Globe Telecom forms company for 'new, strategic' businesses
MANILA, Philippines – Globe Telecom, Incorporated will form a holding company to house its “new and strategic” ventures in the future.
The company “discloses the approval to create a wholly-owned holding company through which new and strategic businesses are intended to be made and consolidated," it said in a brief disclosure to the Philippine Stock Exchange Tuesday, June 16.
"The creation of this holding company aims to provide more focus on developing and growing said businesses," it said.
Asked for the name of the new holding company, Globe Chief Financial Officer Alberto de Larrazabal said in a mobile phone reply: “No name yet. It’s just to have a legal entity for flexibility on the future.”
Globe spokesperson Yoly Crisanto was pressed for further details, but she said that her company “cannot provide much details as Globe needs to stay close to the disclosure at this time.”
Globe's subsidiaries are G-Xchange, Incorporated; Entertainment Gateway Group Corporation; EGGstreme (Hong Kong) Limited; GTI Business Holdings, Incorporated; and Kickstart Ventures, Incorporated.
In the first quarter of 2015, Globe’s net income surged 43%, riding on strong revenue growth in mobile and broadband.
Globe said it is spending P29.12 billion ($650 million) this year. It is also set to spend another P8.6 billion ($200 million) from its unused capital expenditures allocation last year.
The budget for the year will be used mainly on deployments of LTE mobile and LTE@Home, capacity and coverage augmentation of its 3G, HSPA+, and DSL network, as well as its requirements for domestic transmission and international cable capacities.
The Ayala-led telecommunications company said it is expecting this year to be “challenging” due to the “intense competition in the capital-intensive industry.” (READ: Telco wars: Who's really number 1?)
The London-based Fitch Ratings in November 2014 even said that telecommunication firms in the Philippines will incur higher capital spending budget and lower profits this year due to a need to expand their fiber networks and cope with the heavy demand for data services.
Globe’s subscriber base increased 13% to 46.1 million in the first quarter of the year from 40.75 million recorded in the same period last year. Its prepaid subscriber base jumped 13% to 43.83 million while postpaid subscribers rose 9% to 2.26 million from 2.09 million. – Rappler.com
Business people’s hands image via Shutterstock