Kristhel Sahagun SM End Term Assignment

A Strategic Management Paper
on
GLOBE TELECOM INC.

________________________________________________________________
Submitted to the faculty of the Graduate School of

St. Paul University Philippines
in partial fulfillment of the requirements for the Degree of Masters in Business Administration
By:
Kristhel P. Sahagun
TABLE OF CONTENTS
Page Number
Abstract 1
Chapter I: Introduction 2
Chapter II: Vision, Mission, Goals and Objectives
Vision Statement 4
Mission Statement and Core Values 5
Proposed Mission and Vision Statement 6
Chapter III: Environmental Analysis
Macro Trend Analysis (PESTEL Analysis)
Political and Legal Factors 8
Economic Factors 12
Social and Cultural Factors 18
Technological Factors 28
Environmental Factors 32
Industry Analysis (Porter’s Five Forces)
Industry Issues 33
Chapter IV: Capability analysis

Strategic Capabilities 39
SWOT Analysis 41
Chapter V: Proposed Strategies
Recommended Strategic Objectives 46
Recommended Strategies 48
Chapter VI: Strategy Evaluation 53
References 55
ABSTRACT
This paper presents strategic plan report for Globe Telecom Inc., which is one of the two biggest
telecommunication companies in the Philippines. This paper contains an evaluation of the
internal and business environment for Globe Telecom Inc. The report includes a critical
assessment of the strategic resources and an examination of the extent to which Globe Telecom
Inc. is strategically fit with its environment. The report also includes critical appraisal of the
strategic options available to improve the performance of Globe Telecom Inc. with a
justification. The key point of this report is on how to access strategies that can elevate its
performance.
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I. INTRODUCTION
Globe Telecoms is a major provider of telecommunication services in the

Philippines, it has a wide array of telecommunication products and services that it
offers to its customers. The company is also one of the pioneers, not just in the
Philippines but also worldwide, of cashless mobile payment and remittance services
via its GCash brand. This wide range of products and services being offered by the
company is supported by a workforce of around 8,000 employees not just in the
Philippines but also overseas, through regional overseas branches and global partners.
And also, to supplement this workforce, Globe Telecoms have over 1.1 Million
networks of different suppliers, retailers, distributors and business partners all over
the Philippines.
Globe Telecoms also operates one of the biggest and most technologically
advanced telecommunication networks in the Philippines, with services ranging from
the fixed line, wireless and the latest broadband network technologies. As of the latest
annual report of Globe Telecoms, they currently have over 94.2 million subscribers of
mobile products and services which is roughly around 86 percent of The Philippines
population, and over 2.0 million subscribers of broadband products and services and
also around 1.4 million subscribers of its fixed-line and landline services.
Globe is one of the largest and most profitable companies in the country, and has
been consistently recognized both locally and internationally for its corporate
governance practices. It is listed on the Philippine Stock Exchange under the ticker
symbol GLO and had a market capitalization of US$5.3 billion as of the end of
December 2019.
The Company’s principal shareholders are Ayala Corporation and Singapore

Telecom, both industry leaders in their respective countries. Aside from providing
financial support, this partnership has created various synergies and has enabled the
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sharing of best practices in the areas of purchasing, technical operations, and
marketing, among others.
Sustainability at Globe is anchored on The Globe Purpose, “In everything we do,

we treat people right to do a Globe of Good. As a purpose-led organization, the
Company aims to contribute to the UN Sustainable Development Goals by promoting
innovation and technology for greater social impact. Together with business growth,
Globe actively participate in nation-building through an engaged and empowered
workforce that strives to achieve inclusive and sustainable development for all. In
2019, Globe became a signatory to the United Nations Global Compact, committed to
implement universal sustainability principles.
Globe Bridging Communities (GlobeBridgeCom) is the corporate social

responsibility arm of the company, which leads various programs that promote
quality education, environmental conservation, social innovation, active citizenship
through volunteerism and responsible use of information and communications
technology to enrich the lives of our key stakeholders.
Globe Telecoms is also a recipient of various licenses and service authorizations

from the National Telecommunications Commission that adds to the assets and
goodwill accounts of the company’s balance sheets. Here are a few of the licenses the
company receives.
 License to offer and operate facsimile, other traditional voice and data services
and domestic line service using Very Small Aperture Terminal (VSAT)
technology.
 License for inter-exchange services.
 Certificate of Public Convenience and Necessity (CPCN) for the following:
i. International digital gateway facility (IGF) in Metro Manila.
ii. Nationwide digital cellular mobile telephone system under the GSM
standard (CMTSGSM).
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iii. Nationwide local exchange carrier (LEC) services after being granted a
provisional authority in June 2005.
iv. International cable landing stations located in Nasugbu, Batangas and
Ballesteros, Cagayan and Brgy. Talomo, Davao City.
II. Vision, Mission, Goals and Objectives
II.1 Vision statement:
“Globe Telecom Inc.: We see a Philippines where families' dreams come true,
businesses flourish, and the nation is admired”
Parameter Yes/No Evaluation

Does it clearly answer No Globe Telecom’s Vision statement is quite
the question: “What vague and vivid in a sense that they do not
do we want to say how they are going to make families’
become?” dreams come true. A visions statement should
be complete in its description and information
of what the company desires, and how it plans
to achieve its long term goals strategically
Is it concise enough Yes In a sense it is inspirational because it
yet inspirational? provides hope to every Filipino families’ that
Globe Telecoms will make their dreams come
true but it is not concise because the said
vision statement does not state how the
company will provide it to them.
Is it aspirational? Yes Globe Telecoms Vision statement states that
the company will make the current status quo
into something better.
Does it give clear No Globe Telecoms does not provide a detailed
indication as to when or even any kind of timeline in its vision
it should be attained statement.
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II.2 Mission Statement and Core Values
"We create wonderful experiences for people to have choices, overcome challenges,
and discover new ways to enjoy life."
CORE VALUES
The Globe Way

We treat people right to create a Globe of Good:
We put customers first.
We value people and together, we make a difference.
We act with integrity.
We care like an owner. We keep things simple.
We move fast. We are better every day.
Parameter Yes/No If yes, which part of the statement

