Globe Telecom. Inc.
Globe Telecom launches SD-WAN technology

GLOBE TELECOM, Inc. on Tuesday launched its Software-Defined Wide Area Network (SD-WAN), a cloud-based technology aimed at businesses with multiple locations.

The Ayala-led telco said in a statement that SD-WAN utilizes a plug-and-play device using cloud-based technology that can be easily installed and configured as long as there is fixed broadband connectivity.

Globe SD-WAN complements a company’s existing Wide Area Network (WAN) and Internet Protocol — Virtual Private Network (IP-VPN) connections. Companies can also apply automated rerouting of traffic across the most efficient routes and connections.

“This is best suited for companies that have multiple locations. It facilitates the way you provide and manage connectivity to different locations,” Albert M. de Larrazabal, Globe chief commercial officer, told reporters during the launch event.

With the new technology, Globe said banks can run real-time applications and transactions on multiple connections to their branches and ATMs that leverage on an intelligent system. If a link fails, applications on bank transactions and operations will continue to run using available bandwidth in the other connections.

Companies can also re-route to SD-WAN non-mission critical activities including video conferencing calls, and e-mails.

Globe Senior Vice-President for Enterprise Group Peter Maquera is optimistic on the appetite of clients for the technology.

“We’re expecting a pretty good take up because it’s a proven technology,” Mr. Maquera told reporters.     

Globe recorded P15.08 billion in net income last year, down 5% from 2016.

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...tuloy lang ang negosyo GLO, wag mo pansinin yan noise ng 3rd telco na yan Smile

Globe deploys nearly 1,700 LTE sites

GLOBE Telecom, Inc. on Sunday said it has deployed close to 1,700 long-term evolution (LTE) sites using the 700 megahertz (MHz) nationwide.

“Aggressive deployment of LTE 700 sites has led to improvement in the country’s mobile speeds,” the telecommunications giant said in a statement.

The 700 MHz frequency and 2600 MHz band were among San Miguel Corp.’s telecommunications assets which were jointly acquired by Globe and PLDT, Inc. in 2016.

Globe said it also rolled out close to 2,000 sites on the 2600 MHz and 1800 MHz bands, with majority of the company’s LTE 700, LTE 2600 and L1800 sites deployed mainly in Metro Manila, Metro Cebu and Metro Davao where a high number of customers are using LTE-capable devices. Users with LTE-capable devices experience better LTE connectivity.

Using the 2600 MHz, Globe also fired up around 170 massive multiple input multiple output (MIMO) sites. It said the massive MIMO technology enables a mobile network to multiply the capacity of a wireless connection without requiring more antennas.

“The technology thus increases wireless throughput, accommodating more users at higher data rates with better reliability while consuming less power,” Globe said, adding that massive MIMO is also the fundamental radio access technology for fifth generation (5G).

The company recently said it has deployed one million broadband lines, halfway through its goal of two million lines by 2020.

The telco’s net profit fell 5% to P15.08 billion in 2017 despite record revenues, given increased investments in data network.

It may keep its $850-million capital expenditure (capex) for the next two years.

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Globe Telecom gives big picture of local telco industry

We write to add context to a 2-part report that the Philippine Daily Inquirer published last January 29-30, entitled “Keeping a promise to end telco duopoly” and “Gov’t paves way for entry of 3rd telco player” written by Miguel Camus.  While the article endeavored to give readers a fair assessment of the local telco industry, we would like to provide more information and context about the business, capex and dividends.

An article published in January 2017 made reference to an academic research published last year by University of the Philippines (UP) Professor Emeritus Epictetus Patalinghug ( ) indicating that the telcos are earning below the average rate of returns compared to the top Philippine firms in other industries over a longer time horizon.  The study stated that “as telcos aggressively embark on increasing capital expenditures, they must be able to generate enough cash flow to sustain the needed investments in capital-intensive industries.  More significantly, high capital-intensive industries evidently require high margins to be viable.”

The study sheds light to what the PDI article referred to as “immense profits” being generated by existing telco operators supposedly since the turn of the century with EBITDA margins of around 40%. In the case of Globe, the sustained profitability is necessary to fund high capital spending, averaging about 31% annually of gross service revenues – the highest in Asia next only to Chinese telco operators amid growing customer demand for bandwidth-intensive content and rapid shifts in technology. Adoption of latest technologies enables a telco operator like Globe to keep the industry at par with the rest of the world to support vital industries like BPOs and other sectors with large connectivity requirements that provide jobs to many Filipinos, create connected cities in rural areas especially public schools, initiate financial inclusion through mobile money, e-payment and e-commerce, and provide livelihood down to the barangay and sari-sari store level.

