Globe Telecom Inc. has scaled down its capital spending by a fifth as net income dropped by 5 percent in the first half of 2020.
The Ayala-led telco said the revised capital expenditure (Capex) guidance for 2020 is estimated to be P50.3 billion, lower than the original P63 billion given the delays in the rollout during the community quarantine period in the country.
So far, Globe invested a total of P20.9 billion in its network in the first half of the year, 10 percent higher than last year and representing 29 percent of gross service revenues.
Bulk of the capex spending went to data-related requirements, comprising 76 percent of the total capex spending for the period.
Despite limitations brought about by the community quarantine and physical distancing restrictions, Globe pushed for the expansion of its 5G coverage in key areas in the metro, specifically in the Makati and Bonifacio Global City Central Business Districts (CBDs), to enable the 5G experience and make it available to its mobile customers by the third quarter of this year.
“Globe’s network has withstood and continues to prove its resilience during this COVID-19 pandemic. Our priority to keep our network up to speed has allowed us to continuously serve our customers and ensure that communities stay connected during these tough times,” Ernest Cu, president and chief executive of Globe said.
Globe reported a consolidated net income of P11.5 billion in the January to June period, down by 5 percent from P12 billon a year ago.
Similarly, core net income declined year-on-year by 8 percent from P12 billion in the same period of 2019.
“While we expect revenues for full year 2020 to decline by low single digit against last year, given the impact of community quarantine restrictions, we do see growth opportunities on the home broadband front and ICT space,” Cu said.
He added that higher demand for internet connectivity and cloud solutions are expected as companies have been forced to embrace remote working for employees and to fast-track their digitalization efforts.
“Mobile data and digital solutions will also increase traction with more customers adopting a digital lifestyle in the new normal … And, even in the face of growing uncertainties in this time of the pandemic, our unwavering commitment and focus to better serve our customers and the nation’s needs, will keep us ahead through these difficult times,” Cu said.
Globe’s consolidated service revenues in the first half of the year was at P72.4 billion, a decline of 1 percent from P72.9 billion a year ago.
On a quarterly basis, revenues dropped by 4 percent given the full impact of ECQ/MECQ to operations.
Mobile business revenues for the second quarter declined by 7 percent from the P26.8 billion reported in the first quarter bringing total revenues for the first half of the year at P51.8 billion, 5 percent lower than same period last year.
Offsetting the decline in mobile business, home broadband sustained its growth momentum, generating a 19 percent revenue growth to reach P12.5 billion this period from P10.6 billion reported a year earlier.
Corporate Data revenues on the other hand, contracted by 3 percent year-on-year with total revenues of P6.2 billion as of end-June 2020, largely coming from lower domestic and international services.
Total operating expenses including subsidy posted P34 billion for the period, a 1 percent decline from same period last year due to the cost saving initiatives put in place to manage some of the impact from the pandemic.