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Globe Telecom, Inc. delivered its best quarter performance yet with consolidated service revenues hitting an all-time best of nearly P17.0 billion in the third quarter, 3% higher than previous quarter’s record of P16.6 billion. The mobile business sustained its growth momentum, while the broadband business continued to expand at a double-digit rate, with revenues rising 35% compared to last year, in step with the growth of its wired and wireless subscriber base. The Company thus closed the nine months of the year with consolidated service revenues of P50.0 billion, up 9% from P45.8 billion in the same period last year. This quarter’s performance also bucked a traditionally low season with consolidated service revenues growing by 3% against last quarter and 13% over the same period last year. The mobile business, which contributes close to 80% of consolidated revenues, delivered strong results, anchored on the continued growth of domestic core services such as voice and SMS, coupled with the rapid rise in mobile browsing usage. Strong take-up for the Company’s customizable postpaid plans, innovative all-network offers, and unlimited voice and SMS promos offering superior value were the key contributors to this period’s growth. Mobile revenues rose to P39.7 billion as of end-September, up 7% from last year’s P37.0 billion.


Globe Postpaid set a record high of over 116,000 additional subscribers in the third quarter, while Globe Prepaid and TM contributed over 341,000 and 226,000 respectively to bring Globe’s cumulative subscriber base to 29.1 million at the end of September, 15% better than last year’s 25.4 million and last quarter’s 28.4 million.


The broadband and fixed line business also posted strong revenue growth as of end-September, improving 16% year-on-year from P8.8 billion to P10.3 billion. Sustained demand for internet services coupled with the entry of more affordable access devices enabled the Company to grow its retail broadband business, while the steady demand from the outsourcing and offshoring industry also boosted revenues for the fixed line data business.


Broadband subscribers increased to 1.4 million, 35% and 5% above last year and last quarter, respectively. Subscriber growth was fueled by Tattoo Broadband On-the-Go, the Company’s nomadic broadband services. This brought broadband revenues to P5.6 billion as of end- September, 35% above last year’s P4.1 billion.


Consolidated EBITDA stood at P27.0 billion at the end of September and was 9% higher than last year’s P24.8 billion. Operating expenses and subsidy increased 9% year-on-year from P21.0 billion to P23.0 billion due mainly to higher marketing and subsidy costs related to the Company’s acquisition, retention, and brand-building programs. Network-related expenses also rose to support an expanded mobile and broadband network. Revenue growth cushioned the impact of higher operating costs, resulting in consolidated EBITDA margin of 54% steady against last year.


Consolidated net income after tax rose 7% from P7.4 billion last year to nearly P8.0 billion as of September. Revenue growth compensated for the overall rise in operating and depreciation charges as well as non-operating expenses. Excluding foreign exchange and mark-to-market gains and losses, core net income increased by 15% from last year’s P7.1 billion to P8.2 billion this period.


On a sequential basis, consolidated EBITDA was steady against second quarter’s level of about P9.0 billion. The 3% growth in consolidated service revenues offset the 5% rise in operating expenses and subsidy. Net income after tax was at around P2.5 billion, with the quarter-on-quarter increase in depreciation expense offsetting the improvement in non-operating charges.

“We are pleased to have sustained our momentum and extended our gains into this third quarter, despite a very challenging competitive environment,” Ernest L. Cu, President and CEO of Globe Telecom, Inc. said. “Our mobile business has reversed the declines of last year, while our broadband business continues to deliver improved profitability with its growing scale. We have made good progress against the priorities we laid out in the beginning of the year. Our priority in the coming year is to execute well on our network and IT transformation programs to put us in a better competitive position and bring the business to higher growth,” said Mr. Cu.

During the period, the Company boosted its all-network offers, improved its mobile data services, launched the first unlimited IDD call service, and upgraded its browsing speeds for Tattoo At- Home and Tattoo On-The-Go product offerings.