All over the world, telco operators are likely to keep their capital spending at high levels, given the need to build more connectivity, step up deployment of fiber optic cables, and prepare for the next wave of digitalization including 5G, artificial intelligence, and the Internet of Things (IoT).

We would also like to point out that before achieving profitability in more recent years, local telco operators faced a lot of challenges following the deregulation of the industry in the 1990s. Readers may not recall, but many telco operators who participated in the government’s then service area scheme suffered losses, ultimately forcing some players to go into financial rehabilitation due to the required fixed line rollout commitments in underdeveloped regions of the country; the Asian financial crisis that led to the surge in interest rates and the steep depreciation of the peso vis-à-vis the dollar which caused telco operators to be mired in massive debts with high interest; and the widespread cloning of IDD mobile calls and spurious postpaid line subscriptions that caused high levels of bad debts. These factors, later combined with the introduction of lower-yielding unlimited on-net services, contributed to the consolidation of mobile and landline operators in the sector.  Although today, there are still smaller telco players in the provinces who rely mostly on inbound international calls for their revenues. However, capex requirements, rapid technology changes, and the need to cope with market demands have kept these small telco players from expanding their services to other areas. On a related note, we would also like to clarify that the total capex of Globe from 2001-2016 reached Php357.6 billion, not Php377.6 billion as the article stated.

In relation to the article mention of our dividend policy, Globe returns to its shareholders dividends equivalent to 75%-90% of its prior year’s core net income.  Such policy was adopted as the company embarked on its network modernization program in 2011 where a substantial amount involving the legacy network was subject to accelerated depreciation.  Also, it is important to note that from 2007 to 2009, Globe declared special cash dividends per share of Php50 to common shareholders, as part of its efforts to optimize its capital structure. Prior to the payout of the special cash dividends, the company’s gross debt to equity ratio was only at 0.69:1 while its net debt to equity ratio was at 0.43:1 as of December 31, 2006. Had Globe not paid out the special cash dividends, the total amount paid out from 2000 to 2016 would have only been about Php115 billion or 15% lower. As a publicly listed company, we believe that a sustainable organization should not only operate with sound financial performance bu should equally provide adequate shareholder returns as well.

Moreover, we would like to point out that Globe major shareholders Singtel and Ayala Corporation, remained committed to the company despite the many business risks and losses it suffered from 1992 to 1997 when it launched its mobile and landline businesses during the liberalization of the telco sector.

We hope this helps provide your readers with a broader perspective of the telco industry in the country.

Truly yours,

Yoly C. Crisanto

Senior Vice President
Corporate Communications
Globe Telecom

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PLDT, Globe neck and neck in LTE game

PLDT Inc.’s Smart Communications maintained its edge in 4G internet speed while main rival Globe Telecom was ahead in availability, the latest crowdsourced survey by OpenSignal showed.

The report highlighted fourth-generation mobile services or LTE, an area where both PLDT and Globe had been pouring massive resources. Both jointly acquired San Miguel Corp.’s (SMC) telco assets in 2016—largely a play to gain access to most of SMC’s 4G frequencies.

According to the report, Smart outpaced Globe in LTE speed during the period from Nov. 2017 through Jan. 31, 2018.

Smart measured 12.48 megabits per second in 4G download speed while Globe saw 7.69 Mbps. But in terms of availability, Globe measured 67.46 percent, ahead of Smart’s 59.68 percent.

OpenSignal said these results were mainly mirrored across the country.

Yet, OpenSignal said the Philippines “offered significantly worse LTE speeds and availability than most other countries in the world.”

It said a new operator could “put pressure” on PLDT and Globe. It noted, however, that it would take several years for a new telco challenger to roll out 4G services in the country.

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Globe open to sharing cell towers with PLDT

MANILA, Philippines — Globe Telecom Inc. is open to working with rival PLDT Inc. for the proposed independent company that build cellular towers in the country.

In a briefing Monday, Globe president and chief executive officer Ernest Cu said the Ayala-led telco has always been open to working with PLDT on sharing towers.

“We’ve always been open to sharing. We are not into that, exclusivity. We like the open market. We think it benefits both of us. Costs will be lower,” Cu said.

Globe chief financial officer Rizza Maniego-Eala said in the same event, the telco has been trying to convince PLDT to form a tower sharing venture to save on capex.

Earlier, Globe announced it is in talks with independent third parties to establish a tower company for faster deployment of cellular towers in the country.

