Corporate News

Globe says first phase of network upgrade completed

Posted on April 08, 2013

AYALA-LED Globe Telecom, Inc. has completed the first phase of its multimillion-dollar network modernization program, the company said over the weekend.

A REPRESENTATIVE of Globe Telecom, Inc. briefs a visitor at a rural bankers conference in Manila in this Nov. 19, 2012 file photo on the company’s mobile micropayment service. -- JLC
“The first phase of the modernization is practically done. We have immediately moved to the next phase of optimizing our new equipment for maximum performance,” Emmanuel R. Estrada, Globe’s head for Network Strategy of Globe Network Technology Group, was quoted in the statement as saying. “This concludes the modernization of our access network.”

Globe defined access network as “the last mile or the final stretch radio frequencies must travel between a subscriber’s mobile phone and a service provider’s network.”

Globe said it was now working on the second phase of the network upgrade, which focuses on customer service.

“In parallel, we are aggressively transforming our transport and core network elements to yield the best possible customer experience,” Mr. Estrada said. “Like all systems, a network is only as strong as all its elements combined and working harmoniously.”

A transport network, Globe said, refers “to the facilities that relay signals from the cell sites of an access network.” Signals then move to the core network, where processing takes place for functions like subscriptions and billing, it added.

The company early last year embarked on a $790-million network modernization program.

The first phase, which cost around $700 million, involved replacement of its old network infrastructure. It was targeted to be completed in the first quarter of this year.

The second phase, which covers customer solutions, is targeted to be finished by yearend, Globe President Ernest L. Cu said in February.

The network upgrade comes amid heating competition in local telecommunications industry and increasing customer demand for data services.

In July last year, Globe’s rival Philippine Long Distance Telephone Co. (PLDT) said it had completed its two-year, P67.1-billion network upgrade program, doubling its network capacity.

Globe has programmed $450-million to $500-million capex for this year, lower by nearly a fifth from “around $600 million” last year. Around $160 million-$210 million of the capex has been allocated for “transformation initiatives” while $290 million will be spent on “business-as-usual investments,” which include “provision for fixed-line data investments and international cable facilities,” Globe had said in a disclosure in February.

Globe’s net income fell by 30.21% to P6.86 billion last year from P9.83 billion in 2011 on higher expenses for the upgrade and customer subsidies, according to the company’s consolidated statements of financial position.

Shares of Globe gained P9 or 0.72% to close at P1,260 apiece on Friday last week from 1,251 each last Thursday. -- C. H. C. Venzon