Globe says $750M allotted to 2017 capex

Globe Telecom Inc. is spending $750 million this year, to support the roll out new products and maintain its lead in data service.

In an interview with reporters on the sidelines of parent Ayala Corp.'s media event late Wednesday, Globe President and Chief Executive Officer Ernest L. Cu confirmed  the telco allocated a capital spending of $750 million.

The amount is lower by 28.57 percent than the $1.050 billion the company earmarked for capital expenditures (capex) in 2016.

In February 2016, Globe announced a $750-million capex for the whole of last year. But come October, the company added $300 million more to fill in what it said were vital infrastructure gaps in its network expansion.

"We generated cash flow, we borrowed some money last year for the higher than usual capex and the San Miguel (telco buyout). I think we're okay this year," Cu said.

Globe entered into a co-acquisition deal with Pangilinan-led PLDT Inc. last year,  covering the telecom business of San Miguel Corp. for P69.1 billion – a deal that included debt and invaluable radio frequencies that encompassed the coveted 700 megahertz (MHz) spectrum.

Asked why the company has a lower capex for 2017, Cu noted Globe sought the right balance among such factors as income and expenses and profitability. "We're trying to ... because we have to balance everything out – the revenues, the EBITDA (earnings before interest, tax, depreciation and amortization), market and cash generation with capex."

Data business expansion will benefit largely from the capex Cu said. "We're the leader in data so we have to do that."

The company is tracking to hit the roll out of some two million broadband lines with a speed of at least 10 megabits per second (Mbps) by 2020, the telco executive noted.

"After focusing on mobile for many years, we are catching up with the deployment of infrastructure for home broadband. Globe is accelerating home broadband deployment and plans to roll out 400,000 ultra-fast broadband lines by end 2017," Cu said.

"Progressive rollouts will be done within the next three years until 2020 to serve at least two million homes," he added.

Shares of Globe Telecom Inc. opened at P1,649.00 apiece on Thursday, down from P1,655.00 at the close of trading on Wednesday. — VS, GMA News