GLOBE Telecom on Wednesday launched a $700-million mobile-network modernization program at Malacañang which President Aquino promptly described as a rightful bet on a country like the Philippines that has become a “virtual gold mine for the telecommunications sector.”
Mr. Aquino witnessed the ceremonial signing of the contracts between Globe and Huawei on the project, and another between Globe and Alcatel-Lucent, to manage the project, at Malacanang’s Rizal Hall.
“We would like to thank Globe for this massive investment, for placing a bet on our country’s future that enables us to address the problems really in a much quicker pace to the ultimate benefit of our people,” he said.
In an interview with reporters after the event, Globe chairman Jaime Augusto Zobel de Ayala said, “We are here today to show our commitment to the economy by continuing to invest heavily in the infrastructure that the country needs.”
Ernest Cu, Globe president and chief executive officer, said the company’s infrastructure upgrade “allows Globe to compete harder and more aggressively in the future, because our operating costs will be lower.”
Cu said Globe expects “significant savings” in operating expenses on a year-on-year basis, once the modernization is complete.
“The Philippines is in a very highly competitive climate when it comes to telco services, as you know. And so we fully expect that level of competition will continue in 2012, because we have two strong companies competing with each other—the incumbent, and of course, the challenger Globe Telecom,” he said.
He said, “As more and more smart phones come into the country, the profile of use of a subscriber would change from just voice/calling, SMS, to include a lot of browsing on the Internet,” which is why the Globe network “is being built the way it is, this is made in anticipation of the change in habit of the Filipino mobile phone user.”
When asked, Cu said Globe expects to “sustain the momentum” it has enjoyed in the past five quarters, through this year.
“We just expect that same momentum in terms of market share gains, in terms of revenue gains, to continue,” he said.
He said Globe grew to 30 million subscribers in 2011, and will grow even more this year, with the trend toward postpaid subscribers’ growth “picking up.”
“Globe’s subscriber base 18 to 20 months ago, was just around 700,000 to 750,000; today it stands at 1.5 million. So there is maybe a shifting sentiment as far as the public is concerned. They want to move into more post-paid plans now, it’s quite an interesting phenomenon that we’re seeing in terms of this high-end prepaid consumers now opting for a committed plan, Cu said.
Alcatel-Lucent, the project manager and integrator of Globe Telecom Inc.’s $700-million network modernization program, on Wednesday said it wants to take part in government-initiated projects in the Philippines.
“We are talking to a number of government departments and fully expect that we will participate in some of those projects,” said Alcatel-Lucent President Rajeev Singh-Molares in discussions with the media on Wednesday morning.
Molares is in the country for the contract signing with Globe officials held in Malacañang.
Molares refused to say which government agencies Alcatel-Lucent is in contact with.
“At this stage, we’re talking, and it’s best for me not to say any specifics on what we are doing…We are aggressive players. We have many ideas that we’ve done in many parts of the world.”
Alcatel-Lucent is involved in Australia’s national broadband network project. In the country, its largest project is with the Ayala-controlled cellular firm.
Morales said that if ever Alcatel-Lucent would seal a deal with the Philippine government it would not be as big as the contract it inked with the cellular firm.
Globe is undertaking an ambitious network modernization program, touted as the most significant investment it made in the last two decades that costs $790 million. Of the amount, $530 million will be spent in 2012 and $110 million in 2013.
The network modernization, which is expected to be finished after five years, includes an all-Internet protocol infrastructure, pervasive 3G coverage, double fiber optics capacity, 4G and long-term evolution readiness, and overall quality and resiliency.
The cellular firm has tapped Huawei as lead partner and end-to-end network solutions provider, while Alcatel-Lucent was assigned as project manager.
