to break the industry duopoly by inviting foreign telcos, including those from China, to invest in the country. Duterte hoped a deal with a new investor could be reached early this year.

READ: Duterte wants telco duopoly broken by March

Earlier, PLDT said it had allotted a record P50 billion in capital spending in 2018 to fend off competition and improve internet services.

“Majority of the company’s capex for 2018 is geared to meet customer demand for more bandwidth-intensive content, which, in turn, will support the revenue momentum of our data-related services,” Globe CEO Ernest Cu said in the company’s regulatory filing on Friday.

Globe noted that spending had averaged about 31 percent of its revenues since 2015. It said spending has also been progressively going up, likely in response to criticism that industry incumbents were not doing enough to raise the level of service for their customers.

“We continue to be efficient in our network build, evidenced by the superiority of our mobile network, in terms of higher 3G and LTE availability both on a regional and nationwide basis,” Cu said.

Cu said that for the first nine months of 2016 and 2017, Globe’s mobile data network carried over 2.4 times the traffic of PLDT.

Globe, which often cites regulatory bottlenecks in the permitting process as slowing down the rollout of crucial telco infrastructure, said funds would be used to widen its LTE coverage and so-called MIMO (multiple input, multiple output) technology.

According to Globe, this allows a mobile network to multiply the capacity of a wireless connection without requiring more antennas. It is expected to increase wireless throughput and efficiently serve more users at higher data rates with better reliability.

For home broadband, speed and range benefits of MIMO technology allow customers to have reliable data connection especially since more and more customers are now using video streaming services, Globe said.

Globe is spending more to improve internet services, given that its data segment accounted for over half of its revenues during the nine-month period of 2017. /jpv