MANILA, Philippines - Globe Telecom Inc. saw its consolidated net income drop by 10% to P2.7 billion in the first quarter of 2012, as the telecommunications company continued to make significant investments in subscriber acquisitions and network infrastructure.

Globe's profits declined even as its first quarter consolidated service revenues hit an all-time high of P20.2 billion, 6% higher than last year's P19.1 billion. This was attributed to sustained growth in Globe's mobile, broadband and fixed line segments.

Core net income, which excluded one-time items, fell by 7% in the January to March period to P2.74 billion from year-ago figures.

Despite intense competition from the combined forces of Smart Communications and Sun Cellular, Globe still made gains in its mobile and broadband businesses.

Mobile revenues rose by 6% to P16.57 billion in the first quarter from P15.62 billion during the same period last year, "despite a very challenging market underscored by subscribers’ continued preference for value offers, intense competition, and increased multi-SIM incidence."

Broadband revenues grew by 13% year-on-year to P2.017 billion in the first quarter, on strong take-up of its Tatoo-on the-go product offerings.

Operating expenses and subsidy rose by 16% to P11.6 billion in the January to March period, driven by higher subsidy and marketing expenses to acquire new and re-contract existing post-paid subscribers.

Ernest L. Cu, Globe president and CEO said the company is "pleased" with its results, noting that it has sustained momentum in the last 6 quarters.

"The industry is entering a new phase, and we see 2012 as a year of investments in our customers, in our networks, and in our systems and processes. We expect to emerge from this investment period with significantly improved capabilities, well-positioned to grow and deliver enhanced value to all our stakeholders," he said.

During the January to March period, Globe spent P4.8 billion in capital expenditures, on the back of its investments in broadband and mobile networks.

The company has allocated $750-800 million in capital expenditures this year, of which $530 million is for transformation initiatives and $220-270 million is for business-as-usual investments for its fixed line data network, submarine cable facilities and IT infrastructure.

Globe has over 31 million mobile subscribers, as of end March, 3% higher than the P30 million it had at the end of 2011. Broadband customers are at almost 1.5 million.



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Peter M (not verified) on Wed, 2012-09-05 20:09

Very informative post. Thanks.

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