In the campaign to deliver the best in all-network offers, Globe Prepaid improved its SuperAllTxt and SuperUnliAllTxt25 services. On top of the 250 all-network text offer, subscribers who register to SuperAllTxt are now able to make 10-minutes of local calls to any Globe or TM subscriber. SuperUnliAllTxt users could now enjoy 1 hour of mobile browsing and 10 minutes of talk time to Globe or TM contacts with their unlimited all-network texts. TM on the other hand launched its own breakthrough service UnliTxtAll20 which allows TM subscribers to send unlimited SMS to all subscribers from any network for only P20 a day.

As a service to the growing number of mobile browsing users, Globe launched m.globe, an all-in- one mobile portal that allows users to enjoy the best of the mobile web in a single platform without the need for an expensive and sophisticated internet-capable phone. Through m.globe, subscribers are able to access load information such as load balances for prepaid customers and unbilled charges for postpaid subscribers, get the latest updates from Facebook and Twitter, send and receive e-mails via their web mail accounts using the e-mail feature, and pull content from various online information sites through its news and entertainment function. Aside from providing access to real-time updates, the m.globe portal also has a complete list of Globe promos that makes it easier for subscribers to register to the services without having to memorize the various keywords and prefixes.

To further open up its mobile data services to a wider market, Globe introduced Postpaid Power Surf in the third period with its You’re On campaign. Unlike the prepaid offering which is time- based, Postpaid Power Surf provides bulk MB of mobile data, consumable per KB that is valid for 30 days. Subscription to the service comes in three denominations: P99 for a 50 MB allocation, P299 for 300 MB, and P499 for 1 GB allocation. Prepaid Power Surf, which enables mobile browsing for as low as P15 for 1 hour, is also now available to TM subscribers.

Globe also enhanced its line-up of gadgets by offering two of the most highly-anticipated tablet devices in the country, the iPad 2 with WiFi + 3G and the BlackBerry® Playbook Tablet™. The iPad 2 is the second generation of Apple™’s revolutionary device which features an entirely new design that is thinner, lighter and faster than the original iPad. The BlackBerry® Playbook Tablet™ on the other hand carries built-in WiFi connectivity, features an ultra-portable design, and delivers industry-leading performance.


During the same period, Globe launched the first-ever unlimited international call service with the All-New SuperIDD Unlimited International. A single day subscription costs only P149 which entitles Globe Postpaid and Globe Prepaid subscribers to make unlimited calls to 3 unique numbers in more than 50 international destinations, any time of the day. Alternatively, subscribers may also subscribe to the promo for 1 month for just P1,999 and call as much as 10 unique numbers overseas with the same unlimited service, 24/7.

Globe Tattoo also recently upgraded its service offerings with the New Tattoo 4G Postpaid which now comes at faster speeds and better and sleek sticks for the same affordable price. Supported by the continued rollout of its 4G network via HSPA+, Globe now offers Plan999 at an increased speed of 5 mbps, up from its original 3 mbps. Browsing speeds for Plan1299 and Plan2199 are also upgraded from 5 mbps to 7 mbps and from 10 mbps to 12 mbps, respectively. For the on- the-go Tattoo Prepaid service, the mobile broadband kit is now made more affordable at only P995 and comes with a 7-day, all-day, surf-all-you-want access to four most frequented websites such as Yahoo! Mail, Facebook, Twitter, and YouTube for every purchase of the prepaid broadband kit.


Globe also marked another milestone in the third quarter when it launched the newest customizable plans from Globe Tattoo At-Home. Subscribers now have the option of getting a speed boost of up to 1 mbps at a time that best suit their needs. The add-on speed service comes in three denominations: P250 per month for extra speed during the day (10 am – 2 pm), P200 per month for additional speed at night (10 pm – 2 am), and P150 per month for speed boost from 2 am to 6 am. Aside from adding speed, subscribers who choose the data plus landline service can also customize their plans with landline voice add-ons. Subscribers can choose from useful features such as call forwarding, call waiting, 3-way calling or caller ID which are available for an additional charge of as low as P55 per month.

To complement the country’s first fully functional cloud computing service, Infrastructure as a Service (IaaS), Globe expanded its offering to include Machine-to-Machine (M2M) services for fixed asset management that allow clients to closely track fixed asset location and better manage their operations. In addition, Globe completed its core data network upgrade to ROADM (or Reconfigurable Optical Add-Drop Multiplexer) to support increasing bandwidth demand, thereby making Globe the first carrier in the country to deploy ROADM as well as 40G optical links over its Broadband Access Service Network (BAX).

