Ernest Cu
These are the worst of times, but also possibly the beginning of the best of times.
This is true for corporations nimble enough to quickly pivot and take advantage of the ever-present opportunities even amid the raging COVID-19 pandemic and strong enough to take the serious economic blows that have already felled thousands of corporations and left millions of Filipinos out of work.
Globe Telecom Inc., the telecommunications unit of the Ayala Group, is determined to be one of the Filipino companies that will come out of the latest public health and economic crisis stronger and more profitable than ever.
Its latest financial statement indicates that it may well be on its way to achieving just that, with its consolidated service revenues in the first half declining by just 1 percent to P72.4 billion from P72.9 billion in the same period last year.
This despite the suffocating quarantine measures put in place starting March to stem the spread of the highly contagious COVID-19 that practically ground the Philippine economy to a halt.
Globe president and CEO Ernest Cu said the Globe team “surprised ourselves” as total revenues went down by just 1 percent, considering that the country’s gross domestic product contracted by a worse-than-expected 16.5 percent in the second quarter.
“I think that was a very decent performance given the circumstances the country was in,” Cu told the Inquirer.
Globe told the Philippine Stock Exchange that data services remained the top revenue contributor, now accounting for 75 percent of total service revenues from 70 percent in the first half last year, given the surge in consumption as Filipinos stayed in their homes and shifted to online activities, from working or learning at home to video and teleconferencing, entertainment, and online shopping and banking. Strict quarantine measures are gradually loosening across the Philippines and as such, more parts of the battered economy are restarting operations.
But even then, the usually upbeat Cu with the go-get-them attitude has adopted a more cautious stance, mainly due to the economic headwinds the telecommunications giant will have to battle against until at least the end of the year.
“Personally, I am quite concerned about the remittances falling as much as they did in May. I’ve always seen remittances as the bedrock of this economy, where the Philippines is insulated from various financial types of meltdowns because typically, meltdowns happen in different parts of the world, not global. And one thing that kept us afloat was the steady flow, if not growth, of remittances,” said Cu.
Globe Telecom, however, will not be scared into doing nothing. On the contrary, Cu said the priority in these challenging times is to forge ahead with its network expansion, as the use of telecommunications services will only accelerate further.
“We want to be able to try and get back to the ambitious build numbers that we’ve put in place. Obviously the easing up of the permit situation is going to help us, hopefully. We are seeing some positive signs. We noted the country needs facilities. We are going to try to deliver those facilities as best as we can. We’re not 100 percent as we were in terms of people out in the field. Actually, we need more than 100 percent now because we want to catch up with whatever we lost in the first half in terms of capacity,” Cu said.
The other top priority is to better understand the changing needs of consumers who are adapting to the new reality.
“It’s so different now in terms of our lifestyles. The lifestyle of a student, the lifestyle of a business person or even a housewife is different. Everyone’s lifestyle is different. It needs for us to do a reset of how we view consumer needs for telco and other digital services. People who once shunned our digital money services are now adopting them in droves, as an example. People who didn’t need it in the past because they can pay in cash now are doing e-money. Many things have changed in people’s mindset and habits and that’s for us to deliver, the right combination of services that they will need,” Cu said.
And while Globe Telecom faced the challenges of the pandemic as a corporation, it ensured that it did not leave its people behind. By using its own productivity tools and harnessing the power of the internet, it was able to quickly migrate online. Globe has also made the decision after much soul-searching for the staff to work from home at least until the end of the year.
“We are an early Zoom user. We are the Zoom evangelists in the Philippines because we also carry Zoom as a product and service,” said Cu, referring to the videoconferencing platform that saw a surge in popularity and use because of the pandemic.
Cu himself works from home and has discovered the joy of cooking for his family. He has also concluded that the work-from-home (WFH) arrangement can indeed work, as proven by Globe’s forging of joint ventures and successful bond offering during the health crisis.Cu sees the work-from-home arrangement becoming a permanent part of corporate life, just one of the changes forced by the pandemic that will likely be irreversible, along with the use of electronic money such as its popular Gcash facility.
“I think the reduction in the use of cash is going to be permanent. [Also] the WFH concept, or some form of hybrid, because it’s proven that it does work. How do you measure productivity? I think all of us are going to do a bit of forward thinking on how to measure output. Output is not about the number of hours you put in work. Output is about achieving our goals,” Cu said.
And one of Cu’s goals is to prepare the company for the recovery in the Philippine economy, hopefully starting next year. He predicts that the COVID-19 is not going away, but something that everyone will have to deal with, just like the common flu. Protection can come with the promised vaccine, but until then Filipinos and the economy will have to live side-by-side with the virus.
“We are hopeful for 2021, that there would be indeed a recovery. We can’t stay long like this in recession forever. As the economy expands and the need for telco services expands, we hope to ride that wave once again,” Cu said.