Globe revenues up 6% to but net income down 5%

Boosted by the popularity of datarelated products, Globe Telecom, Inc. hauled in R127.9-billion consolidated service revenues for 2017, 6 percent higher than 2016.

It was the highest full year revenue level posted by the company although net income dipped 5 percent to R15.1 billion, with core net income down 15 percent to R13.5 billion due to increased investments in its data network, which pushed up non-operating expenses and depreciation charges, along with the full year impact of the purchase of San Miguel Corp.’s telco assets.

For 2018, the telco allocated $850 million capital expenditure, consistent with last year’s figure, and expects the capex will be “on this level for the next two years”, announced President and CEO Ernest L. Cu.

The sustained level of capex is aligned with Globe’s vision to give the Philippines first world internet connectivity, said Cu.

Globe spent R42.5 billion in capital expenditures as of end-December of 2017 to support the growing subscriber base and its demand for data.

The bulk, about 82 percentof the amount, was for the data service needs of its customers.

To date, Globe has a total of 37,517 base stations, with over 24,700 for 4G3.

Overall, Globe showed a “strong 2017 performance, maintaining our momentum and posting positive full year revenue and EBITDA results,” he noted. “Our continued investments in our network’s data capacity and coverage, will allow us to continue to provide superior customer experience and improve the over-all connectivity in the country, while building a solid foundation to deliver sustainable long-term growth and shareholder value.”

Globe posted solid consolidated EBITDA, ending 2017 with R53.3 billion, up 7 percent from a year ago. Total operating expenses and subsidy grew in step with revenues, increasing by 6 percent year-on-year to R74.6 billion from R70.6 billion last year, as the telco continued to reinvest gains to support the growing subscriber base and the aggressive expansion of its data network. EBITDA margin was at 42 percent, higher than the previous year’s margin of 41 percent.

Its mobile revenues grew 7 percent year-onyear, at R98.5 billion in 2017, as more Filipinos embraced the digital lifestyle.

Globe Prepaid and TM, its mass-market brand, posted revenue growths of 11 percent and 8 percent, respectively, against the same period last year, while Globe Postpaid recorded a 1 percent increase yearon-year.

The telco’s mobile subscriber base reached 60.7 million as of endDecember 2017, down 3 percent from the 62.8 million subscribers reported a year ago.

The decline in the cumulative mobile subscriber base was due to the change in reporting of Globe’s prepaid subscribers beginning 2017.

On a product perspective, mobile data remains to be the biggest contributor to total mobile revenues, increasing contribution to 44 percent against 38 percent a year ago.

Mobile data service revenues reached R43.1 billion in 2017, 23 percent higher than the R35.0 billion reported a year ago.

Mobile data traffic grew 66 percent from 361 petabytes (PB) to 600 petabytes (PB) in the year just ended, given the increasing demand for Globe’s data-driven product portfolio.

On the other hand, mobile SMS revenues were flat and mobile voice declined by 5 percent year-on-year.

But on a normalized basis, mobile data revenues would have grown by 30 percent year-on-year while mobile SMS and voice would have declined by 7 percent and 4 percent respectively, as both products continue to be challenged due to the shift to internetbased applications, consistent with global trends.

The Globe home broadband business likewise sustained its growth