GLOBE TELECOM, Inc. may raise its capital expenditure budget for this year, as it continues to ramp up investments in data infrastructure.
“Our capex for the year is between $750 (million) and $800 (million) right now. We will formalize our capex number in the third quarter earnings… We were tracking already in the $500 (million)-plus range, around $575 (million), or in the mid-$500s already for the first six months of the year, so there’s the possibility of raising the capex number forecast for the rest of the year,” Globe President and CEO Ernest L. Cu told reporters during the launch of the Southeast Asia-United States (SEA-US) submarine cable system last Friday.
Earlier this year, the Ayala-led telecommunications firm said it was allocating about $750 million in capex for 2017. The bulk of the capex will be invested in data-related projects, modernization of fixed line data infrastructure, and requirements for transmission facilities and for the deployment of more Long-Term Evolution (LTE) services.
Asked whether the company will need to raise additional funds for capex, Mr. Cu said: “We don’t know yet, that’s all being studied and we’ll make the announcement.”
“Everything we do in the network is geared towards data. That’s the growing part. As you know, SMS is declining, voice is declining,” he said.
Globe is planning to build more data centers this year, including one in the former BayanTel headquarters building in Quezon City.
“We think data centers should be smaller than what they are today, because of virtualization and cloudification of IT (information technology)… Globe’s view is that today, the world is all about the cloud, about virtualization,” the Globe official said.
Globe will also continued to shift its focus on the Home business, as it noticed more people are moving to streaming.
“In the second quarter we had 54% of market share in Home… We made the conscious decision that it was time to shift some of our focus on the Home… People are moving to streaming. Globe fortified its portfolio of over-the-top content (OTT) streaming partners… We’ll be announcing two more big partners before the end of the year,” Mr. Cu said.
For the first six months of 2017, Globe’s net income slipped 10% to P8.08 billion versus P8.97 billion a year ago, because of “higher interest expense and depreciation expenses, coupled with Globe’s share in equity losses and spectrum amortization related to the SMC (San Miguel Corp.) telco asset acquisition.”
Service revenues reached a new record of P62.9 billion for the first half, 5% higher than the previous year, driven by “strong contribution of data-related products and services.” — Patrizia Paola C. Marcelo
