Globe Telecom, the largest mobile operator in the Philippines by connections, reported strong growth in service revenue across all business lines in Q4 2017 with continued momentum in data uptake, though higher network investments weighed on its bottom-line.

Despite a 6 per cent year-on-year increase in service revenue to PHP32.8 billion ($641 million), its net profit in the quarter fell 5 per cent to PHP2.1 billion. The company attributed the decline to increased investments in its data network, which pushed up non-operating expenses and depreciation charges. For the full year Globe Telecom also posted a 5 per cent decline in net income to PHP15.1 billion.

Globe Telecom president and CEO Ernest Cu said: “We are confident that our continued investments in our network’s data capacity and coverage will allow us to continue to provide superior customer experience and improve the overall connectivity in the country, while building a solid foundation to deliver sustainable long-term growth and shareholder value.”

Growth driver
In Q4, mobile revenue grew 7 per cent year-on-year to PHP25.4 billion driven by continued growth in mobile data revenue, which increased 23 per cent to PHP11.7 billion. Mobile data accounted for 44 per cent of total mobile revenue, up from 38 per cent in Q4 2016. SMS revenue was flat at PHP5.76 billion and mobile voice fell 5 per cent to PHP7.86 billion.

Home broadband revenue rose 7 per cent to PHP3.93 billion, while its corporate data business recorded 5 per cent revenue growth to PHP3.67 billion.

The company’s mobile subscriber base dipped to 60.7 million as of end-December 2017, down 3 per cent from end-2016 due to a change in how it reports prepaid subscribers beginning in 2017. Prepaid ARPU rose 6 per cent to PHP123 and post paid ARPU increased 4 per to PHP1,177.

Globe Telecom had a 50.5 per cent market share at end-December, data from GSMA Intelligence showed.

Its full year capex increased 16 per cent to PHP42.5 billion, with 82 per cent allocated to upgrading its data networks. It added 595 LTE base stations in Q4 to end the year with 37,517 total sites.

The company expects revenue in 2018 to grow at a low single-digit rate, capex to remain unchanged from 2017 and margins to be impacted by the increasing contribution of lower-margin data-related products.