Globe Announces First Quarter 2012 Results

Strong start to the year with consolidated service revenues at all-time high; Mobile and Broadband revenues up QoQ & YoY; Mobile Subscribers now at over 31.0 Million; Broadband customers at almost 1.5 Million. End Quote

(1888PressRelease) May 09, 2012 - Globe Telecom, Inc. started the year on a high note with first quarter consolidated service revenues soaring to an all-time high of P20.2 billion, up 6% against last year's level of P19.1 billion. Mobile revenues increased by 6% year-on-year from P15.6 billion to about P16.6 billion this period despite intense competition and continued price pressures. Broadband revenues were also up 13% year-on-year from P1.8 billion to P2.0 billion in the first quarter amid the strong take-up of Tattoo-On-The-Go offerings.

Globe Postpaid kept its growth momentum going as the customizable plans continue to attract new and old subscribers, alongside the success of the Apple™ iPhone 4S launch. Revenues from Globe Postpaid outperformed past year's level, improving a robust 17% year-on-year, while Globe Prepaid and TM combined delivered a 2% revenue growth driven by the new brand campaigns and a boost in service offerings. Cumulative mobile subscriber base as of end-March stood over 31.0 million, up 14% from the same period last year.

Tattoo-On-The-Go subscriptions also grew with sustained demand for internet connectivity and continued popularity of social networking sites. The introduction of new prepaid sticks, such as Tattoo 4G Flash and Tattoo 3G Sonic, that offer different download speeds at different price points also helped drive the broadband business. Total subscriber base reached almost 1.5 million by end of March, 26% above last year with wireless customers comprising about 80% of the total from 78% a year ago.

Against the seasonally strong fourth quarter, this period's service revenues were up by 1% with strong results from Globe Postpaid coupled with the sustained expansion of the broadband and fixed line data segments.

Globe re-invested part of its revenue gains in additional marketing and subsidy spend in order to acquire new subscribers, re-contract open postpaid customers, and defend its market position through various brand-building initiatives. This period's results also reflect continued investments in Globe's network infrastructure, including charges related to Globe's massive network modernization and IT transformation programs. Thus, consolidated EBITDA was down 5% year-on-year from P9.1 billion to P8.7 billion with operating expenses and subsidy growing 16% to P11.6 billion in the first quarter. Net income after tax stood at P2.7 billion in the first quarter, 10% below previous year's level of about P3.0 billion. Meanwhile, core net income, which excludes foreign exchange and mark-to-market gains and losses, was at P2.7 billion, and was 7% below last year.

Against last quarter, however, the sustained top-line growth alongside a 4% decline in operating expenses and subsidy resulted to a 7% growth in consolidated EBITDA. Depreciation was also down 16% as a result of certain assets being fully depreciated as of the end of 2011, and also since last quarter's results include depreciation charges related to a pilot run of the network change-out in Davao City. Thus, net income and core net income after tax were up 47% and 48%, respectively. Excluding all transformation-related operating expenses and depreciation charges, the improvement in this period's core net income compared to last quarter would have been at a still robust 28%.

"We are pleased with our results this period, and the way we have built on and sustained the momentum of the last six quarters. Despite intense competition, we continue to make gains in our mobile and broadband businesses. This reinforces our commitment to our transformation agenda to better serve our customers," Ernest L. Cu, President and CEO of Globe Telecom, Inc. said. "The industry is entering a new phase, and we see 2012 as a year of investments in our customers, in our networks, and in our systems and processes. We expect to emerge from this investment period with significantly improved capabilities, well-positioned to grow and deliver enhanced value to all our stakeholders," added Mr. Cu.