1. Customers Yes People
2. Products or
services No N/A
3. Markets No N/A
4. Technology No N/A
5. Concern for
survival, growth,
profitability Yes We care like an owner
6. Philosophy Yes Our people makes the difference
To us, it’s be fast or be last
7. Self-concept Yes We put our customers first
We act with integrity
We care like an owner
We keep things simple
8. Concern for
employees No N/A
9. Concern for nation
building No N/A
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II.3 Proposed Mission and Vision Statement
Vision Statement:
“To be the best and most-trusted telecommunications company that the nation
ever had by providing the things that will make the Filipino families’ dreams come
true and business flourish through technology in the span of 5 years together with the
country’s progress.”
Parameter Yes/No Evaluation

Does it clearly answer Yes Globe Telecom’s new Vision statement now
the question: “What clearly states that the company wants to be
do we want to the best and most-trusted telecommunications
become?” company by being a vehicle to help Filipino
Families’ dreams come true and business
flourish through its core competency which is
technology
Is it concise enough Yes Globe Telecom’s new Vision statement now
yet inspirational? clearly states what kind of medium it will use
to be the best and most-trusted brand that
enhances people’s life which is technology.
Is it aspirational? Yes Globe Telecom’s new Vision statement now
states that it wants to help Filipino Families’
dreams come true and business flourish in
parallel with the improving business
environment of the country.
Does it give clear Yes Globe Telecom’s new Vision statement now
indication as to when has a timeframe which is 5 years which is also
it should be attained in parallel with the current high growth rate of
the country.
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Mission Statement:
“We will make our nation wonderful by providing to our customers advance
and reliable telecommunication technologies that can enhance their everyday lives
and at the same time create a culture of integrity, adaptability, and performance
based merit system like how a good employer should and care for the business just
like how an owner would.”
Parameter Yes/No If yes, which part of the statement

1. Customers Yes The nation
Advance and reliable telecommunication
2. Products or services Yes
technologies
3. Markets Yes Telecommunication industry
Advanced telecommunication
4. Technology Yes
technologies
5. Concern for survival,
Yes Care for the business like an owner would
growth, profitability
Culture of integrity, adaptability and
6. Philosophy Yes
performance based merit system.
Provider of advance telecommunication
7. Self-concept Yes
technologies
Culture of integrity
Culture of adaptability
Culture of thinking like an owner
8. Concern for employees Yes Performance based merit
9. Concern for nation Making the nation wonderful by providing
Yes
building advance telecommunication technologies
III. ENVIRONMENTAL ANALYSIS
III.1 MACRO TREND ANALYSIS (PESTEL ANALYSIS)
III.1.1 POLITICAL / LEGAL FACTORS
ONGOING SENATE AND NTC INQUIRY ON THE SLOW INTERNET

SPEED IN THE PHILIPPINES
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The Senate of the Philippines and the National Telecommunications
Commission (NTC) summoned the top telecommunication companies in the
Philippines to explain the slow internet connections in the country. The Senate
hearings, held last September 2014, wants to know the root cause as to why the
Philippines is lagging, in terms of internet speed, compared to its ASEAN neighbors.
On the other hand, the National Telecommunications Commission (NTC) also
summoned the top telecommunication companies to a public consultation last
October and November 2014 to explain the minimum speed of the respective
company’s broadband internet connections. Also, the NTC is pushing to make
broadband internet as a basic service, as it is currently just classified as a value added
service, in order for the NTC to regulate it as per the Public Telecommunications
Policy Act of 1995.
RELEVANCE TO THE ENTERPRISE
The current inquiries of the Senate of the Philippines and the National
Telecommunications Commission may add to the cost of doing business or cut the
revenues of the telecommunication industry players as penalties or additional taxes
and fees might be imposed on them.
On the other hand, the telecommunication industry players must not look at the
said inquiries in a negative way but look at them as an opportunity to show and
expose to the government, and even to the public, the various legal, administrative
and governmental challenges that they are facing that adds up to their cost of doing
business.
VARIOUS THREATS BY REBELS, TERRORIST AND VARIOUS

UNLAWFUL GROUPS
Due to the wide, scattered and sometimes remote locations of

telecommunication equipment and cellsites of telecommunication companies in the
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Philippines, they are prone to attacks from various rebels, terrorist and unlawful
groups which tend to extort and sometimes destroy the telecommunication player’s
equipment if they don’t pay up. This makes the telecommunication players in the
Philippines prone to risk that comes with political unrest most especially in remote
provinces in the country.
Various threats to telecommunication facilities around the Philippines by

unlawful people, rebels and terrorist groups can greatly increase the cost of doing
business for telecommunication players because of the destructions they might cause
to their telecommunication equipments most especially that the cost of the said
equipments are quite high.
RED TAPES AND EVER-CHANGING LOCAL GOVERNMENT LAWS
The telecommunication industry in the Philippines, most especially the top

players, are prone to risks from red tapes and various local government laws being
enacted by different municipalities in the Philippines against the telecommunication
players. The top telecommunication players voiced this concern during the senate
hearings against telecommunication players in the Philippines due to slow internet
speed last January 2015.
During the said hearings, one of the top management from Globe Telecoms
voiced this concern stating that the process of simply getting permits for erecting
towers alone takes too long. As per his statement, simply putting up a tower, not even
commissioning the equipments needed for a cellsite to work and use frequencies,
needed 10 permits before commencing the actual construction. This makes putting up
just one tower, with no working equipments, at least 6 months.
Also, another concern the top telecommunication players voiced out was the
different fees local government charge the telecommunication players for doing
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business in their respective areas. A perfect example of this is in Santiago City, in
Isabela wherein the city government orders the telecommunication companies doing
business in the said city to pay Php200,000 per year for tower fees.
This is a negative sign for the telecommunication industry in the Philippines as

the various, ever-changing local government fees and procedures imposed to them
might add up to cost of doing business and can also sometimes drag into a lengthy
legal battle that will not only add to cost of doing business, but also to the quality of
the products and services they provide to their customers.
NTC MEMORANDUM CIRCULAR NO. 02-10-2011
The National Telecommunications Commission (NTC) Memorandum Circular

