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ABS-CBN terminates telecom deal with Globe

ABS-CBN Corp. said Monday it terminated its network sharing agreement with Globe Telecom Inc. because of the venture’s “financially unsustainable” mobile business model.

“ABS-CBN Convergence and Globe reached an agreement not to renew their mobile network sharing agreement and to look at more profitable opportunities in the content business,” ABS-CBN said in a disclosure to the stock exchange.

ABS-CBN Convergence teamed up with Globe in 2013 for a five-year network sharing agreement to deliver content and telecommunications services on mobile devices through its ABS-CBNmobile brand.

Under the agreement signed in May 2013, Globe would provide the capacity and coverage on existing cellular mobile telephony network to ABS-CBN Convergence Inc. on a nationwide basis. 

The parties also shared assets such as servers, towers, and switches. The network sharing agreement was scheduled to expire this year.

Losses of ABS-CBN Mobile last year were almost the same as in 2016. ABS-CBN Mobile posted a net loss of P560 million in 2016, lower than the P600-million net loss in 2015.  

ABS-CBN and Globe said, however, they were exploring new ways and synergies to complement their business models.

“Leveraging on ABS-CBN’s expertise as top content provider to the Filipino audience and the vast reach of Globe as the leading telecommunications company, both companies have decided to shift their focus in maximizing synergies,” the broadcast network said.

These product synergies include the promotional bundling of ABS-CBN TVplus boxes with Globe At Home prepaid WiFi and the availability of ABS-CBN TVplus’ KBO (Kapamilya Box Office) and iWant TV over-the-top services to all Globe subscribers, which are already commercially available.

Meanwhile, all ABS-CBNmobile prepaid, postpaid and Sky Mobi subscribers will continue to enjoy text, call, and data services until the final date of the termination that remains to be approved by the National Telecommunications Commission.

Topics: ABS-CBN Corp. , Globe Telecom Inc. , stock exchange , ABS-CBNmobile , ABS-CBN Convergence
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