In the first quarter, Globe stepped up its efforts for Globe Prepaid as a follow through to its refreshed brand campaign. In a bid to keep its loyal prepaid subscribers and draw new customers with its attractive and innovative service offerings, the Company introduced a self-service menu that provides customers an easy way to subscribe to promos and avail of other Globe services. Subscribers simply have to dial "*143#" to get a list of Globe's latest offerings and choose which service they wish to avail of. To complement this added feature for Globe subscribers, the Company launched its Choose Your Promo offerings which introduced 4 new services from Globe Prepaid led by All Unli Trio which is the ultimate unlimited service that provides unlimited on-net calls and texts and unlimited mobile browsing for as low as P60 a day. Globe also launched All Net Combo which provides unlimited all-network SMS and 10 minutes of all-network calls, 50 minutes of on-net calls and additional 5 MB of consumable mobile browsing. Subscription to All Net Combo is very affordable at P30 a day. The Choose Your Promo package also includes the Immortal offers: Immortal Trio and Immortal Txt. Immortal Trio provides 50 on-net SMS plus 5 all-network texts and 5 minutes of on-net calls for only P25, while Immortal Txt provides 25 on-net SMS and 5 all-network SMS for only P15. Similar to the Immortal services before, the SMS and voice allocations from the promos do not expire for as long as the subscriber maintains a P5 load balance. Completing the Choose Your Promo suite is Unli Tingi, which offers unlimited all network texts, unlimited on-net calls and unlimited mobile browsing valid for 1 hour for only P5.

TM, the Company's brand for the value-conscious segments, also started off the year with a refreshed campaign, "Mas Buo Ang Araw Ko," which highlights the key service features of the brand such as the rewards obtained every time a subscriber re-loads, the various unlimited on-net and all-network offers, the low-denominated service offers, and recently, the launch of mobile browsing for TM. In addition, and aligned with the customizable offers across all brands and products of the Company, TM lets subscribers choose the free call and text promos that come with every purchase of a TM SIM.

Globe boosted its mobile data services with the launch of SuperFB10 for Globe Prepaid subscribers who wish to get all-day unlimited access on Facebook for an affordable subscription fee of P10. The Company also expanded its BlackBerry® services to include BlackBerry® Chat, which provides Globe Prepaid subscribers with unlimited BlackBerry® Messenger and free 100 SMS to Globe and TM subscribers. This latest offering for Globe Prepaid is valid for 1 day for just P15. For Globe Postpaid subscribers, BlackBerry® Chat provides unlimited BlackBerry® Messenger and 200 on-net SMS for only P99 valid for 30 days.

For the broadband business, Globe launched a lifestyle website, LiveTattoo.ph, that features the coolest and latest offers, downloads and subscriptions from over 50 partner websites and establishments such as games, music, tools and utilities, magazine and newspaper subscriptions, free surfing, discounts and added values on purchases. Coupled with the launch of the website was the debut of Tattoo Prepaid Lifestyle Sticks. Priced at P1,295, Globe's newest line of broadband sticks offer speeds of up to 7.2Mbps powered by Tattoo's 4G network and a number of other perks. Each variant in the product suite is especially designed with the subscriber's passions in mind. The Tattoo Explorer is armed with free access to food and travel sites for a year, free online magazine subscriptions and airline ticket discounts. The Tattoo Player comes with free one year access to movie and gaming sites, free music downloads and credits to games and discounts to movie tickets. Lastly, the Tattoo Stylista gives its owner unlimited access to lifestyle sites and discounts in online shopping sites and fashion and beauty establishments.

For its international services, Globe has recently partnered with Vonage, a US-based communications provider which specializes in broadband, VOIP and international long distance services, to introduce new products and services to serve the needs of Filipinos based in the US and keep them in touch with their families and friends in the Philippines. On the other hand, for Filipinos who wish to connect with their loved ones in Japan and vice-versa without incurring long distance charges, Globe has launched its Tokyo03 service through a partnership with Japan-based IPS, Inc. Tokyo03 is a mobile application that assigns a virtual Globe number to subscribers based in the Philippines and enables them to call their contacts in Japan and be charged at local rates, while Japan-based Filipinos who subscribe to Tokyo03 are charged data usage fees for making calls to the Philippines. Tokyo03 is currently available for Apple iOS-based devices such as the iPhone 4S.

The first quarter of the year also marked another milestone for Globe with the launch of Kickstart Ventures, Inc., an incubator that aims to help startups launch their own businesses. Kickstart offers the perfect venue for like-minded individuals and organizations by providing the necessary funding, mentorship and education to technopreneurs in the country. With Kickstart, Globe aims to develop and nurture the mobile ecosystem, by providing a launchpad and the resources for the country's promising talents.

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