GLOBE SIGNS A P5-BILLION LOAN FOR CAPITAL SPENDING | Marvin Germo
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GLOBE SIGNS A P5-BILLION LOAN FOR CAPITAL SPENDING

By: Marvin Germo | December 17, 2019

Globe Telecom Signs A Term Loan

Globe Telecom tapped the Development Bank of the Philippines (DBP) for a loan to be used for its capital spending. Recently, it inked a P5-billion term loan with DBP, which is run by the government. The loan is primarily allotted to enhance its data infrastructure in the Philippines. We all know that Globe is one of the leading data providers here in our country and it’s been receiving an increasing demand for its data services. Now that 5G networks have been available in selected parts of the country, we might still see changes in the demand for the coming months.

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Globe’s Capital Spending

The P5-billion loan will go majorly to the capital expenditures of Globe and some will be utilized for general corporate requirements and refinancing of maturing obligations. The capital spending of the company is set to hit P63 billion this 2019. A large portion of it was for data-related capital expenditures so that it could improve its network data capacities and capabilities. The telecommunications company disclosed that as of the end of September, the total cash capital expenditures were at P32 billion. This was 2% lower that the expenditure last year which stood at P32.5 billion. 75% of it was utilized for data networks.

Improvement and Reinvesting

As I’ve said earlier, the demand for Globe’s data services keeps on increasing. This just means that a lot more individuals and corporates are needing the telco’s products and services. Globe said that the company continues to reinvest in the network in order to ensure that network improvements are sustained. It’s currently on track to hit its capital expenditure commitments of $1.2 billion by end-2019. However, Globe disclosed that due to the nature of commitments, the cash capital expenditures are expected to reach just around $900 million by the end of the year since some payment milestones are expected to leak out in 2020.

Increasing Demand in Data Services

The company noted that from January to September, the consumer shift to digital has increased mobile data traffic to about 1,200 petabytes. This has also exceeded the 2018 full-year consumption. Per the company, the strong growth in smartphone subscriptions and demand for data-intensive applications like video, music apps, and online games played important roles in this event. Globe’s data is 70% of its service revenues—9% from corporate data, 14% from home broadband, and 47% from mobile data.

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