Mobile phone sector sees single-digit growth

Published by rudy Date posted on February 5, 2009

The country’s mobile phone service sector is projected to post a low to mid-single digit growth rate this year compared to last year in terms of revenues, in step with the expected growth for the economy.

This as Globe Telecom president and CEO Gerardo C. Ablaza Jr. said he expects a better year for the company in 2009, with modest growths in revenues and bottom line.

Ablaza said there will be a significant difference between the 2008 and 2009 content on revenues, as he explained that Globe was challenged in the first half of last year due to a one-time issue in its network that affected the momentum of subscriber pick-up especially in the Visayas and Mindanao. “This network problem impacted us in the course of last year,” he said.

Globe’s top executive said the company started 2009 on a higher ledge, with the fourth quarter of 2008 posting record revenues. “2009 will be better from a revenue viewpoint. But of course, everything will depend on how the economy will perform and how the consumer purchasing power will develop this year,” Ablaza stressed. Based on the January 2009 top-ups, he said “the numbers are encouraging vis-à-vis our expectations.”

Ablaza likewise projects that multi-SIM use among subscribers is also expected to continue to impact average revenue per user (ARPUs) for the industry. Globe estimates multi-SIM usage to be at an average of 16 to 17 percent.

During yesterday’s investors’ briefing, Ablaza also said they expect industry churn rates to remain elevated with increasing propensity for one-time or short-term use of SIMs.

“We continue to be cautiously optimistic about the prospects for the wireless sector, which will be slower compared to last year. But there will be some resiliency in mobile usage,” he pointed out.

Globe estimates that the mobile penetration rate as of end-2008 has hit 75 percent.

In the case of the broadband sector, Ablaza said they project the growth momentum to continue into this year, offsetting declines in the traditional landline service. For wireline and corporate data, he said there will still be growth opportunities as corporate demand remains resilient, particularly for mission-critical services including those of the business process outsourcing (BPO) sector.

He noted that Globe’s broadband business is starting off on a higher ground due to significant subscriber additions last year.

 To capitalize on the momentum generated during the fourth quarter of 2008, Globe said it is increasing its share of telco spend and sustaining its second half 2008 growth momentum.

For broadband, Ablaza said the company will deploy leapfrog technologies such as Wi-Max and 3G, improve network quality and coverage, and introduce affordable products and bundles that will drive adoption in broader markets.

Ablaza also said Globe remains committed to a dividend policy of 75 percent of prior year’s net income.

Globe chief finance officer Delfin Gonzalez Jr. said the flattish revenues in 2008 compared with 2007 were reflective of a weaker consumer market and more intense competition.

Globe posted a consolidated reported net income of P11.28 billion in 2008, down 15 percent from P13.28 billion in 2007. Core net income likewise dropped by 14 percent, from P13.7 billion to P11.76 billion.

Gonzalez said consolidated margins are expected to be sustained at full-year 2008 levels in the coming year. In 2008, Globe reported a consolidated EBITDA margin of 59 percent.–Mary Ann Ll. Reyes, Philippine Star

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