It is looking to divest all or part of its tower assets to independent tower companies as part of its network expansion and optimization plan.

Eala said Globe has appointed UBS as financial adviser for the project’s preparatory phase.

“At the moment, we are analyzing our options from structure and the process,” Eala said.

While there are no specifics yet, she said the telco has obtained approval from the board to divest all or apportion a bit of its towers.

At present, Globe has 8,000 cell towers.

Following the appointment of UBS, Globe said the telco would release either a request for information or request for proposal to start the bid process.
“But again, that would depend on different structures and whatever option we will choose. So, we are looking for maybe something towards the end of the year, completing a transaction, pending any regulatory requirements,” she said.

As of the first quarter, Globe’s net income reached P4.7 billion, up 24 percent from P3.8 billion in the same period last year.

Globe attributed the increase mainly to earnings before interest, taxes, depreciation and amortization offsetting depreciation charges and non-operating expenses for the period.

Consolidated service revenue reached P33.2 billion in the first quarter, seven percent higher than the P31.1 billion a year ago amid strong demand for data-related products.

In terms of capital expenditures, Globe has spent P6.6 billion to support the growing subscriber base and its demand for data.

Globe had 63.3 million mobile subscribers as of end-March, an eight percent increase from the 58.6 million subscribers in the same period last year.

It also had 1.40 million home broadband subscribers from January to March, 17 percent higher than the 1.19 million subscribers a year ago.

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Globe steps up LTE deployment

Globe Telecom increased its LTE footprint by about 10 percent in the first quarter of 2018 given continued high demand for high-speed mobile internet services.

The telco giant said in a statement that it had deployed an additional 934 LTE sites during the period, bringing the total figure to 11,300 sites. The new locations included far-flung areas like Jolo, Tawi-Tawi and Batanes.

The company also highlighted how the initiative was aimed at “making full use of the spectrum assets currently assigned to Globe.”

The Department of Information and Communications Technology (DICT), which is in the midst of finalizing rules to select a new major telco player, announced a plan to pursue a spectrum management policy within the year.

Telco players are capitalizing on LTE or 4G services, which allow subscribers access to data-heavy services like mobile video. Two years ago, Globe and rival PLDT Inc. joined forces to acquire San Miguel Corp.’s telco assets, a deal that gave both access to SMC’s LTE frequencies.

Globe has been aggressive in this area. Its mobile revenue in the first quarter of 2018 hit P25.5 billion. This accounted for the lion’s share of its service revenue of P33.2 billion, which went up 6.7 percent year-on-year. Globe added that mobile data revenue alone hit P12.3 billion.

The company announced that it would set aside about $850 million in capital spending for 2018, most of which would be used to bolster data services.

In a statement, Globe said it had also launched some 200 so-called massive MIMO sites.

Massive MIMO technology enables a mobile network to multiply the capacity of a wireless connection without requiring more antennas. Massive MIMO is also the fundamental radio access technology for 5G.

“The 5G network targets to have higher speeds, lower latency and better capacity, enabling higher density of mobile broadband users and supports device-to-device connectivity and massive machine communications,” Globe noted in its statement.

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Globe to hike capex, to divulge figure by Q3
OWING to constant increases in data usage in the Philippines, Globe Telecom Inc. may hike its $850-million capital requirements for 2018 to further expand its network’s coverage and capacity, its president said last Friday.

In a chance interview, Globe President Ernest L. Cu said his group has seen remarkable growth in data usage every quarter. This is expected to further accelerate as more and more Filipinos adapt to the digital lifestyle.

“Our data usage grows 20 percent every quarter, and we’re expecting it to grow even further. We announced a spending of $850 million, but we will likely to go beyond that this year because the data growth is really beyond expectation,” he said.

Cu did not elaborate, but added that  the company may announce the new 2018 budget by the third quarter of the year after further evaluation.

During the first quarter of 2018 alone, the company saw mobile data traffic reaching 180 petabytes from 131 petabytes the year prior, which translates to a 37-percent surge.

One petabyte is equal to about 3.4 years of 24/7 full high-definition video recording.

The company is currently on track to fulfilling its commitment to deploy LTE services nationwide by the end of 2018, using the 700 megahertz  and 2600 MHz frequencies, soft assets that it earned from co-acquiring the telco business of San Miguel Corp. two years ago with rival PLDT Inc.

“Data growth is happening because people are buying data packets and people want to have good data packs,” Cu added.

Mobile data is the driver to Globe’s top line, which reached P33.6 billion in the first quarter, or about 6 percent higher than the P31.1 billion it recorded last year.

