Philippines-based Globe Telecom reported a sharp fall in profit for Q1 due to acquisition related costs and higher network investments, but service revenue increased on the back of double-digit gains in data revenue.
Net income for the period dropped 13 per cent year-on-year to PHP3.8 billion ($76.8 million) due to charges related to the acquisition of San Miguel Corp’s telecoms assets in 2016. The company said higher interest expenses and depreciation charges from its network investments also weighed on its profit.
Service revenue increased 4 per cent over Q1 2016 to PHP31.1 billion in the recent quarter, with mobile turnover rising 3 per cent to PHP23.8 billion. However, post paid revenue was flat year-on-year.
“We are seeing encouraging improvements this quarter, despite the temporary setback on profits as we continue to lay down the foundation to secure sustainable growth in the future,” said Globe president and CEO Ernest Cu (pictured).
Mobile data revenue increased 10 per cent year-on-year to PHP9.97 billion, while voice revenue fell 3 per cent to PHP7.9 billion. SMS revenue halted a free fall, rising 3 per cent to PHP5.9 billion in the quarter.
Data-related revenue accounted for 53 per cent of total service revenue in Q1 2017, up from 50 per cent in the 2016 quarter.
Globe Telecom’s mobile subscriber base increased 2 per cent year-on-year to 58.6 million at end-March, but post paid users fell 4 per cent to 2.47 million. Post paid ARPU rose 5 per cent to PHP1,158 and prepaid ARPU fell 4 per cent to PHP111. Prepaid ARPU at TM, Globe’s mass-market brand, fell 1 per cent to PHP64.
The operator’s home broadband revenue rose 9 per cent in Q1 to PHP3.8 billion, with the growth driven by an 8 per cent rise in home broadband subscribers to 1.19 million at end-March.
Globe said it rolled out 445 LTE sites during the quarter and spent PHP8.6 billion on capex. Its capex budget for 2017 is PHP37 billion.