No. 02-10-2011 deals with the refund order of NTC to telecommunication players in
the Philippines for the alleged excessive charges they imposed on the prices of their
SMS services to their customers. The said Memorandum Circulars orders the
telecommunication companies to refund their subscribers Php0.20 to Php0.15 per
SMS and they will also receive a fine of Php200 per day until they complied with the
said refund.
The top telecommunication companies filed a temporary restraining order for
the said Memorandum Circular to the Supreme Court and currently awaiting final
decision from the latter if the said Memorandum Circular is valid.
If this Memorandum Circular will be considered by the Supreme Court as

valid, this will definitely add to the cost of all telecommunication players in the
Philippines. Estimates in 2010 alone shows that almost around 20 million text
messages were sent daily which would translate to a Php4 million per day refund and
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would subsequently add up to a total of Php1.42 billion refund for the
telecommunication companies since the said Memorandum Circular took into effect.
CONSUMER GROUP’S REQUEST FOR TELECOMMUNICATION

COMPANIES TO ISSUE REFUND
This specific factor pertains to Democracy.net.ph request to the National

Telecommunications Commission (NTC) to revise NTC Memorandum Circular No.
07-07-2011 or more specifically for the telecommunication companies in the
Philippines to issue rebates of refund once the speed of the internet service being
provided by them goes below the minimum broadband speed their customers applied
for. Currently, the only thing that is written on the said Memorandum Circular is to
have the telecommunication companies to disclose to their customers the minimum
broadband speed, service rates and reliability of the service they provide and not the
actual refund.
Even though this factor will definitely add cost of doing business not just for
Globe Telecoms but to the whole telecommunication industry if passed, the company
must not look at it as a negative factor albeit it must look at it as a challenge for them
to make the quality of the products and services they provide to their customers
better. If done so, this will not only increase customer satisfaction, it will also add
more subscribers for them and subsequently add to revenues of the company in the
future.
III.1.2 ECONOMIC FACTORS
GROWTH OF THE PHILIPPINES GDP
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The Gross Domestic Product (GDP) growth rate dropped by 16.5 percent in the
second quarter of 2020, the lowest recorded quarterly growth starting 1981 series.
The main contributors to the Philippine GDP decline were Manufacturing, -21.3
percent; Construction, -33.5 percent; and Transportation and Storage, -59.2 percent.
Among the major economic sectors, only Agriculture, forestry, and fishing increased
with 1.6 percent growth. Industry and Services both decreased during the period by
22.9 percent and 15.8 percent, respectively.
On the expenditure side, major items that declined were: Household Final
Consumption Expenditure (HFCE), 15.5 percent; Gross Capital Formation (GCF),
53.5 percent; Exports, 37.0 percent; and Imports, 40.0 percent. On the other hand,
Government Final Consumption Expenditure (GFCE) posted positive growth of 22.1
percent.
Net Primary Income (NPI) from the Rest of the World and Gross National Income
(GNI) both decline by 22.0 percent and 17.0 percent respectively.
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As the country’s GDP continues to decline, this will create lesser jobs which will
result to the purchasing power of the consumers to decline, which subsequently will
not enable them to spend more which will disincentive the profits of the
telecommunication companies. Also, growth in the Philippine GDP will also curb the
growth of new and existing businesses in the country. And these new businesses will
disincentive the demand for the telecommunication products and services of the
telecommunications industry offer these businesses.
GROWTH OF BUSINESSES IN THE PHILIPPINES SPECIFICALLY THE

BPO INDUSTRY
As the Philippine GDP continues to rise, so does businesses in the country. One of
the key contributor to this grow is the country’s Business Process Outsourcing (BPO)
industry. This industry alone posted a 26% growth in 2014 generating $9 billion in
export earnings for the Philippines. The BPO industry also has a 5% share in the
Philippines GDP. World Bank estimates that this industry is still forecasted to post
strong growth in the future and is expected to give the Philippines future export
earnings of up to $55 billion by 2020.11 Below is a graphical chart of the Philippines
BPO industry.
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Most of the country’s BPO industry requires various telecommunication services to

enable them to the constantly communicate to their various local and foreign
stakeholders. Growth of this industry will subsequently provide growth in the demand
of telecommunication industry’s products and services.
FOREIGN EXCHANGE FACTORS
The Philippine Peso continues to remain stable staying at the range of 43 to 45.50
peso against the US dollar in 2014 despite increasing volatility of currencies abroad
due to a myriad of factors such as slowing economies of 1st world countries, low
interest rate regimes of some countries and quantitative easing of big economies such
as Japan, EU and United States. One main factor that contributes to the stability of the
Philippine Peso is the Banko Sentral ng Pilipinas (BSP) high Gross International
Reserve (GIR) which stands at around $79.806 billion in December 2014. This level
of GIR can cover roughly around 10.2 months worth of the country’s total imports.
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The main contributor to this high GIR is the BSP’s foreign exchange operations,
investments abroad, adjustments on its holdings of gold and the Philippine
government’s net foreign currency deposits. These facts led to the Philippine Peso
appreciating by 1.4% against the U.S. Dollar in 2014. These positive outlooks are still
expected in 2015 and 2016. Below is a graph of the Philippines foreign exchange
reserve from April 2014 to April 2015.
Most of the telecommunication companies in the Philippines have OFW’s and

