STRATEGY ANALYSIS

BUILD THE NETWORK OF CHOICE

“To be an admired nation by providing mobile services to about 95% of cities and municipalities
in the Philippines”
 Growing demand for internet access and connectivity
Globe has been pouring in massive investments to create a strong data network in
the country. The company spends more than one-third of its top-line revenues every year
– one of the highest reinvestment ratios among telcos in the world – to improve internet
services and fulfill its commitment to provide two million homes with at least 10 Mbps
connectivity by 2020. The Philippines is facing a severe lack of cell sites. To date, around
71 million active internet users in the Philippines are sharing 17,850 cell sites. Thus, the
Philippines is forced to serve an average of 3,753 people per cell site. This shows a stark
difference when compared to some of its neighboring countries like China, where only 384
active internet users are sharing one cell site. To cope with the increasing mobile data traffic
and smartphone sales, the Philippines has to build more and more cell sites. The
disproportionate number of cell sites versus internet users in the Philippines is mainly
attributed to permit bottlenecks. At least 25 permits are needed to put up one cell site. The
process usually takes at least eight months, barring difficulties in securing permits from
various local government units, homeowner associations, and other stakeholders. In
addition to the bureaucratic red tape, lack of clarity on current laws and regulations were
some of the other challenges in deploying ICT and broadband infrastructure in the country.
To address these challenges, Globe initiated the following activities:
a) Forging Public and Private Partnerships: Globe worked with the
Department of Information and Communications Technology (DICT) and the
Department of Trade and Industry (DTI) on improving the ease of doing
business in the country (Republic Act 11032). The telco is pushing for the
implementation of an open access model that will open the telco industry to
local and foreign investors, allowing sharing of cell towers and IT
infrastructure. In the National Capital Region, Globe entered into a
groundbreaking agreement with the Metro Manila Development Authority
(MMDA) to speed up the deployment of over 120 cell sites in major
thoroughfares in Metro Manila, including EDSA, Roxas Boulevard, C5, and
Congressional Avenue. The company is also providing logistical support to
MMDA’s critical traffic management operations.
Through its subsidiary, Innove Communications Inc., Globe also worked
closely with the DICT to complete several connectivity platform projects.
Under the agreement, Innove has to deliver a total of 703 circuits over three
years, which started in 2016, to some underserved municipalities across the
country while the DICT has to ensure that Innove can secure building permits
 from the respective local government units. As of end 2018, Innove was able to
deliver 576 of the 703 committed circuits, which will route data from one node
to another. These circuits will serve as a backbone and distribution hubs for
internet connectivity in municipalities across the country.
b) Reaching Out to the Entire Archipelago: Extending its reach to the remotest
areas of the archipelago, Globe activated its 1800 MHz and 700 MHz frequency
in the town of Bongao, Tawi-Tawi, enabling residents in the southern part of
Mindanao to have access to faster mobile internet. A data center in Davao was
set up to provide resiliency for the National Capital Region and the Visayas. As
of end-2018, Globe has already completed the upgrading of 880 cell sites in
Mindanao. Globe also modernized 1,103 sites, and built 44 new sites in the
Philippines’ south. A total of 56 new sites are also ongoing completion. Globe
increased the LTE coverage in Mindanao, which has been growing at an annual
rate of 32%. Through GoWiFi, the public WiFi hotspot service of Globe, the
company strengthened its “win-win” relationships with several businesses
across different industries. By making the availability of internet connection in
the public sphere a mutually beneficial endeavor, WiFi service providers and
business owners in more than 1,500 locations nationwide, including major
malls, convenience stores, coffee shops, supermarkets, transportation hubs,
hospitals and airports, enable Globe to redefine the customer experience in
public WiFi usage. The company also partnered with Pilipinas Shell to enable
the establishment of GoWiFi hotspots in select Shell service stations, providing
its customers with connectivity.
c) Promoting Inclusivity in its Network: Globe partnered with Gawad Kalinga,
a non-profit, nongovernment organization that promotes poverty alleviation and
nation building, to roll out 2G cellular service in far-flung barangays that have
zero or limited cellular connectivity. This is through Konekt Barangay, an
innovative microsite solution that provides signal coverage within a 300- to
500-meter radius and covers about 500 subscribers per microsite. In October
2018, Globe rolled out Konekt in unserved rural barangays of Loreto, Agusan
Del Sur, a landlocked province in the southern Philippines region of Mindanao.
d) Connecting the Philippines with the World: Globe inched closer to achieving
first-world connectivity for the country when it commercially launched the
US$250-million Southeast Asia-United States (SEA-US) submarine cable
system. The cable system is connected to the Globe cable landing station in
barangay Talomo, Davao City which also houses the Power Feed Equipment.
Outside of Luzon, this undersea cable served as the first direct connection of
Globe to the United States via Guam, Hawaii, and California, offering faster
transmission of data to the U.S. The facility also completely bypasses the
Taiwan earthquake zone to ensure continuity of service and greater resiliency.
This is expected to prevent a repeat of the 2006 incident where major
 international cables were destroyed because of the Taiwan earthquake, resulting
in the isolation of the Philippines for a few days in terms of internet
connectivity. Globe also extended its internet reach in Europe by connecting its
network with Deutscher Commercial Internet Exchange (DE-CIX), the world’s
largest internet exchange point (IXP) by size. This further boosted its existing
infrastructure and enabled users direct access to European content. DE-CIX
serves over 1,500 network operators, internet service providers (ISPs), and
content providers from more than 100 countries with peering and
interconnection services at its 13 locations in India, the Middle East, Europe,
and North America. Globe currently has the most number of connections to
IXPs among Philippines telcos with 41 as of 2018, based on information from
Hurricane Electric. This reflects the Philippines’ presence in the global IP
landscape.

 Surging data traffic

Globe continued to dominate the market share in mobile. In 2018, its data traffic
grew by 59% in 2018 to 956 petabytes, compared to the same period in 2017. Its customer
data throughput increased by 25% during the period. To meet growing demand for data,
Globe continued its 4G LTE cell site deployment efforts, rolling out over 3,500 new LTE
base stations by end2018, which represents a 38% increase from the previous year. To
support the deployment, Globe allocated ₱43.5 billion in capital expenditures to widen its
4G/LTE data coverage, improve voice quality, and increase data speeds. The company’s
3G coverage increased to 90.29% of the population and 4G LTE coverage to 78.7%, all are
equipped with high speed transmission capability. Routine network quality tests confirm
that Globe leads in most quality indicators. Its international mobile operations now have
551 roaming partners in 177 destinations for 3G voice/data and 160 roaming partners in 64
destinations for LTE.