For the first three months of the year, mobile data already emerged as the top contributor to the P25.5-billion total mobile revenues of Globe, accounting for 48 percent—surpassing voice and text.

The trend is expected to continue as smartphone penetration in the country is projected to grow to 70 percent in 2018, from only 40 percent in 2015.

Just recently Globe, together with The Walt Disney Co. in Southeast Asia, introduced DisneyLife app, an avenue that will elevate its data-usage business.

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Globe urges gov’t to help expedite installation of cell sites

MANILA -- The Philippines would be able to achieve broadband Internet speed of at least 50 megabits per second (Mbps) for the next three years if the government wcan come up with policies that expedite the installation of cell sites across the country according to major telco firm Globe Telecom.

This, as Globe is eyeing to provide fiber broadband Internet with speed of at least 50 Mbps by 2020 should it be able to quickly deploy communication facilities.

“From Globe perspective, we really intend to provide two million homes with at least 50 Mbps by 2020, versus today where majority of homes have 2 to 5 to 10 Mbps,” Globe Chief Technology and Information Officer (CTIO) Gil Genio said during the recent Fiber-To-The-Home (FTTH) Council Asia-Pacific Conference held in Taguig City

“What we want to do and achieve is that by 2020, anyone who wants a home broadband connection should have at least 50 Mbps connection but the telco environment is not completely rosy,” he added.

Globe said bureaucratic red tape is causing delays in the issuance of permits from various local government units on the construction of telco infrastructure.

The firm likewise is having difficulties in securing permits in establishing right-of-way in subdivisions relating to the deployment of broadband fiber optic cables.

“Today, we have to go to each and every developer and convince them about the benefits of fiber. In rolling out fiber to homes, we need to work with electricity distribution utilities, homeowner associations, and others to be able to serve people with fiber faster and more efficiently,” according to Genio.

Homeowner associations of at least 25 exclusive villages in Metro Manila had barred Globe from constructing cell sites within their vicinity, preventing the telco from improving mobile and Internet coverage in those areas.

The lack of clarity on the proposed National Broadband Plan and Open Access Law, unfavorable geography, and bureaucratic red tape are some of the challenges in deploying telecommunication and broadband infrastructure.

Implementing an open access model will open the telco industry to local and foreign investors which will allow sharing of infrastructures resulting in the improvement of communication services.

“This is very important as we roll out more fiber. I believe the single biggest positive thing the country can do is to overcome obstacles in permitting and right of way so that we can build even more,” Genio said.

Globe has proposed the establishment of an independent tower company that will expedite the installation and deployment of cellular towers to further improve services while cutting costs substantially.

The towers to be erected would be open for lease to new and existing players in line with the government’s initiative to open the local telco industry to more competition. Globe's management reasoned that an independent tower company would help reduce the time needed for a new telco player to rollout given the 25 permits and up to eight months required to build one cell tower.

This proposal, however, was quickly rejected by Globe's main competitor.

For its part, the Department of Information and Communications Technology (DICT) is set to sign an agreement with the National Grid Corporation of the Philippines (NGCP) and the Transmission Corporation (Transco) on the utilization of NGCP’s fiber optic cables for the implementation of the National Broadband Program (NBP) on Friday.

The NBP aims to improve the speed and accessibility of Internet services through accelerating the deployment of fiber optics and wireless technologies across the country particularly in areas that are not easily accessed by networks of existing telco players.
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Globe Telecom brings 5G technology to the Philippines
1st 5G Globe At Home service roll out in Q2 2019

MANILA, Philippines, June 7, 2018 /PRNewswire/ -- Globe Telecom Inc., the Philippines' leading telecommunications company, formally announced its fifth-generation (5G) wireless technology adoption, with its first 5G network service slated for commercial rollout by the second quarter of 2019.

The 5G network will boast of higher speeds, lower latency, and better capacity. This will enable Globe to deploy fixed wireless broadband at a fiber speed.

Globe President and CEO Ernest Cu said the 5G technology would enable Globe to use Air Fiber technology in relation to deployment of fixed wireless broadband that would benefit individual customers at home and business clients alike. "Air Fiber internet, which makes use of fixed location wireless radios instead of fiber, could provide speeds ranging from 50 Mbps to 100 Mbps," Cu added.

