Globe Telecom Inc. said it will spend $850 million this year to expand its mobile and fixed broadband networks.
The company owned by conglomerate Ayala Corp. said the sustained level of capex was aligned with its vision to improve internet services in the Philippines and establish first world internet connectivity.
Globe last year also programmed $850 million in capital expenditures.
Globe president and chief executive Ernest Cu said the company would expand its data network and address the surge in customer demand for on-demand video content.
“Majority of the company’s capex for 2018 is geared to meet customer demand for more bandwidth-intensive content, which, in turn, will support the revenue momentum of our data-related services,” Cu said.
He said Globe had progressively increased its capex spending since 2015, averaging 31 percent annually on a capex-to-revenue ratio basis.
Using the annualized year-to-date September 2017 revenues and the full year 2017 guidance of $850 million capex, full year 2017 capex-to-revenue ratio will be nearly 34 percent.
“We continue to be efficient in our network build, evidenced by the superiority of our mobile network, in terms of higher 3G and LTE availability both on a regional and nationwide basis,” he said.
He noted Globe mobile data network for the first nine months of 2016 and 2017 carried over 2.4x the traffic of competition.
Cu said capital spending for the year would finance the company’s commitment to provide fast internet service to two million homes by 2020.
A good portion of the company’s capex will also be utilized for the deployment of massive MIMO technology to expand and enhance its LTE network.
The technology, which enables a mobile network to multiply the capacity of a wireless connection without requiring more antennas, increases wireless throughput, accommodating more users at higher data rates with better reliability while consuming less power. In the case of home broadband, speed and range benefits of MIMO technology allow customers to have reliable data connection especially since more and more customers are now using video streaming services.
Globe Telecom’s data-related revenues in the first nine months of 2017 accounted for over 53 percent of the company’s top line for the period.