The third quarter also saw the launch of new mobile phones and tablet devices, with some made exclusive to Globe. This includes CloudFone Ice, the most affordable Android phone in the market today, and the Apple™ iPad 2. The Company continues to enjoy exclusivity on Apple devices, owing to the quality and size of its postpaid subscriber base.


Finally, to further refresh the Globe Prepaid brand, the Company recently launched a campaign that aims to support the Filipino youth as they chase their dreams and live in the moment. Globe Prepaid‘s “Go lang nang Go” campaign empowers the young to embrace freedom and seize the day to do things that bring them joy. The campaign encourages them to make their “Today I Will” statements aided by the brand’s suite of products and services. A key focus of the drive is protecting one’s self, best exemplified by Globe’s “LoadWatch” feature that provides timely and automated updates to subscribers on their promo balances. With the regular updates, subscribers are able to keep track of their usage without having to worry about losing or forfeiting load credits.




Globe Group

Quarter on Quarter                       Year on Year

Results of Operations (Php Mn)                3Q                      2Q               QoQ            30 Sep                      30 Sep         YoY

                                                                                                                                         Change                                                              Change

                                                                                         2011                     2011                              2011                            2010

(%)                                        (%)

Service Revenues¼¼¼¼¼¼¼…….          16,981         16,554             3%        49,987                      45,815           9%

Mobile¼¼¼¼… ¼¼¼¼¼¼..           13,491         13,138             3%        39,689                         36,971           7%

Broadband¼¼¼¼¼¼¼¼……..          1,908          1,861                3%         5,557                           4,104          35%

Fixed Line Data¼¼¼¼¼¼¼…            971              906                 7%         2,827                              2,598           9%

Fixed Line Voice¼¼¼¼¼¼¼.            611              649                 -6%          1914                              2,142         -11%

Operating Expenses and Subsidy¼¼.       7,997          7,602            5%        22,960                        21,026           9%

EBITDA ¼¼¼¼¼¼¼¼¼¼¼¼.                8,984          8,952                           27,027                        24,789           9%

EBITDA Margin¼¼¼¼¼¼¼¼¼             53%              54%                                54%                                 54%

EBIT ¼¼¼¼¼¼¼¼¼¼¼¼¼..                4,170            4,340           -4%        13,254                         11,539          15%

Net Income After Tax (NIAT)¼¼¼..       2,495          2,508           -1%          7,994                          7,448           7%

Core Net Income¼.¼¼¼¼¼¼¼           2,602          2,613                        8,176                              7,131         15%


•    Consolidated service revenues as of end-September surpassed last year’s level by 9% from

P45.8 billion to almost P50.0 billion. The mobile business sustained its growth momentum by delivering a 7% revenue increase year-on-year despite intense competition, peaking penetration levels, and aggressive pricing and value offers. The fixed line and broadband business also posted 16% revenue growth against last year fueled still by the rising demand for internet connectivity.


•    On a sequential basis, the Company registered its best quarter performance yet with

consolidated service revenues posting an all-time high of nearly P17.0 billion in the third quarter, 3% better than prior quarter’s record high of P16.6 billion, and going against what is traditionally a lean season. The mobile business continued to pick up, underpinned by the success of the innovative service offerings as well as better subscriber acquisition. Consolidated revenue growth was also supported by the sustained expansion of the broadband business particularly by Tattoo On-The-Go offerings.


•    Operating expenses and subsidy rose 9% as of end-September from P21.0 billion last year to

about P23.0 billion. The year-on-year growth in expenses was mainly due to higher marketing and subsidy, provisions, utilities and staff costs. Growth in network-related expenses such as electricity, fuel, contracted services, and maintenance were driven largely by an expanded 2G, 3G and broadband networks. Marketing and subsidy expenses, on the other hand, were 19% higher year-on-year as a result of the aggressive acquisition campaigns, investments in brand-building, higher handset subsidies, and to support the product and service launches in the mobile business. This brought the ratio of marketing and subsidy to service revenues to 9% this period, up against last year’s level of 8%. Compared to last quarter, operating expenses and subsidy also increased by 5% mainly on higher marketing and subsidy expenses.


