ABS-CBN Corp. is shuttering its mobile services brand next month, saying its business model was “financially unsustainable.”
In a statement, ABS-CBN Convergence, Inc. said all ABS-CBNmobile prepaid, postpaid, and SkyMobi subscribers can use text, call and data services until Nov. 30.
This comes after the company announced in July it is no longer renewing its contract with Globe Telecom, Inc. that allows ABS-CBNmobile to use the latter’s network.
ABS-CBNmobile is a mobile virtual network operator that the network giant launched in 2013 in partnership with Globe.
“After a thorough assessment, ABS-CBN Convergence deemed its current mobile business model to be financially unsustainable. As a result, ABS-CBN Convergence and Globe have reached an agreement not to renew their mobile network sharing contract,” the company said.
ABS-CBNmobile and SKYmobi promo offers will also no longer be offered to subscribers starting Oct. 25.
“As the mobile network sharing winds down, ABS-CBN and Globe Telecom continue to bank on their competencies and focus on new synergies to serve their customers better, such as the promotional bundling of ABS-CBN TVplus boxes with Globe At Home prepaid Wi-Fi and making ABS-CBN TVplus’ KBO (Kapamilya Box Office) and iWantv over-the- top services available to all Globe subscribers,” the company said.
Regina Capital Development Corp. managing director Luis A. Limlingan said the closure of ABS-CBNmobile “will probably free up cash which can be allocated to one with stronger cash flows.”
“I think most investors already saw it wasn’t lucrative for a while then so I think shutting it down might do them well so they can concentrate on more profitable business units,” he said in a mobile message.
In its first half financial report, ABS-CBN said its mobile business incurred P81 million in interconnection costs for the first half of 2018.
As of end-2016, ABS-CBN said its mobile unit had more than 930,000 subscribers.
ABS-CBN’s mobile business is part of its Digital and Interactive Media segment, which posted a net loss of P209 million in the first half of 2018, a 20% drop from P262 million in the same period last year.
In June, ABS-CBN also closed its remittance business in United States, Canada and United Kingdom due to losses that reached P16.18 million ($310,233). — Denise A. Valdez