Globe sets record capex for postpandemic era

The Ayala Group’s Globe Telecom saw core profits jump 9 percent last year as it made its largest annual capital spending bet of P92.8 billion to counter rivals and prepare its network for the postpandemic era.

Globe’s full-year earnings were bolstered by the rapid growth of its home internet business, reflecting the shift to home-based work and schooling during the health crisis, while mobile revenues were nearly flat.

In a stock exchange filing on Wednesday, Globe reported a core profit of P21.2 billion in 2021 versus P19.5 billion the previous year. Service revenues added 4 percent to P151.5 billion.

Globe CEO Ernest Cu said in the filing that earnings were resilient despite the P2.2 billion hit that was booked in the fourth quarter following the devastation caused by Typhoon “Odette” in Visayas and Mindanao.

“We are optimistic that our strategy to focus on innovation to serve our customers better and to address their needs and concerns through various digital platforms, backed by our strong network, will solidify our leading position in the market,” he said.

Revenue shift

The pandemic, meanwhile, has created a noticeable shift in Globe’s revenue sources.

The telco said mobile revenues last year rose 1 percent to P103.7 billion after adding 13 percent more subscribers to 86.8 million.

However, contributions from the segment shrank to 68.4 percent in 2021 from 70 percent in 2020.

Globe’s broadband sales jumped 10 percent to a record P29.4 billion last year, pushing up the revenue contribution to 19.4 percent from 18.3 percent in 2020. The revenue boost came despite a 2.6 percent drop in home subscribers to 3.7 million.

Globe’s corporate revenues closed 2021 with a robust 12 percent growth to P14.2 billion.

The previous year was also characterized by massive spending. Globe said this went to its “aggressive network expansion and upgrade” amid the emergence of competitors such as DITO Telecommunity and fiber internet provider Converge ICT Solutions Inc.

Globe upped its capital spending last year by nearly 54 percent to P92.8 billion while projecting that spending in 2022 would reach P89 billion.

The telco giant built 1,407 new cell sites and installed 1.4 million fiber-to-the-home lines.