GDP surge to fuel Globe growth


The country’s robust economic growth is expected to further boost Globe Telecom’s mobile revenue growth this year on expectations of stronger domestic spending.

“The Philippines has been enjoying assertive GDP [growth domestic product]growth and it is driving a lot of confidence in the economy. Domestic spending remains resilient, which somehow insulates the country from the economic challenges and uncertainties from the external environment. This bodes well for our business,” said Ernest Cu, president and chief executive officer of Globe.

The official was referring to the country’s economic growth of 7.8 percent in the first quarter of the year.

The country’s economic growth in the three months of the year was at its fastest pace in nearly three years, outperforming bigger economies in Asia and was well above the government’s growth target of 6 percent to 7 percent for the year.

In the same period, the growth of Globe’s mobile business has been underpinned mainly by a 13-percent year-on-year growth in its mobile subscribers, to hit a fresh record high of 35.1 million at the end of the first quarter.

Given current trends, the company’s postpaid segment will continue to drive revenue growth, Cu emphasized.

The Globe official also said that current trend shows that many consumers are shifting from prepaid to postpaid mobile service, and there is also a growing inclination towards the use of smartphones.

“We are experiencing a resurgence in the postpaid mobile market as we’ve been seeing a lot of migration from prepaid to postpaid,” Cu said.

He added that the company’s mobile business posted a 3-percent increase in revenue growth in the first quarter, amid a challenging and competitive environment.

In 2012, the company booked P22.85 billion in postpaid revenue, pushing total mobile revenues to P67.19 billion, a 6-percent growth from the previous year.

“Over the short term, mobile revenue growth can be sustained primarily by momentum in postpaid,” said Cu,

Growth trajectory in the postpaid segment will likely continue moving forward, following improving quality of acquired postpaid subscribers last year. About 42 percent of regular postpaid net additions signed up for plans with monthly service fees of P999 and above, compared to just 19 percent in 2011.

Company efforts to reinvest a portion of its postpaid revenues in a bid to support additional subscriber acquisitions could further support revenue generation from postpaid.

According to Cu, revenue growth is also expected to be driven by increasing use of mobile Internet and broadband.

Last year, mobile browsing generated revenues of over P3.1 billion in 2012, a 55-percent surge when compared to P2 billion in 2011 attributed to increased smartphone penetration and the company’s continued launch of affordable mobile data plans.

Rosalie C. Periabras


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