Globe Telecom plans to lower Capex in 2013

Telecom Lead Asia: Globe Telecom is planning to lower its
Capex in 2013 as compared with its target for the current year.


Philippine’s second largest telecommunications company is
allocating at least $400 million for capital expenditure in 2013, or just half
of this year’s investment target.


Recently, Globe Telecom CFO Albert de Larrazabal
said that the network modernization and IT transformation program represents a
huge investment commitment – about $790 million in total Capex spending over
the next five years with a total of about $640 million to be spent this year
and in 2013.


On Monday, Larrazabal said the telecom operator will need
around $400 million in capital expenditure in 2013.  The amount will
include a $110-million allocation for the
network modernization and IT transformation programs.


Larrazabal said to fund the capital expenditure
requirements, Globe Telecom will first scan the market to determine whether it
should do a bilateral agreement with the banks, go for syndicated loans, or
apply for more commercial paper issuance.


Globe Telecom obtained loans from China Bank, Banco de
Oro and Rizal Commercial Banking Corp. and conducted a P10-billion bond
offering to fund this year’s capital expenditure.


Globe’s capital expenditure reached P11.7 billion, or
about $273 million, in the first half of 2012, as the network modernization and
IT infrastructure programs went into full swing.


The company expects second-half spending to bring the
full-year capital expenditure to around $750 million to $800 million.


The company said it earmarked $530 million for network
and IT modernization, and about $220 million to $270 million for various
business-as-usual activities, such as investments in submarine cable and fixed
line data, and broadband capacity upgrades.


In the last six months, we have progressively transformed
almost 50 percent of our network, with improvements in service quality already
being felt by customers in Davao, Cebu,  South Luzon, and some parts of
Metro Manila.


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