Globe to Spend $1.46 Billion as Rivalry Shifts to Homes

(Bloomberg) -- Globe Telecom Inc. will spend a record 70 billion pesos ($1.46 billion) this year to boost its data infrastructure as competition shifts to servicing people working from home.

The Philippines’ second-largest telecommunications company expects “heightened activity” in home broadband this year as competitors PLDT Inc. and Converge ICT Solutions Inc. vie for subscribers working from home, Globe President Ernest Cu said in a virtual briefing. Its capital spending will increase by 16% to build and upgrade cell sites and expand home broadband capacity, Chief Finance Officer Rosemarie Maniego-Eala said.

Mobile data -- which accounted for almost half of Globe’s revenue -- will recover in 2021 as the economy reopens further and vaccines are rolled out, Cu said. Globe’s mobile-phone subscribers are “highly sensitive” to movement restrictions imposed last year amid the coronavirus pandemic, he said.

Globe closed Wednesday 1.9% higher to its highest in over a week, after reporting fourth-quarter and full-year 2020 earnings. The stock is up 0.4% this year compared with the benchmark PSEi’s 0.8% loss since end-2020.

Other Highlights

• Globe is monitoring DITO Telecommunity Corp.’s launch next month, even as Cu expects the new entrant to take up to two years to take off
• Service revenue may rise by low- to mid-single digit this year after falling 2% year-on-year to 146.4 billion pesos as mobile revenue declined 7% to 103.1 billion pesos
• Active users of GCash, the company’s online wallet, increased almost fourfold, with 1 trillion pesos in transactions last year
• Globe declared a first-quarter cash dividend of 27 pesos per common share, matching its payout for the same period in 2020. Dividend payment total is about 3.6 billion pesos
• To see earnings: Globe Telecom 4Q Net Income 2.74B Pesos

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