Globe Telecom

Globe Telecom Inc.

The Globe Tower, the headquarters of Globe Telecom in Bonifacio Global City
Type	Public company
Traded as	PSE: GLO OTC Pink Current: GTMEF (ordinary shares) OTC Pink Current: GTMEY (ADRs)
Industry	Communications services Remittance
Founded	Manila, Philippine Commonwealth (1935)
Headquarters	Bonifacio Global City, Metro Manila, Philippines
Key people	Jaime Augusto Zóbel de Ayala II, Chairman Ernest Cu, President and CEO
Products	Mobile Telephony Fixed-line Telephony Broadband Services
Revenue	₱99 billion (2014)[1]
Net income	₱13.4 billion (2014)[1]
Owner	Structure[2] - SingTel (21.51%) - Ayala Corporation (13.85%) - Asiacom (54.43%) - Directors, Officers, ESOP (0.07%) - Public Stock (10.14%)
Number of employees	6,182 (2014)
Subsidiaries	Bayan Telecommunications Innove Communications Kickstart Yondu GXI GTI Asticom
Website	www.globe.com.ph

Globe Telecom commonly shortened as Globe, is a major provider of telecommunications services in the Philippines, supported by over 6,200 employees and nearly 1.05 million retailers, distributors, suppliers, and business partners nationwide. The company operates one of the largest mobile, fixed line, and broadband networks in the country, providing communications services to individual customers, small and medium-sized businesses, and corporate and enterprise clients. Globe currently has about 48.4 million mobile subscribers, nearly 3.5 million broadband customers, and 859 thousand landline subscribers.

The company’s principal shareholders are Ayala Corporation and Singapore Telecom. It is listed on the Philippine Stock Exchange under the ticker symbol GLO and had a market capitalization of US$7.4 billion as of the end of June 2015.

Globe Telecom’s principal executive office is located at The Globe Tower, 32nd Street corner 7th Avenue, Bonifacio Global City, Taguig, Metropolitan Manila, Philippines.

History

In 1928, Congress passed Act No. 3495 granting the Robert Dollar Company (a corporation organized and existing under the laws of the State of California), a franchise to operate wireless long-distance message services in the Philippines. Subsequently, Congress passed Act No. 4150 in 1934 to transfer the franchise and privileges of the Robert Dollar Company to Globe Wireless Limited, which was incorporated in the Philippines on 15 January 1935.

Globe Wireless Limited was later renamed as Globe-Mackay Cable and Radio Corporation ("Globe-Mackay"). Through Republic Act ("RA") No. 4630 enacted in 1965 by Congress, its franchise was further expanded to allow it to operate international communications systems. Globe-Mackay was granted a new franchise in 1980 by Batasan Pambansa, under Batas Pambansa 95.

In 1974, Globe-Mackay sold 60% of its stock to Ayala Corporation, local investors and its employees. It offered its shares to the public on 11 August 1975.

In 1992, Globe-Mackay merged with Clavecilla Radio Corporation, a domestic telecommunications pioneer, to form GMCR, Inc. (“GMCR”). The merger gave GMCR the capability to provide all forms of telecommunications to address the international and domestic requirements of its customers. GMCR was subsequently renamed to Globe Telecom, Inc. ("Globe").

In 1993, Globe welcomed a new foreign partner, Singapore Telecom, Inc. (STI), a wholly owned subsidiary of Singapore Telecommunications Limited (“Singtel”), after Ayala and STI signed a Memorandum of Understanding.

In 2001, Globe acquired Isla Communications Company, Inc. (“Islacom”) which became its wholly owned subsidiary effective 27 June 2001. In 2003, the National Telecommunications Commission (“NTC”) granted Globe Telecom’s application to transfer its fixed line business assets and subscribers to Islacom, pursuant to its strategy to integrate all of its fixed line services under Islacom. Subsequently, Islacom was renamed as Innove Communications, Inc.

In 2004, Globe invested in G-Xchange, Inc. (“GXI”), a wholly owned subsidiary, to handle the mobile payment and remittance service marketed under the GCASH brand using Globe Telecom’s network as transport channel. GXI started commercial operations on 16 October 2004.

In November 2004, Globe and seven other leading Asia-Pacific mobile operators (“JV Partners”) signed an agreement (“JV agreement”) to form Bridge Alliance. The joint venture company operates through a Singapore-incorporated company, Bridge Mobile Pte. Limited (BMPL) which serves as a commercial vehicle for the JV partners to build and establish a regional mobile infrastructure and common service platform to deliver different regional mobile services to their subscribers. The Bridge Alliance currently has a combined customer base of over 250 million subscribers among its partners in India, Thailand, Hong Kong, South Korea, Macau, Philippines, Malaysia, Singapore, Australia, Taiwan and Indonesia.