Globe brings 5G technology to the Philippines. Globe President and CEO Ernest Cu (middle), together with Globe Chief Technology and Information Officer Gil Genio (right) and Huawei Southern Pacific Region Chief Strategy and Marketing Officer Lim Chee Siong (left), leads the launch of 5G. (PRNewsfoto/Globe Telecom, Inc.)
Globe brings 5G technology to the Philippines. Globe President and CEO Ernest Cu (middle), together with Globe Chief Technology and Information Officer Gil Genio (right) and Huawei Southern Pacific Region Chief Strategy and Marketing Officer Lim Chee Siong (left), leads the launch of 5G. (PRNewsfoto/Globe Telecom, Inc.)
Globe will start rolling out 5G services commercially in the Philippines mid-2019, making it one of the first carriers to do so. 

"We have been preparing our network for sometime now with our existing vendor partners, including Huawei Technologies. We are happy to bring the Philippines in line with other countries who are early adopters of 5G. Once again, we stay true to our commitment to bring first world internet in the country," Cu said.

The technology will also enable Globe to go over the circuitous approval process of deploying a fiber optic cable in the Philippines, which usually involves multiple permits from local government units (LGUs). The right of process can sometimes take years to obtain delaying fiber optic roll-out completion. "We can bring internet to more homes by deploying 5G compared to a typical fiber optic roll-out," Cu said.

The 5G technology is expected to accelerate the adoption of Internet of Things (IoT) in the Philippines. Globe earlier announced that it is enabling its network by utilizing its spectrum assets, particularly the widely-contested 700-megahertz band.

Globe is currently piloting Narrow Band- Internet of Things (NB-IoT) technology in the country, while enhancing its mobile data services. Due to the telco's inherent advantage of long reach, this spectrum is ideal to support NB-IoT services. Globe and China's Huawei are collaborating in this journey, ensuring network readiness to support these services.

The Globe network has one of the largest deployment of Massive MIMO (MM) in Asia, as part of its strategic technology roadmap since 2016. MM is the fundamental radio access technology for 5G.

Globe has been spending over 31% of its annual total revenues to upgrade and expand its telecommunication and IT infrastructure. It has been ramping up its capital spend from P21.1 billion in 2012 to P36.7 billion in 2016 and P42.5 billion in 2017, in order to provide its subscribers of better broadband services. This year, Globe recently disclosed that it will further accelerate its capital expenditures to over P43.5 billion.

Back in November 2015, Globe extended its partnership with Huawei, signing a five-year contract involving the planning and design of a wireless broadband network, as well as the creation of a wireless innovation center. Huawei was also the technology partner of Globe when it implemented a $700-million network modernization program that began in 2011.

About Globe Telecom
Globe Telecom is a leading full service telecommunications company in the Philippines, serving the needs of consumers and businesses across an entire suite of products and services including mobile, fixed, broadband, data connections, internet and managed services. Its principals are Ayala Corporation and Singtel who are acknowledged industry leaders in the country and in the region. 

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Globe forming new cell tower company

GLOBE Telecom Inc. said it is establishing a new company to operate its tower assets.

The telecommunications company said in a statement that it has begun the process of incorporating a separate tower holding company. After it obtains approval from the Securities and Exchange Commission (SEC), the company will begin divesting all or some of its tower assets.

In February, Globe said it was in talks with certain parties to form an independent tower company to help speed up the building and deployment of cellular towers.

“As a major industry player we understand what this country needs to improve the internet experience of our customers. Putting up more towers based on global standards within strategic areas will make spectrum use more efficient. We should work together and find all means to supplement the build for towers — either through telcos or tower companies. This in turn will bring us closer to first world internet connectivity,” Globe President and CEO Ernest L. Cu said in a statement.

Mr. Cu added that the company remains open to working with new and existing telecom companies in the interest of national development.

Globe has said that it was open to working with rival PLDT, Inc. on the initiative. PLDT has said that the company does not see a need to share any of its network assets.

The government on Thursday released its initial common tower policy and pole guidelines, and hopes to accredit up to two independent tower companies by the first quarter of next year, followed by a six-month building period. Globe and PLDT will also be consulted regarding their target locations for placement of the towers and poles, to be shared by telcos including the upcoming “third player.”

Each accredited company can build a total of 25,000 towers over seven years. The Philippines has only 16,000 cell sites for a population of around 100 million. Presidential Adviser for Economic Affairs and Information Technology Communications Ramon P. Jacinto has said that the country will need about 50,000 towers for better coverage.

The initial policy allows telcos to build their own cell sites if they do not get a response from the tower company or companies after 30 days. This is a change from a previous plan of the government to prohibit telcos from building their own cell sites once the policy is implemented. Mr. Jacinto said consultation revealed opposition from PLDT and Globe, who wanted to retain the right to build their own cell sites.

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