foreign customers. Due to this, any changes in the exchange rate can greatly affect
their business revenues. Also, telecommunication companies need to interconnect and
partner to other telecommunication companies overseas which makes them prone to
foreign exchange rate fluctuations. And finally, some telecommunication companies
also have foreign currency denominated loans that can greatly affect a company’s
profitability if an adverse swing in foreign exchange rate occurs.
INFLATIONARY FACTORS
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The inflation level in the Philippines remains to be at a manageable level and well
within the forecasted range of the Banko Sentral ng Pilipinas (BSP) which is at 2% to
4% up until 2018. This is already taking into account the falling global oil prices. The
country’s inflation rate slows to 2.4% in March 2015 from the February rate of 2.5%.
The said rate is lower compared to the 3.9% inflation rate in March of 2014. These
rates brought the average inflation figures for the first quarter of 2015 to 2.5%. Below
are tables and graphs of the country’s inflation figures in the previous years.
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Inflationary increases in prices will add up to the costs of various
telecommunication equipments and day-to-day products being used in the
telecommunication industry (eg. Oil, electricity), which will subsequently increase
the expenses incurred by various players in the industry. This is critical given the fact
that the prices of telecommunication products and services rarely goes up and even
pressured by various factors to go down.
III.1.3 SOCIAL / CULTURAL FACTORS
POPULATION GROWTH
The Philippines is one of the countries with the biggest population in the world. In
2014, the country ranked 12th in the world, the 7th in Asia and 2nd in ASEAN. The
Philippine census forecasted that by year 2020, the country’s population will be
around 111 million giving it an annual growth rate of 1.64% from 2015 to 2020.
Furthermore, it is expected that by the year 2045, the country’s population will be
around 142 million.
Also in 2010, only around 6.7% of the Philippines’ total population was aged 60
years old and above. The said age group is forecasted to make up roughly around
10% of the country’s population by 2025. Conversely, children with an age of 14
years old and below are forecasted to fall from one third of the total population in
2010 to one fifth by 2045. Below is a table of the forecasted population growth of the
Philippines in a five year interval from 2000 up to 2040.
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Growth in the Philippine general population is a good sign not just for Globe
Telecoms but for the whole telecommunication industry as this growth translates to
addition in potential future subscribers for the industry, and subsequently an increase
in the demand for products and services offered by telecommunication players.
MEDIAN AGE OF THE PHILIPPINE POPULATION
The Philippines has a relatively young median age in its population. In 2010, it is
estimated to be around 23.4 years of age, the third youngest in the ASEAN region.
Around 33% of the populations are under 15 years old. The said young median age of
the country’s populations is still forecasted to continue in the future. The United
Nations estimates that by year 2030 the median age of the Philippines will be around
29 years of age and by 2050 it will be around 35 years old. Most importantly, the
country’s working age population, or those between 15 years old and 49 years old,
will make up around 67.5% of the country’s total population by 2045. Below is a
table comparing the Philippines median age against other ASEAN neighbor countries.
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The young and working-age majority of the Philippine population is a positive

sign not just for Globe Telecoms but also to the whole Philippine economy as it
means more of the country’s population will be able to work and add to the country’s
total output revenues and subsequently, a growth in the purchasing power of the
country’s population. And given that the products and services of the
telecommunication industry is now becoming a necessity, this will subsequently
increase the demand for the industry’s products and services. Also, it is important to
note that a young population is more prone to be tech-savvy, and a more tech-savvy
population will subsequently increase the demand of various telecommunication
products and services.
GROWTH OF THE FILIPINO MIDDLE CLASS
The Filipino middle class, or Filipinos who’s annual gross income is in the range
of Php64,317.00 to Php787,572.00, took up around 4.66 million families or roughly
around 25% of the Philippines total population in 2013.
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Due to the high GDP growth rate of the country, strong BPO growth forecast, and
the growing remittance from OFW, the Filipino middle class population is expected
to grow in the coming years and the net disposable income of the said group will also
increase. Below is a graphical presentation of the forecasted growth in the disposable
incomes per household in 2018 of the new emerging markets, including the
Philippines.
The growth of the country’s middle class population, and subsequently its disposable
income, will equate to a decrease the country's poverty, which will further increase
the purchasing power of the population. And given that the products and services of
the telecommunication industry is now becoming a necessity, this will also translate
to growth in its demand.
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GROWTH OF THE FILIPINO OFW POPULATION AND REMITTANCE
The number of Filipinos going abroad has been constantly increasing in the past
30 years. The said numbers grew from around 36,000 in 1975 to 1.8 million in 2012
posting a CAGR of 14%. The 2012 data from the Philippine Overseas Employment
Administration (POEA) shows that most of the OFWs were domestic helpers. Below
are the lists of the top OFWs by occupational category.
 Domestic Workers – 222,260

 Factory Workers – 146,448
 Professional and technical workers (eg. Nurses, Singers) – 54,617
 Clerical Workers – 13,893
 Sales Workers – 9,346
 Administrative and Managerial Positions – 3,241
 Agriculture – 1,563
Also, the 2012 data shows that Saudi Arabia is still the top country of destination
for Filipino OFWs gaining 24.4% of the total OFW population. Below are the top
countries of destination of Filipino OFWs.
 Saudi Arabia – 24.4%

 UAE – 18.8%
 Singapore – 10.2%
 Hong Kong – 7.9%
 Qatar – 7.8%
Another important information shown by the POEA report is the significant

increase in the number of Filipino seafarers, which increased by 75% in the past
decade. Currently, Filipinos composes around 20% to 25% of the world’s total
international seafarer crew.
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When it comes to remittances being sent by OFWs to the Philippines, the total
remittance rose by 6.2% from its 2013 levels of $25.351 billion to $26.924 billion in
2014. Most of the said remittance came from United States, Saudi Arabia, UAE,
Singapore, United Kingdom, Japan, Canada and Hong Kong.
The growth in the remittances being sent by OFWs greatly spurs the Philippine
economy and increases the purchasing power of their respective families in the
Philippines. This translates to an increase in the demand of the product and services
given by the country’s telecommunication companies as the said products and
services is now becoming a necessity.
Also, a growth in OFW population would translate to more Filipino families

availing the products and services offered by the telecommunication companies in the
country as a means of communication and a medium for their remittances to their
love ones in the country and abroad.
GROWTH OF E-COMMERCE IN THE PHILIPPINES
With the growth of internet and social media usage in the Philippines, the
country’s e-commerce market pocketed around $1 billion in total sales in 2014 and
the broader internet market, which includes internet usage and other businesses that
uses the internet, stands at Php1.4 trillion in 2014 or around 13% of the country’s
GDP. The Philippine e-commerce sales revenues is expected to double in value to $2
billion by 2015 and is further expected to grow to $9.1billion by 2018.

