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.