Globe announces network modernization, IT transformation

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Friday, November 11, 2011

GLOBE Telecom Inc. will undertake a landmark mobile network modernization program over the next two to three years, the company said in a statement Friday.

The massive network upgrade is aimed at significantly improving network quality and customer experience, increase capacity, drive down costs, and prepare the network to meet the needs of customers today and in the future, said Globe.

The company also acknowledged that given the growing demand for bandwidth-heavy services, the modernization program will bring significant improvements to network capacity leading to improved reliability, ease of access and pervasive coverage.


For Globe, this transformation effort will enable improved revenue growth prospects, savings in capital spend and operating expenses, as well as efficiencies resulting from synergies with a dedicated vendor partner.

By adopting the latest technologies available today, Globe will be in a better position to provide the needs of its customers, secure and enhance its position in this highly competitive market, it said.

Aside from the modernization program, Globe is also initiating an IT transformation project to create a streamlined and integrated information environment, in response to changing market and business demands.

“The system transformation effort is a comprehensive re-engineering of Globe Telecom's IT systems over the next two years. This will result in convergent billings and more innovative product development, faster response to customer queries and service requests by our stores and call centers,” said the company. “The endeavor will result in quicker time-to-market for new products that adapt to changing customer needs, and timely customer loyalty offers enabled by enhancements in customer segmentation and usage monitoring.”

With these, Globe is tapping external partners to help manage the modernization efforts. It awarded the network modernization to Huawei, “given its technical expertise and strong track record of success.”

The company said that it expects to realize additional synergies with Huawei in establishing a Joint Innovation Center (JIC) that would bring the latest technological developments and help address its customization needs.

“Through the JIC, Globe will be able to learn network best practices and tap into the latest developments of the 17 research and development centers that Huawei has around the world. The company expects to sign the definitive agreements with Huawei in the coming days,” Globe said in a statement.

For the IT systems upgrade, Globe has selected Amdocs as technology partner. The company expects to complete the definitive agreement with Amdocs by the first quarter of 2012.

"Amdocs has delivered some of the industry's most complex transformation projects to some of the largest players in the world, and we are excited to be able to draw on this experience for Globe," said Eli Gelman, Amdocs' chief executive officer.

Globe will invest around US$700 million in the next five years to support the network modernization project, and another US$90 million to complete the IT transformation initiative. This will be the biggest and most significant investment that the company has undertaken in the past two decades. It targets completion of the two projects over a period of 24 to 36 months.

The company also announced that it will change its dividend pay-out policy to be at 75 percent to 90 percent of prior year's core net income instead of reported net income.

“This will ensure that dividends will remain sustainable and yields competitive. The dividend policy change will take effect with the 2012 dividends, based on 2011 core net income,” it said.

The network and IT transformation programs are expected to generate savings in operating expenses and capital expenditures totaling to US$180 million and US$210 million, respectively, over the next five years, in addition to the revenue uplift driven by the network quality improvements and increased capacity.

Since it will involve replacing network equipment and IT systems, Globe expects that assets with net book values estimated at US$388 million will need to be decommissioned after modernization. This estimate is before any possible proceeds from resale and is still subject to actual site validation.

All efforts will be taken to maximize the re-use of the existing equipment, said Globe. (PR)


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