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Nowadays, entrepreneurs in the Philippines are more frequently tapping the
internet as a medium for their various ventures and businesses. This will not only
generate profit for telecommunication companies, as they are the only industry that
can provide the said services, but it will also help new and existing businesses to
expand and subsequently help the Philippine economy expand as well.
SOCIAL MEDIA
Social media is widely used in the Philippines, Filipinos lead the world in 2014 in
the amount of time spent connected to the internet for social media. One of the main
reasons for this is that around 11 million Filipinos are living overseas and social
media is their primary means of connecting to their friends and families. Due to this
fact, Facebook.com became the most visited site in the Philippines last June 2014.
Also, there are roughly around 30 million Facebook users in the country last 2013.
These facts made the Philippines the social media capital of the world. Below are the
top reasons why Filipinos use social media.
 75% to connect with friends and families

 70% to meet new people
 65% for fun
 63% to share their new life experiences
 62% for company
Being one of the biggest, if not the biggest, country in terms of social media
usage, the telecommunication industry in the Philippines will greatly benefit from this
due to the fact that many of the country’s population is now using the social media
platform to communicate with friends, read news and other related activities. Also
nowadays, businesses are now using social media as a venue for their marketing
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campaigns. Growth in social media usage by businesses will greatly increase the
demand for telecommunication products and services most especially internet
connectivity.
GOVERNMENT AND PRIVATE INSTITUTIONS GOING ONLINE
Nowadays, various Philippine government and private institutions are utilizing the
internet as a medium to serve their various clients and customers. The Philippine
government is even encouraging its various public departments to enhance its
services by tapping the internet as a medium to enhance efficiency and to eradicate
red tapes and corruption. Last march 2012 the Philippine government established a
new Department named Department of Information and Communications Technology
(ICT) to spearhead the country’s policies and regulations in information and
communications technology. Also the Philippine government launched GovCloud,
which provides email and webhosting services to various government agencies. Also,
according to a UN’s survey, The Philippines still ranked 88th in the world out of 190
countries when it comes to e-government initiatives and development. So there are
still lots of room to grow.
The e-commerce in the Philippines in 2013 is valued at $6.2 billion and is further
expected to grow to $9.1 billion by 2018. Also, online shopping platforms like
Amazon, Zalora and Lazada are slowly becoming a trend which will further boost e-
commerce in the country. Internet retailing is forecasted to post a CAGR of 11% in
the future.
Most, if not all, of the citizens of the Philippines needs various products and
service offered by different government and private institutions and the initiatives
from the government and private sector to go online to increase efficiency will greatly
increase the demand to connect to the internet and therefore increase the demand of
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the products and services offered by telecommunication companies. And given that
the Philippines, especially the government, is still lagging compared to other
countries meant that there are lots of opportunities for future growth in
telecommunication industry most especially connection to the internet.
ONLINE BANKING AND PAYMENT SERVICES
Payment using cash is still the primary mode of payment but nowadays more and
more banks and other payment companies are slowly utilizing the internet as a mode
of payment and platform to do banking transactions due to the speed and convenience
of doing transactions online. Also, due to the rise in e-commerce, more and more
Filipinos are expected to utilize cashless financial transactions online.
Cash may still be king in the Philippines but with the worldwide trend shifting to
cashless transactions being made online and with new online security technology
being developed, this medium might be a good contributor to future profits for the
telecommunication industry as the technology needed for doing online transaction is
provided by the country’s telecommunication companies.
GROWTH AND FASTER INTERNET SPEED OF OTHER ASEAN AND

ASIAN COUNTRIES COMPARED TO THE PHILIPPINES
The Philippines has one of the slowest internet speeds in Asia and the ASEAN
region. The Philippines garnered an average speed of 3.6 Mbps, which is the slowest
in ASEAN. Comparing the said speed to Singapore of 61 Mbps, this is the fastest in
the ASEAN region. This is also way below the average internet speed in the ASEAN
region which is 12.4 Mbps and the global average speed of 17.5 Mbps. This is quite
alarming given the fact that around 42 percent of the world’s internet users are
coming from Asia and if the Philippines cannot improve on this, the country can be
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left out of much of the possible opportunities being provided by the internet. Finally,
South Korea still has the world’s fastest internet speed followed by Japan and Hong
Kong. Below is a visual illustration of internet speeds of ASEAN countries.
This is an alarming factor not just for Globe Telecoms, but also to the whole
telecommunication industry in the Philippines. Globe Telecoms must look at this
scenario as an opportunity to gain more market share and subscribers by improving
on their provided internet speed and improving on the quality of internet service it is
providing to its customers.
III.1.4 TECHNOLOGICAL FACTORS
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NEW FIBER OPTIC AND BROADBAND RELATED TECHNOLOGIES
These are new technologies or upgrades of former technologies that are being
tested by various equipment suppliers of the telecommunication industry that has the
capability to enhance the reliability and speed capacity of the current fiber optic and
broadband infrastructure of telecommunication companies. Technologies such as
fiber-to-the-curb, broadband-over-power-lines and DWDM technologies are currently
being developed or upgraded in order to meet the growing demand for speed and
capacity of internet connectivity.
These new technologies being developed for the telecommunication industry are
positive signs for the telecommunication industry in the Philippines as these can be a
source of future growth for telecommunication companies in the country. These new
technologies like upgrades in the DWDM technology and fiber-to-the-curb can solve
capacity and speed issues for telecommunication companies and technologies like
broadband-over-power-lines can help bring internet to remote areas even without the
use of cellsites and frequencies. The only downside for the said technologies is that
they will require additional funds to be invested before being rolled out by
telecommunication companies.
NEW SMARTPHONES AND MOBILE INTERNET GADGETS
The number of mobile phones in the Philippines is increasing steadily. In 2013 the
number is at 108 million, a 58.7% increase from its 2008 levels. Due to the increasing
demand for mobile internet connectivity and the ongoing network upgrades of the top
telecommunication players in the country, mobile phone subscription is still expected
to pose a strong growth in the future. Also, the availability of flexible financing
schemes from various banks and credit card companies will further fuel the growth in
mobile phones in the country.
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This is a positive development for the telecommunication industry in the