In 2005, Innove was awarded by the National Telecommunications Commission (NTC) with a nationwide franchise for its fixed line business, allowing it to operate a Local Exchange Carrier service nationwide and expand its network coverage. In December 2005, the NTC approved Globe Telecom’s application for third generation (3G) radio frequency spectra to support the upgrade of its cellular mobile telephone system (“CMTS”) network to be able to provide 3G services. Globe was assigned with 10-Megahertz (MHz) of the 3G radio frequency spectrum.

On 19 May 2008, following the approval of the NTC, the subscribers contracts of Touch Mobile (TM) prepaid service were transferred from Innove to Globe, which now operates all wireless prepaid services using its integrated cellular networks.

In August 2008, and to further grow its mobile data segment, Globe acquired 100% ownership of Entertainment Gateway Group (“EGG”), a leading mobile content provide in the Philippines. EGG Group is engaged in the development and creation of wireless products and services accessible through telephones or other forms of communication devices. It also provides internet and mobile value added services, information technology and technical services including software development and related services. EGGC is registered with the Department of Transportation and Communication (DOTC) as a content provider. On May 15, 2014, EGGC changed its corporate name from Entertainment Gateway Group Corp. to Yondu, Inc. (Yondu).

On 30 October 2008, Globe, the Bank of the Philippine Islands and Ayala Corporation signed a memorandum of agreement to form a joint venture that would allow rural and low-income customers’ access to financial products and services. Last October 2009, the Bangko Sentral ng Pilipinas (BSP) approved the sale and transfer by BPI of its shares of stock in Pilipinas Savings Bank, Inc. (PSBI), formalizing the creation of the venture. Globe Telecom’s and BPI’s ownership stakes in PSBI is at 40% each, while AC’s shareholding is at 20%. The partners plan to transform PSBI (now called BPI Globe BanKO, Inc.) into the country’s first mobile microfinance bank. The bank’s initial focus will be on wholesale lending to other microfinance institutions but will eventually expand to include retail lending, deposit-taking, and micro-insurance. BPI Globe BanKO opened its first branch in Metro Manila in the first quarter of 2011 and now has 6 branches nationwide, over 2,000 partner outlets, 261,000 customers and over P2.4 billion in its wholesale loan portfolio.

On 25 November 2008, Globe formed GTI Business Holdings, Inc. (GTIBH) primarily to act as an investment company. On March 2012, Globe launched Kickstart Ventures, Inc. (Kickstart) to help, support and develop the dynamic and growing community of technopreneurs in the Philippines. Kickstart is a business incubator that is focused on providing aspiring technopreneurs with the efficient environment and the necessary mechanisms to start their own business. Since its launch, Kickstart has 10 companies it its portfolio covering the digital media and technology, and web/mobile platform space.

In May 2013, ABS-CBN Convergence, Inc. (“ABS-C”, formerly Multimedia Telephony, Inc.) announced the launch of its mobile brand, ABS-CBNmobile. The launch of the new mobile brand is being supported through a network sharing agreement with Globe, wherein the latter provides network capacity and coverage to ABS-C on a nationwide basis. ABS-C formally launched the brand in November 26, 2013.

On October 2013, following the court's approval of the Amended Rehabilitation Plan (jointly filed by Globe and BayanTel in May 2013), Globe acquired a 38% interest in BayanTel by converting BayanTel's unsustainable debt into common shares. This follows Globe Telecom’s successful tender offer for close to 97% of BayanTel's outstanding indebtedness as of December 2012. As part of the amended rehab plan and pending regulatory approvals, Globe would further convert a portion of its sustainable debt into common shares of BayanTel, bringing up its stake to around 56%. On October 2014, Globe Telecom received a copy of the temporary restraining order (TRO) issued by the Court of Appeals stopping the National Telecommunications Commission’s (NTC) proceedings in connection with the bid of Globe Telecom Inc. to take over Bayan Telecommunications Inc. (BayanTel). Despite the lapse of the Temporary Restraining Order (TRO) last December 9, 2014, the Court of Appeals has advised the NTC to refrain from conducting any proceedings in connection with the bid of Globe assume majority control of BayanTel.