•    Consolidated EBITDA rose 9% as of end-September to P27.0 billion from P24.8 billion a

year ago with revenue growth outpacing the overall rise in costs and expenses. This brought consolidated EBITDA margin to the same level as last year of 54% of service revenues. Higher EBITDA also helped offset the 4% increase in depreciation charges brought about by


the sustained investments in the broadband and mobile networks. This resulted to a 15% increase in EBIT from P11.5 billion last year to P13.3 billion this period. Compared to the second quarter, however, the 3% increase in consolidated service revenues was offset by the 5% rise in operating expenses and subsidy. As a result, consolidated EBITDA was steady against second quarter’s level, while EBITDA margin dropped by a percentage point from 54% to 53% in the third quarter.


•    Consolidated net income after tax closed at nearly P8.0 billion as of end-September, 7%

higher than last year’s level of P7.4 billion. Excluding foreign exchange and mark-to-market gains and losses as well as non-recurring items, core net income after tax stood close to P8.2 billion, 15% over last year’s P7.1 billion. On a sequential basis, net income in the third quarter declined by 1% as the topline growth was weighed down by the increase in marketing and depreciation charges.


•    Total capital expenditures at the end of the first three quarters reached nearly P13.9 billion,

driven by the continued investments in the Company’s broadband and mobile networks, and were lower than last year’s spending of about P15.8 billion. The Company has allotted a significant portion of this year’s US$500Mn projected capex spend towards the expansion and upgrading of the Company’s mobile networks specifically on deploying 4G mobile technology and utilizing the global standard HSPA+ in key areas in nationwide. As of end- September, Globe has a total of 12,062 base stations and 6,580 cell sites to support its 2G, 3G and WiMAX services.





                                                                                         Quarter on Quarter                      Year on Year

                                                                                                      3Q           2Q            QoQ         30 Sep        30 Sep*         YoY

Mobile Net Service Revenues (Php Mn)

                                                                                                                                         Change                                                 Change

                                                                                                       2011         2011                          2011          2010

                                                                                                                                                   (%)                                                      (%)


Data¼¼..¼¼¼¼¼¼¼¼¼¼¼¼.                        7,013       6,860             2%        20,821         18,802          11% Voice¼¼¼.¼¼¼¼¼¼¼¼¼¼¼                        6,478       6,278             3%        18,868         18,169           4%

Mobile Net Service Revenues..¼..¼¼¼.        13,491      13,138            3%        39,689         36,971      7%


* 2010 revenue split between mobile voice and data has been restated for better comparability.



Mobile data revenues rose in the third quarter to P7.0 billion compared to the previous period’s P6.9 billion with the continued growth in unlimited SMS revenues and the growing popularity of mobile browsing services. Mobile data accounted for 52% of total mobile service revenues and grew by 11% from P18.8 billion last year to P20.8 billion at the end of the first nine months of this year following the success of the Company’s bucket and unlimited offers and affordable data plans.


Mobile voice revenues, which comprised 48% of total mobiles service revenues, increased by 4% from P18.2 billion a year ago to P18.9 billion this period. Unlimited and bulk voice subscriptions drove the year-on-year increase in revenues, but growth was partly weighed down by the decline in IDD and roaming services. Compared to last quarter, growth trend was sustained by unlimited voice and VOIP subscriptions.



Quarter on Quarter                              Year on Year

                                                                                                     3Q                    2Q                     QoQ             30 Sep            30 Sep           YoY

                                                                                                                                                      Change                                                                 Change

                                                                                                      2011               2011                                          2011               2010

(%)                                                (%)

Cumulative Subscribers (or SIMs) – Net      29,118,087     28,433,836    2%      29,118,087     25,403,002         15%

Globe Postpaid…¼¼¼¼¼¼¼¼¼¼¼.       1,368,417      1,251,832           9%       1,368,417             982,878                  39%


Prepaid .¼¼¼¼¼¼¼¼¼¼¼¼¼¼            27,749,670     27,182,004           2%      27,749,670     24,420,124         14%

Globe Prepaid..¼¼¼¼¼¼¼¼¼¼¼           15,055,022     14,713,906           2%      15,055,022     13,351,243                13% TM..¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼¼           12,694,648     12,468,098           2%      12,694,648     11,068,881                 15%


The Company’s total mobile subscriber base exceeded 29.1 million at the end of the first three quarters, 15% and 2% higher than last year and last quarter, respectively.


