Globe (PSE:GLO), a leading digital platform in the Philippines is now moving on the next phase of its capex investment cycle, with Globe’s Board of Directors approving a significantly lower cash capex level of US$1.3 billion for 2023, a 30% reduction in year on year cash capex spending versus an expected peak of ~US$1.9 billion in 2022.
The Company sees its capex investments peaking this year given the ramped up spending to take full advantage of the streamlined permitting process for the mobile network rollout in the country. This allowed Globe to maintain its industry-leading network consistency and enhance the quality of its customer experience.
As of end-September this year, Globe has deployed close to 1.4 million FTTH lines, built 1,064 new cell sites, upgraded over 10.6 thousand mobile sites to LTE, and installed 1,887 new 5G sites nationwide.
Globe’s network rollout momentum continues and remains on track to surpass last year’s new cell site builds of 1,407. These consistent network investments have earned the Company the title of Most Reliable Mobile Network in the Philippines, which is a combination of being the most consistent and most available network.
Globe logged the highest scores in All Technology Consistency with 82.55 and All Technology Availability with 92.03, according to the third quarter analysis by Ookla® Speedtest Intelligence® data.
With these investments, the Company was able to strengthen its network and keep up with the burgeoning data needs of Filipinos, especially during the past two years. Through the support of the government to simplify the industry’s permitting process, the Company was able to fast track its network expansion, consistent with the Company’s bid to make fast and reliable connectivity pervasive and accessible to more households and businesses.
The Company’s significant capex investments also fortified the network, allowing for resilient performance during the pandemic and sustained revenue growth in 2022 despite challenging market conditions. Consolidated service revenue for the first nine months of the year are at a record high ₱118 billion, led by mobile data and corporate data services and supplemented by growth from non-telco services.
Given the headway made towards future-proofing the network, Globe now has the flexibility to make targeted investments for better capital efficiency, which will allow capex intensity to ease beginning 2023.
During its meeting on December 7, Globe board approved a US$1.3 billion capex budget for 2023, representing a 30% reduction year on year, returning to pre-pandemic level of spending. This move aims to optimize capex spending in the next few years by focusing on maximizing utilization of existing fiber assets and taking advantage of the arrangements made with towercos to maximize tower builds.
“Our aim to deliver first world connectivity to the Philippines, combined with the accelerated digitalization brought about by the pandemic have driven the company to invest significant capex into both the mobile and broadband network for the past few years. After investing heavily on our builds and rollouts, we now have a significant backbone for our network, which allows us to shift our focus towards capital efficiency and optimization, beginning with 2023’s US$1.3 billion guidance, with the target of eventually bringing this down to US$1 billion by 2024,” Globe President and Chief Executive Officer, Ernest Cu, said.
The company strongly supports the United Nations Sustainable Development Goals, particularly UN SDG No. 9 which highlights the roles of infrastructure and innovation as crucial drivers of economic growth and development. Globe is committed to upholding the 10 United Nations Global Compact principles and 10 UN SDGs.