On June 3, 2014, Globe signed an agreement with Azalea Technology, Inc. and SCS Computer Systems, acquiring the entire ownership stake in Asticom. Asticom, a systems integrator and information technology services provider to domestic and international markets, is 49% owned by Azalea, a 100%-owned subsidiary of Ayala Corporation and 51% owned by SCS Computer Systems, a subsidiary of Singapore Telecom.

On June 30, 2015, Globe incorporated Global Capital Venture Holdings, Inc., a wholly owned subsidiary organized under the laws of the Philippines and formed for the purpose of venturing into strategic non-core business.

On August 27, 2015, Globe Telecom, Inc. (Globe), Ayala Corporation (AC) and Bank of the Philippine Islands (BPI) signed an agreement to turn over full ownership of BPI Globe BanKO (BanKO) to BPI, one of the majority owners of the joint venture.

Ownership

The following are the major stockholders of Globe Telecom as of 30 June 2015:^[2]

• Ayala Corporation: 13.85% (with common shares of 40,351,591)
• SingTel: 21.51% (with common shares of 62,646,487)
• Asiacom: 54.43% (With preferred shares of 158,515,016)
• Directors, Officers, ESOP: 0.07% (With common shares of 205,027; preferred shares of 5)
• Public Stock : 10.14% (With common shares of 29,537,111)

Business segment

Mobile business

Globe provides digital mobile communication services nationwide using a fully digital network based on the Global System for Mobile Communication (GSM) technology. It provides voice, content, data and value-added services to its mobile customers through three major brands: Globe Postpaid, Globe Prepaid and TM; while catering the enterprise and MSME clients through Globe Business and Globe myBusiness.

Globe Postpaid includes all postpaid plans such as regular G-Plans and consumable G-Flex Plans, Load Allowance Plans, Load Tipid Plans and Platinum Plans (for the high-end market). In 2010, the company introduced the MY SUPERPLAN and MY FULLY LOADED PLAN which allow subscribers to personalize their plans, choose and combine various unlimited call, text and web browsing service options.

Globe Prepaid and TM are the prepaid brands of Globe. Globe Prepaid is focused on the mainstream market while TM caters to the value-conscious segment of the market.

• Core services: mobile voice and mobile SMS

Globe Telecom’s voice services include local, national and international long distance call services. It has one of the most extensive local calling options designed for multiple calling profiles. In addition to its standard, pay-per-use rates, subscribers can choose from bulk and unlimited voice offerings for all-day or off-peak use, and in several denominations to suit different budgets.

Globe Telecom’s SMS service includes local and international SMS offerings. Globe also offers various bucket and unlimited SMS packages to cater to the different needs and lifestyles of its postpaid and prepaid subscribers.

• Mobile data and value-added service

Globe Telecom’s mobile browsing services allow subscribers to access the internet using their internet capable handsets, devices or laptops with USB modems. Data access can be made using various technologies including LTE, HSPA+, 3G with HSDPA, EDGE and GPRS.

Globe Telecom’s Value-Added Services offers downloadable content covering multiple topics including news, information, and entertainment through its web portal. Subscribers can purchase or download music, movie pictures and wallpapers, games, mobile advertising, applications or watch clips of TV shows and documentaries as well as participate in interactive TV, do mobile chat, and play games, among others. Additionally, Globe subscribers can send and receive Multimedia Messaging Service (MMS) pictures and video, or do local and international 3G video calling.

• Content partnerships

Globe partners with global content providers such as Google, Facebook, Viber, Spotify, NBA, HOOQ, WhatsApp and Disney.

• International

Through its Globe Kababayan program, Globe provides international call and text services. This includes prepaid and reloadable call cards and electronic PINs available in popular OFW destinations worldwide.

Fixed line and broadband business

Globe offers fixed line communications services, wired and wireless broadband access, and end-to-end connectivity customized for consumers and businesses.

• Fixed line voice

Globe’s fixed line voice services include local, national and international long distance calling services in postpaid and prepaid packages through its Globelines brand.

• Fixed line data

Fixed line data services can be customized. Globe Telecom’s product offerings include international and domestic leased line services, wholesale and corporate internet access, data center services and other connectivity services. Domestic data services include data center services such as business continuity and data recovery services, 24x7 monitoring and management, dedicated server hosting, maintenance for application-hosting, managed space and carrier-class facilities for colocation requirements and dedicated hardware from leading partner vendors for off-site deployment.

Other services combine voice, broadband and video offerings designed to address specific connectivity requirements. These include Broadband Internet Zones (BIZ) for broadband-to-room internet access for hotels, and Internet Exchange (GiX) services.

