Globe Telecom

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Globe Telecom Inc.
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]
₱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's main competitors in the fixed-line telephone market are PLDT and Digitel. Bayantel used to be one of its competitors prior to its acquisition by Globe. In the mobile phone market, its main competitors are the Smart and Talk N Text brands of Smart Communications and Sun Cellular, a wholly owned subsidiary of PLDT.

History[edit]

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.

Globe Telecom Logo (1991–2007)
Globe Telecom Logo (2007–2013)

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.

In Q3 2016, Globe Telecom dislodged Smart Communications as the largest telecommunications company it terms of subscriber base with 65.8 million subscribers, 200,000 more than its rival.[3]

Ownership[edit]

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)

Subsidiaries[edit]

  • Innove Communications, Inc. (Innove.) - 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[edit]

Affiliate[edit]

See also[edit]

References[edit]

  1. ^ a b Globe Press Room, Globe Telecom 2013 core net profit up 13%; revenues reach new record
  2. ^ a b "Ownership Structure". Globe Telecom. 
  3. ^ https://techthetruth.wordpress.com/2016/12/31/globe-telecom-overtakes-rival-smart-communications-in-subscriber-base-by-a-slim-margin/
  4. ^ P. Valdueza, Rolando (April 15, 2016). (ABS-CBN) SEC FORM 17-A (Report). Philippine Stock Exchange. p. 11. Retrieved August 15, 2016. 

External links[edit]