Subscriber acquisitions continued to outpace last year by 5% from 16.2 million to about 17.1 million this period following aggressive campaigns from all brands. With churn rate improving from about 6.4% last year to 5.8% this period, net subscriber additions as of end-September increased by 23% to over 2.6 million from about 2.2 million last year. With peaking penetration levels, heightened multi-SIM incidence, and intense competition, subscriber acquisition decelerated this quarter to 5.7 million gross additions, 3% lower than second quarter’s 5.9 million. Blended churn rate went up from 5.7% to 5.8%, bringing net incremental subscribers to around 684,000 in the third quarter, 39% below last quarter’s over 1.1 million.








Quarter on Quarter                      Year on Year


Net Service Revenues (Php Mn)




Broadband ….¼¼¼¼¼¼¼¼¼¼¼¼ Fixed Line Data¼¼¼¼.¼¼¼¼¼¼¼ Fixed Line Voice¼¼¼¼…¼¼¼¼¼¼

Fixed Line & Broadband Net Service








971 611








906 649











30 Sep






2,827 1,914


30 Sep






2,598 2,142













Globe’s broadband business ended the period with over 1,360,000 subscribers, 35% higher than the prior year’s level when the company breached the 1 million subscriber mark. This was driven by the sustained subscriber gains in Tattoo On-the-Go, the Company’s nomadic broadband service, and in Tattoo WiMAX, Globe’s fixed wireless service for at-home use. Wireless broadband subscribers now account for 79% of total broadband customers, up from 76% last year.


The continued subscriber gains translated to an increase in revenues, with broadband service revenues increasing by 35% to close the period at P5.6 billion compared to last year’s P4.1 billion. The broadband business now comprises 11% of consolidated service revenues compared to 9% last year.


Quarter on Quarter                       Year on Year

                                                                                                                   3Q             2Q          QoQ        30 Sep         30 Sep         YoY

                                                                                                                  2011           2011        Change         2011           2010        Change

(%)                                         (%)

Cumulative Voice Subscribers –

Net (End of period)            …………………………….      666,699        649,187           3%       666,699        599,059         11%


Cumulative Broadband Subscribers

Wireless                                                                                            1,078,143    1,020,888         6%     1,078,143      762,870           41%

Wired                                                                                                 285,566        272,557           5%       285,566        243,590             17%

Total (end of period)                                                           1,363,709    1,293,445        5%     1,363,709    1,006,460      35%

Includes fixed wireless and fully mobile broadband subscribers.


The fixed line data segment continued to grow at a steady rate, ending the period with P2.8 billion in revenues, an increase of 9% over the same period last year. This is driven by the continued demand for domestic leased lines and high-speed internet services for large enterprises. Growth continues to be fueled by the Company’s expansion of its network of high-speed data nodes, transmission links, and international bandwidth capacity to serve the requirements of business and enterprise clients.


Total fixed line voice revenues decreased by 11% to P1.9 billion from P2.1 billion last year, mainly due to the continued weakness in demand for voice-only, fixed line products. This decline was partially offset by the continued strong performance of Globe’s DUO and SUPERDUO service, which led to the growth in cumulative fixed line voice subscribers of 11% year-on-year to 666,699. On a sequential basis, cumulative voice subscribers increased by 3% due to the increase in both postpaid and prepaid subscriptions to the DUO and SUPERDUO service as well as fixed line voice, and bundled broadband and landline acquisitions in the business segment.



For questions, please contact:

Ditas L. Santamaria

Financial Planning & Analysis

(632) 730-2982



Jose Mari S. Fajardo

Investor Relations

(632) 730-2820




Filed under: Globe Telecom News

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