In September 2012, the company announced its Long-Term Evolution (LTE) broadband service with the Tattoo Black Postpaid Plans. The nomadic broadband plans are equipped with an LTE dongle and LTE Superstick that deliver browsing speeds of up to 42 Mbit/s.

Mobile commerce

In addition to digital wireless communications, Globe also offers mobile banking and mobile commerce under the GCash brand.

Loyalty and rewards program

Globe has a loyalty and rewards program called My Rewards, My Globe for Globe Prepaid subscribers, TM Astig Rewards for TM subscribers and Tattoo+ Rewards for Tattoo Broadband subscribers. Globe Postpaid subscribers can earn points based on their monthly billed amounts in excess of their Monthly Subscription Fee. Subscribers have the option to redeem rewards instantly, or accumulate points to avail of higher value rewards. Redeemed points in the form of telecom services is netted out against revenues whereas points redeemed in the form of non-telco services such as gift certificates and other products are reflected as marketing expense. At the end of each period, Globe estimates and records the amount of probable future liability for unredeemed points.

In 2014, Globe Postpaid launched the Globe Blue or Platinum Rewards Cards. The new cards can also work as a GCash MasterCard which can be used to shop anywhere within the Philippines and even abroad.

Sales and distribution

Globe has various sales and distribution channels to address the diverse needs of its subscribers.

• Independent dealers

Globe utilizes a number of independent dealers throughout the Philippines to sell and distribute its prepaid wireless services. This includes major distributors of wireless phone handsets who usually have their own retail networks, direct sales force, and sub-dealers. Dealers are compensated based on the type, volume and value of reload made in a given period. This takes the form of fixed discounts for prepaid airtime cards and SIM packs, and discounted selling price for phonekits. Additionally, Globe also relies on its distribution nationwide who offer prepaid reloading services to Globe, TM, and Tattoo subscribers. A consumer-to-consumer top-up facility, Share-A-Load, is also available to enable subscribers to share prepaid load credits via SMS. Globe Telecom’s AutoLoad Max and Share-A-Load services are also available in selected Overseas Filipino Worker hubs all over the world.

• Globe Stores

As of December 31, 2014, the company has a total of 211 Globe Stores all over the country where customers are able to inquire and subscribe to wireless, broadband and fixed line services, reload prepaid credits, make GCASH transactions, purchase handsets and accessories, request for handset repairs, try out communications devices, and pay bills. The Globe Stores are also registered with the Bangko Sentral ng Pilipinas as remittance outlets.

In the same year, Globe simultaneously unveiled its Generation 3 flagship stores in SM North EDSA, Quezon City, Manila and in Limketkai Mall, Cagayan de Oro. Designed by Tim Kobe, the founder and CEO of Eight, Inc. and designer of Apple Stores, the Globe Gen3 stores features reconfigurable and interactive elements.

To cater to the needs of the 50,000 OFW in Italy, GLOBE has two international Globe stores located in Milan and Rome as of 2014.

• Customer facing unit

Globe is organized along three key customer facing units (CFUs) tasked to focus on the integrated mobile and fixed line needs of specific market segments. The company has a Consumer CFU with dedicated marketing and sales groups to address the needs of individual retail customers, and a Business CFU (Globe Business) focused on the needs of big and small businesses.

• Others

Globe also distributes its prepaid products SIM packs, prepaid call cards and credits through consumer distribution channels such as convenience stores, gas stations, drugstores and bookstores. Lower denomination IDD prepaid loads are also available in public utility vehicles, street vendors, and selected restaurants and retailers nationwide via the IDD Tingi load, an international voice scratch card in affordable denominations.

Competition

The Philippine mobile market has expanded to a total industry SIM base of 114 million. But despite an industry penetration rate of over 110% as of December 31, 2014, the market is continuously expanding due to the rise in the demand for more non-traditional services especially in the form of mobile internet browsing. With the growing penchant of Filipinos for smartphones, the mobile browsing business in the Philippines presents more opportunities for revenue growth. Aside from the possible area of growth in the industry through the switch of prepaid subscribers to postpaid, mobile data usage of both prepaid and postpaid subscribers continues to be a promising market that is to be developed and penetrated in the coming years. As of 2014, approximately 96% of industry subscribers remain prepaid, albeit significant growth in the postpaid segment over the last three years.