Philippines as a growth in number of mobile phones in the country will subsequently
translate to growth in mobile phone subscribers for the telecommunication industry as
the said industry is the only industry that is capable to provide the service needed by
the said mobile phone users.
4G, LTE AND 5G TECHNOLOGIES
With the demand for capacity and internet speed growing, various new
technologies are being developed my telecommunication equipment suppliers to
support the forecasted growth in the demand for telecommunication products and
service and also to remedy the different issues current telecommunication
technologies have. One of the technologies that are being developed are the so called
5G technologies or LTE Advanced (LTE-A). Below is a speed comparison of the
current telecommunication technologies against LTE-A.
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As the demand for internet speed and capacity in the telecommunication industry
grows, new telecommunication technologies are needed to support the increase. This
is a good sign not just for Globe Telecoms but for the whole telecommunication
industry as this can be potentially a good source of future revenues for the industry,
given that the current major sources of revenues are already slowing down.
On the other hand, this can also be a source of new cost for industry players, if not
managed well, due to the new equipments that are needed in order to upgrade the
telecommunication industry’s current infrastructures.
CHEAP ONLINE VOICE AND DATA MESSAGING SERVICES AND APPS
Growth in the usage of various online voice and data messaging apps continues to
grow. This continues to eat up revenues from SMS and other telecommunication
services. In 2014, it is estimated that around 50 billion messages from instant
messaging apps were sent every day globally compared to 21 billion messages sent
via SMS. But in terms of revenues, it is expected that SMS still reigns, generating
around $100 billion in total revenues, which is 50 times bigger than the estimated
revenues from instant messaging apps. Revenue from SMS is still expected to decline
in the coming years as the number of instant messaging apps and usage grows.
With the development and growth of cheap online voice and data messaging
services in the Philippines, revenues from the current major source of revenues of
telecommunication companies might be greatly affect or even become obsolete. But
on the other hand, the technology platform needed by the said apps in order to
function is the internet. And internet connectivity is still one of the products and
services telecommunication companies offer. Globe Telecoms must be able to
manage properly its current revenues from SMS and voice and allocate it to be
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invested in products and services supporting internet connectivity in order to mitigate
the impact to revenues of the said apps.
CYBERATTACKS FROM HACKERS
Globe Telecoms and other telecommunication players are prone to various

hacking and cyberattacks which might disrupt the normal business operations of the
company. A perfect example of this cyberattack is done by hackers to the company’s
website last November 2014. Investigation and cyber security improvement are
currently being performed by the company in order to avoid the said incident from
happening again in the future.
Cybersecurity is a big issue nowadays not just for the telecommunication industry
but to all businesses that utilizes the cyberspace for their normal business operation.
Putting up a cybersecurity system for a company can add up to cost and cyberattacks
can greatly impact the normal business operations of companies that can lead to
decline in productivity and subsequently, in revenues.
OVER-THE-TOP (OTT) TECHNOLOGIES
Over-the-Top technologies refers to usage of a dedicated internet infrastructure of

telecommunication companies to deliver content, normally from television, video and
other services, to customers via the internet. Because of these technologies, traditional
mediums to relay information are slowly moving to the IP landscape. This is critical
nowadays given the fact that the internet is slowly becoming the primary source of
information.
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Over-the-Top technology is a good opportunity not just for Globe Telecoms but
also for all telecommunication players in the Philippines. This will greatly increase
the demand for internet usage, which the telecommunication industry is the only
industry that offer the said services. On the other hand, this factor can also be a
negative thing for the industry, if not handled properly, as this might made obsolete
the current main sources of revenues for the industry, which is mobile voice and
SMS, as this technology might accelerate the growth of cheaper online messaging
apps.
III.1.5 ENVIRONMENTAL FACTORS
TYPHOON, EARTHQUAKE AND VOLANIC RELATED RISKS
Natural disasters are common in the Philippines; every year more than 20
typhoons visit the country. The World Wildlife Fund for Nature states that the
Philippines ranks 3rd in the world for the most vulnerable countries due to climate
change. And not only that, the country is also within the Pacific Rim of Fire which
makes it vulnerable to earthquakes and volcanic eruptions as the country has around
23 active volcanoes. The World Bank estimates that the cost of the said natural
disasters to the Philippine economy every year is around 2.7% of the country’s GDP.
The Philippines is prone to strong typhoons most especially now that the issue on
climate change predicts stronger typhoons in the coming years and the country is
within the pacific rim of fire which greatly increases the possibility of earthquakes
and volcanic disasters to occur. The said disasters might greatly affect the
telecommunication companies if they occur as the infrastructures and equipment of
the industry players are scattered all around the country. Destruction and impairment
of the said equipments might add up to cost of doing business for the
telecommunications industry.
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MILITARY INVASION AND WAR-RELATED RISKS
The Philippines and China is currently locked in a bitter diplomatic protest on

their respective claim on the Spratly island group that could dangerously lead to
military confrontation between the two nations if situation is not handled properly.
There are currently steps being done to deescalate the said tension and the United
States is currently working will all parties involved but so far no clear solution is still
in place. In an event of war with China, The Philippines is in a tough position as the
country’s military is not in a good shape to defend country.
Communication is a vital part of any war, and with that in mind, the
telecommunication industry in the Philippines is prone to be attacked or being taken
over by any invading military forces in an event of war, which will subsequently
disrupt or even halt the normal business operation of the telecommunication industry
in the country.
III.2 INDUSTRY ANALYSIS
III.2.1 INDUSTRY ISSUES (PORTER’S FIVE FORCES)
III.2.1.1 SUMMARY OF PORTER’S FIVE FORCES ANALYSIS
Force Conclusion
1. Rivalry of Competition Weak
2. Threats from New Entrants Weak
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3. Bargaining Power of Suppliers Moderate
4. Bargaining Power of Buyers Weak
5. Threats from Substitutes Weak
III.2.1.1.1 RIVALRY OF COMPETITION: RATING = WEAK
The rivalry between the telecommunication industry players in the Philippines is

weak, even if they tend to show in the media that they are bitterly fighting for market
share. Here are few of the factors that lead to this conclusion. First, the number of
players in the industry is too few and they are decreasing, the trend is that smaller
companies are being taken over by larger companies as can be seen by the merger of
Digitel to the PLDT group in 2011 and the ongoing acquisition of Bayantel by Globe
Telecoms. Also, the market share is concentrated to just the top 2 biggest players.
They also have the majority of the industry’s subscribers.
It is also important to note that price trend is decreasing but not due to
competition but due to government regulatory pressures. Also, the top two main
competing companies are almost equal in sizes and their capability of delivered
products and services are almost equal.
In terms of the demand for the products and services of the industry, demand is
growing on both the broadband and wireless segment but declining on the fixed-line
due to substitute products. Price-cutting is also rare but packaging of products and
services are common. Consumers switching cost are low but consumer has very few
choices aside from the top 2 companies. No actual products are being manufactured
so the risk on perishable goods in the industry low but the industry has a high
depreciation cost due to the fast-changing technologies in the industry.
Leaving the industry is also low due to no other substitute industry is capable of
delivering the products and services offered by the telecommunication industry. Also,
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fixed costs are high in the telecommunication industry, which as high as utility
companies, which makes it harder for new players to enter the industry.
In summary, the rivalry of competition on the telecommunication industry is weak

