Globe Telecom expects 7%-9% profit growth in 2016
MARKET SHIFT. Local telcos, like Globe, have the opportunity to capture bigger revenue rewards from the mobile data revolution. Shutterstock background image
MANILA, Philippines – Ayala-led Globe Telecom Incorporated expects its net income for the year to grow by 7% to 9%, seeing uptake in data-related services continuously offsetting decline in traditional voice and SMS revenue.
"Our guidance for this year is high single-digit growth. That is 7% to 9%," Rizza Maniego-Eala, Globe's chief finance officer, told reporters a day after announcing a 3% net profit increase in the first half of the year.
The Ayala-led telecommunications company told the Philippine Stock Exchange on Wednesday, August 3, that its net income increased by 3% to P8.96 billion in the first 6 months of 2016, from P8.71 billion during the same period a year ago. (READ: Globe spends, makes money on mobile data phenomenon)
"Bayantel (Bayan Telecommunications Incorporated) contributed P3 billion to our net income. It is a good addition to us. It did not destroy our profitability profile," Maniego-Eala said on the sidelines of a media briefing in Taguig City on Thursday, August 4.
Excluding the gains from Bayantel, Globe's 6-month earnings fell 1% to P8.59 billion.
It was last year when Globe hiked its stake in Bayantel to 98.57% by buying out entire stakeholders, including Lopez Holdings Corporation, for P1.8 billion.
Without Bayantel, service revenues of Globe still increased by 6% to P56.9 billion in the first half.
A throwback to yearly double-digit growth
With the stiffer competition and changing demands of consumers, Maniego-Eala said the telco's financial performance is taking a hit.
Last year, the increase in net income for Globe had been in double digits – 23%.
"Now that competition is stiffer and they made some changes, [we] are now also seeing decline in our voice and SMS," Globe's chief finance officer said.
Looking back, Maniego-Eala described 2015 as "a really good year" for the telco.
"If you look at our records, we were gaining market share, so because of that, our revenues from voice and SMS were really holding up. This was when people were expecting it to drop because of smartphone users [uptake]," she said.
For 2016, Maniego-Eala said Globe is optimistic that its data-related service will continue to grow fast in the remainder of the year.
"Mobile data is up 46% in the first half, therefore offsetting some of the decline in voice and SMS. Moving forward, we continue to see data rising, so we have built our network for the digital lifestyle," she added.
In its regulatory filing on Wednesday, Globe said its "strong mobile data growth offset the 11% drop in mobile voice revenues and 16% decline in mobile SMS revenues." – Rappler.com