The Philippine government liberalized the communications industry in 1993, after a framework was developed to promote competition in the industry and accelerate the development of the telecommunications market. Ten (10) operators were granted licenses to provide CMTS services – Globe, Innove (previously Isla Communications, Inc. or “Islacom”), Bayan Telecommunications, Inc. (“BayanTel”), Connectivity Unlimited Resources Enterprises (“CURE”), Digitel Telecommunications Philippines, Inc. (“Digitel”), Express Telecom (“Extelcom”), MultiMedia Telephony, Inc., Next Mobile (“NEXTEL”), Pilipino Telephone Corporation (“Piltel”) and Smart Communications, Inc. (“Smart”). Nine of the ten operators continued on to operate commercially except for BayanTel, which have yet to roll out their CMTS services commercially.

When Sun Cellular, Digitel’s mobile brand, entered the market in 2003, it introduced to the market value-based unlimited call and text propositions, allowing it to build subscriber scale over time. With the market’s preference for these value-based unlimited and bulk call and text services, Globe and Smart responded by creating a new set of value propositions for their subscribers. Today, with the high level of mobile penetration, driven in part by the prevalence of multi-SIMming (i.e., individuals having two SIMs), and the continued shift of consumer preferences to unlimited and bulk offers, the competition in the mobile market remains intense, albeit in a more rational environment.

Today, only the PLDT Group and the Globe Group have built significant bases of mobile subscribers.

Partnerships

National Basketball Association

On November 7, 2014, Globe Telecom has entered a multi-year partnership with the National Basketball Association (NBA), the pre-eminent men's professional basketball league in North America, and is widely considered to be the premier men's professional basketball league in the world. The NBA and Globe will create exciting NBA-related promotions and premiums and jointly develop new and unique product offerings for the telco's over 45 million mobile and broadband customers. These will include the introduction of NBA League Pass offers including day passes, which will be exclusive to Globe subscribers. Globe will also showcase additional NBA video content through its new PisoMall video platform, enabling Filipino fans to interact with the NBA in new and exciting ways. PisoMall is available exclusively for all Globe and TM customers, and has been optimized for both feature phones and smartphones alike.^[3]

Spotify

On April 8, 2014, Globe Telecom signed with Spotify, a Swedish commercial music streaming, podcast and video service that provides digital rights management-restricted^[4] content from record labels and media companies.^[5] It is available in most of the Americas, Western Europe and Australasia.^[6] Music can be browsed or searched by artist, album, genre, playlist, or record label.

Viber

Globe Telecom seals an exclusive partnership with global technology firm Viber to offer its subscribers call, text, and mobile internet services bundled with Viber. In addition to instant messaging, users can exchange images, video and audio media messages. The client software is available for Apple iOS, Android, BlackBerry OS, Nokia Series 40, Symbian, Bada, Windows Phone, macOS, and Microsoft Windows.^[7] A 64-bit Linux version is available in both .deb (Debian & Ubuntu) and .rpm (Fedora & openSUSE) package formats.^[8] Viber works on both 3G/4G and Wi-Fi networks. It first requires installation on a phone in order to work on a desktop operating system environment.^[9] Viber has over 100 million monthly active users from its 280 million global registered users.^[10]

Disney

Globe Telecom once again enhances the Filipino digital lifestyle experience with a comprehensive and multi-year collaboration with The Walt Disney Company Southeast Asia. This collaboration will give Filipino customers access to video-on-demand, interactive content, promotions and other related services across multiple devices and affirms the relationship of Globe with Disney whose brands include Disney, Pixar, Marvel, Star Wars and global leader in short-form video, Maker Studios. Also includes WATCH Disney Channel apps, entertainment apps which provide access to Disney Channel, Disney Junior and Disney XD. Kids and Family can enjoy all the 3 Disney Channels via this digital destination at selected Disney Channel retailers.

Netflix

Globe Telecom began its partnership with Netflix, one of the world's largest streaming services to offer thousands of TV shows and movies along with original webseries.

Subsidiaries

• Innove Communications, Inc. (Innove.) - 100% ownership
• Bethlehem Holdings, Inc. - 100% ownership
• Kickstart Ventures, Inc. (Kickstart)- 100% ownership
  • Flipside Publishing Services, Inc. (FPSI) - 40% ownership
• Yondu (formerly known as Entertainment Gateway Group Corp.) - 49% ownership
• Mynt (Globe Fintech Innovations, Inc.)- 100% ownership
• GTI Business Holdings (GTI) - 100% ownership
• Asticom Technology, Inc. – 100% ownership

Joint ventures

• ABS-CBN Convergence (32%)^[11]
• Bridge Mobile - 10% ownership

Affiliate

• Bayan Telecommunications Inc. (BTI) – 98.57% ownership
• AF Payments, Inc. – 20% ownership

See also

• Ayala Corporation
• TM

References

External links

Wikimedia Commons has media related to Globe Telecom.

• Official website