in a sense that only few players really survive and the small players gets eaten up by
the larger companies. Even if the top 2 big companies in the industry may have bitter
price wars, the competition remains just between the 2 of them.
III.2.1.2 THREAT FROM NEW ENTRANTS: RATING = WEAK
Entering the telecommunication industry in the Philippines is quite hard due to a

myriad of reasons. One of the reasons why it’s hard to enter the said industry is that
technology and specialized know-how to become a player in the telecommunication
industry is highly specialized, costly and changes frequently, which increases the
fixed cost for industry players and decreases the potential entry of new players.
Technical and legal experience and expertise is also important in the industry with
various laws and regulations imposed on it.
Another barrier for entering the telecommunication industry in the country is that
the big players in the telecommunication industry already have significant market
share and customer loyalty. Brand preference already sits with the two big
telecommunication players.
Another significant reason for the difficulty of entering the telecommunications

industry in the country is the large capital requirement needed to enter the
telecommunication industry which is as big as that of the utility industry.
Also, the telecommunication industry is an industry highly regulated by the

government due to limited resources and various governmental laws to comply with
before starting one. Tariffs is also a big factor for new players in the industry, various
tariffs are needed to be paid to the local and national government in this industry.
Telecommunication companies also need various licenses before they can operate and
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use the limited available frequencies for their business operations and most of the big
companies already held the licenses for the said resources.
Another barrier for entry of new players is that the big telecommunication players
already have strong marketing resources and distribution channels that enable them to
get the large chunk of market share which is one of the challenges new players in the
country encounters.
III.2.1.3 BARGAINING POWER OF SUPPLIERS: RATING = MODERATE
With different and fast-changing technologies in the telecommunication industry,

industry players rely a lot to its suppliers. They get only suppliers that have a high
degree of technical know-how on technologies they need. The said suppliers also
provide technical manpower and consultants to telecommunication companies to
teach their employees on how to operate their respective equipments.
The suppliers in the telecommunication industry vary with different technologies.
These suppliers are broken down to mobile, fixed-line and broadband equipment
suppliers. Almost all of the industry’s equipment suppliers are foreign companies.
Due to the highly technical equipments supplied by the said suppliers, there are
mostly no substitute materials for this equipment. But there are also a significant
number of these suppliers, which enables telecommunication companies in the
Philippines to get good rates from them.
It is also important to note that telecommunication companies in the Philippines

often buy in bulk orders of equipments and often comes with labor from suppliers so
the cost of switching raw materials is costly. Pricing & payment terms from suppliers
are also flexible and often telecommunication companies can bargain and get good
terms due to bulk orders and the limited number of telecommunication companies
operating in the Philippines.
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Backward integration is not a common practice in the Philippines
telecommunication industry due to that fact that most of the industry suppliers are
highly technical companies with high levels of Research and Development and the
said suppliers are also big multinational companies that is sometimes even bigger in
size than local telecommunication companies.
III.2.1.4 BARGAINING POWER OF BUYERS: RATING = WEAK
Most, if not all of the Philippine population uses the products and services of the
telecommunication industry. The major buyer groups in the country are individual,
businesses and government institutions. Nowadays, everyone needs to communicate
and connect to the internet for various reasons. This makes the products and services
of the telecommunication industry a necessity. These factors show how large a group
of customers are available for the telecommunications industry, but due to limited
number of industry players, buyers do not have that much of a bargaining power.
The telecommunication industry in the Philippines has concentration of market
share, where the market shares are held by 2 biggest players that has the majority of
the industry’s subscribers. Products and services of the telecommunication industry
are undifferentiated. But with limited industry players, customers do not have much
bargaining power.
Also, brand loyalty is high mainly due to limited choices. It is also one of the
reasons why the government regulates this industry. Reduction in prices of the
products and services of the industry is also not common and oftentimes government
intervention is needed to impose price reductions on the industry.
III.2.1.5 THREAT FROM SUBSTITUTES: RATING = WEAK

Market share and subscribers of the telecommunication industry in the Philippines
is quite concentrated to few big players. There might be substitute technologies and
price pressures for the products and service of the telecommunication industry but at
the end of the day, the products and services needed to support the said substitutes
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still needs other products and services that only the telecommunication industry
provides (e.g. online free calls still uses the internet). This market phenomenon is
called market cannibalism.
Marketing aggressiveness between the big telecommunication players is quite

aggressive. But with few market players, it’s just a game of who gets more
subscribers of the 2 big players. The capacity expansion plans of each of the big
players are aggressive mainly due to the upward demand for faster speeds and limited
players who offer the said services.
III.2.1.6 CONCLUSION
The telecommunications Industry in the Philippines is still a very profitable

industry, once you have gained a firm foothold and presence. Even though profits are
slowing down and even falling for some, it is still a very lucrative industry due to low
number of competition, difficulty of entering the said industry, weak bargaining
power of customers and no other available substitute for industry, most especially
now that that its products and services of the telecommunications industry are
becoming an everyday necessity.
Potential for substitutes is an area in which Globe Telecoms could look into to
build a sustainable competitive advantage. They should be able to be the first one to
take advantage of new technologies in the telecommunication industry that can
potentially become a replacement of the existing technologies in the future and at the
same time satisfy the needs of its current customers by giving them what they really
need. In the event that the company would not be able to exploit this competitive
advantage, they might face possible obsolescent and decrease in profits. A good
example of this the fixed-line segment of the telecommunications industry which was
made obsolete by the growth of the wireless and broadband segment.
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Globe Telecoms should stay in the telecommunications industry in the country as
they already have a good presence and market share in the said industry. And also the
industry still has lots of potential for new avenues of growth.
IV. CAPABILITY ANALYSIS
IV.1 STRATEGIC CAPABILITIES
IV.1.1 Market Penetration Strategy
The market development strategy of Globe Telecoms is to offer its products and
services in a customizable way to its broad range of customers so that they can cater
each customers unique individual needs.
Conclusion: Good but not effective due to confusion by its customers.
The company’s strategy of letting the customers customize the products and
services that they avail with the company only confuses the customers even further
and subsequently annoys them which leads to decrease in customer satisfaction and
some of its promos becomes unutilized. Also, the company’s customers tend to
believe that the company is giving them false marketing and sales pitches due to
wrong products and services the customer chooses because of the wide array of
services it provides that tends to confuse them. Globe Telecoms should be able to
simplify their products and services so that customers will not get confused.
IV.1.2 Product Development Strategy

