MANILA - Globe Telecom, one of the country’s leading telecommunication service providers, yesterday announced its plan to beef up investments on broadband business this year, after consistent double-digit top line growth last year.
“The channel of communication has gone beyond text messaging and voice with the emergence of low-priced equipment such as laptops, netbooks and personal computers in the market, as well as with the emergence of social networking,” said Globe Telecom president and chief executive officer Ernest Cu in a press briefing held
after the firm’s annual stockholders’ meeting at Hotel Intercontinental Manila yesterday.
“The broadband business will be one of the key growth drivers this year.”
Last year, Globe reported P62.4 billion in consolidated service revenues, from P62.9 billion in 2008.
Growth in the broadband business and the double-digit expansion of the firm’s corporate, fixed-line data business offset the mobile business, whose revenues last year slid to P53.3 billion from the P55.4 billion in 2008.
2.5M subscribers
The broadband industry now has 2.5 million subscribers from 350,000 in 2006. Its revenues rose to 74 percent or P3.3 billion from P1.9 billion in 2008, with the firm’s re-launching of the Globe Tattoo broadband service.
The firm likewise accelerated its 3G and WiMax network to further enhance the broadband market. WiMax now has over 900 sites available in 190 cities and municipalities worldwide.
Of the $500 million for capital expenditures this year, about $250 million is set aside for the broadband business. This will fund efforts to augment capacity and expand the coverage of its Globe DSL, WiMAX and 3G broadband services.
With the economy gradually recovering and the expected increase in spending related to the May elections, Cu said the firm expects to be more resilient this year.
“The election-related spending and the optimism that comes with the imminent new government will likely boost the economy. The OFW (overseas Filipino workers) will
remain robust and the business process outsourcing sector will continue to expand,” Cu said.
He added that intense competition in the industry could affect growth prospects and that the entry of new players might disrupt stability in pricing.
Globe Telecom’s board of directors chairman Jaime Augusto Zobel de Ayala reported a 26 percent all-time high return on equity, up from 21 percent recorded in 2008. This he attributed to higher profits and capital management initiatives since 2006.
Total shareholder return for the year was at 30 percent, driven by a 16 percent improvement in share prices at a dividend yield of 14 percent.
“This was one of the highest dividend yields among telecom companies in the region,” Ayala said.
About P15 billion in dividends were paid out last year. This included special dividends of P6.6 billion as part of the firm’s effort to optimize its balance sheet, while retaining the flexibility to pursue growth opportunities.
The board likewise upgraded the firm’s dividend pay-out policy starting this year, raising the regular pay-out from 75 percent to a range of 75 percent to 90 percent of the prior year’s net income.
Globe Telecom closed 2009 with a net income after tax of P12.6 billion or an 11 percent increase from 2008.