Globe Telecoms is currently embarking on a network modernization program that
will make its telecommunication infrastructure more advance compared to its
competitors and also ready it for future technological developments and demand of
the telecommunication industry’s products and services.
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Conclusion: Good but results has yet to be seen.
This is a good strategy in a way because this will enable Globe Telecoms to
provide a more technologically advanced network to its customers at a cheaper price
in the future. The only downside is that the current network is suffering in quality due
to various network configuration changes and downtimes that goes with the network
modernization. The company must be able to manage and minimize the impact of
network modernization to its current network to minimize its effect on its customer
satisfaction.
IV.1.3 Cost Management Strategy
Globe Telecoms has exclusively partnered with Huawei Technologies and Alcatel
Lucent for the latter to swap out the company’s old network to a new, modernized
network and to provide the company the equipments needed for the said upgrade.
This exclusive partnership enables the company to ask for flexible payment terms
with Huawei and Alcatel Lucent.
Conclusion: Helpful in cost management but risk from default and dependence to one
supplier increase.
This strategy can greatly cut the cost for the company’s network modernization
but one big concern here is that the company is relying too much on one supplier to
provide them the core services that they need which might spell the success or failure
of the company in the future.
IV.1.4 Horizontal Integration Strategy
Globe Telecoms is currently in the process of converting Bayantel’s outstanding

debts into equity to gain control of the latter and restructure it. Globe Telecoms is just
awaiting NTC’s approval to proceed with the said acquisition.
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Conclusion: Good in increasing network capabilities of Globe Telecoms and at the
same time save on cost.
This is a good strategy for Globe Telecoms most especially now that its main
rival, PLDT, has acquired Digitel. This strategy will not only let the company gain
market share and size, it will also give Globe Telecoms more frequencies to be able to
utilize and provide additional bandwidth and subsequently more capacity and better
service to its customers at a lower cost.
IV.2 SWOT ANALYSIS
IV.2.1 STRENGTH OPPORTUNITY STRATEGIES
STRENGTHS (S) OPPORTUNITIES (O)

S1: Prestigious Brand Name O1: Growth of the country's BPO and
S2: Large Postpaid Market Share business sector due to GDP growth
S3: Complete Product & Service O2: Current finance environment
Portfolio Under One Brand and suitable for investments
Company O3: E-commerce Growth
S4: Modern Products and Services O4: Duopoly with no substitute industry
O5: Strong Growth in the upper income
segment
O6: Growth on demand and
development of new technologies in
broadband
 SO1: Globe can create flexible product mix that can fit the different needs of
growing businesses. (S1, S3, S4, O1, O3, O5 and O6)
 SO2: Globe can leverage more its brand to get the best loan terms to lenders to be
able to invest on key growth areas of the industry. (S1, S2, O2 and O4)
 SO3: Globe can offer more shares to the public via PSE to fund its investments on
better quality of segments with future strong growth potential. (S1, S2, O2 and
O4)
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 SO4: Globe can invest more on better service quality and customer retention
programs to attract more customers from the strong upper income segment
growth. (S1, S2, S3, S4, O2, O5)
 SO5: Globe can tap banks and other financial market and use its brand reputation
to get good rates to refinance its loans and improve the company’s financial
position. (S1, S2, O2 and O4)
 SO6: Globe can create new product mix that specifically targets the upper income
segment of the industry. (S1, S2, O2 and O4)
 S07: Globe can invest on marketing and promos to get more share of the high
growing upper income segment (S1, S2, S3, S4, O2, O4 and O6).
 SO8: Globe can invest on developing new broadband products to get more market
share of the growing broadband segment (S1, S2, S3, S4, O2, O4 and O6).
IV.2.2 STRENGTH THREAT STRATEGIES
STRENGTHS (S) THREATS (T)

S1: Prestigious Brand Name T1: Calamity related risks
S2: Large Postpaid Market Share T2: Growth of cheap voice and data
S3: Complete Product & Service messaging Apps
Portfolio Under One Brand and T3: Ongoing senate inquiry and legal
Company proceedings against the industry
S4: Modern Products and Services T4: Saturation of major product
revenues streams
T5: Decline in the prepaid segment
 ST1: Globe can shift its marketing and investment focus more from mobile voice
and SMS to mobile and broadband internet. (S1, S2, S3, S4, T2, T3 and T4)
 ST2: Globe can put better programs for subscriber retentions for its postpaid
subscribers to minimize the impact of the declining prepaid segment to its bottom-
line. (S1, S2, T4 and T5)
 ST3: Globe can take advantage of its modern and complete product portfolio to
interoperate and create back-up technologies once calamities hit and therefore
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minimize the impact to its costs. Eg: using the mobile network to be a back-up for
fixed-line or broadband if the latter goes down and vice versa. (S3, S4 and T1)
 ST4: Globe must not look at the ongoing senate inquiry as a threat but as a
medium in which the company can voice out and expose its concerns to
lawmakers about various red tapes and bureaucracy in the local and national
government that hinders the company to provide better services to its customers.
(S1 and T3)
 ST5: Globe can put better promos for its postpaid subscribers to minimize the
impact of the declining prepaid segment to its bottom-line. (S1, S2, T4 and T5).
 ST6: Globe can invest more on developing over-the-top (OTT) technologies to be
able to enter the mobile apps and digital market industry (S1, S2, S3, S4, T2 and
T4)
IV.2.3 WEAKNESS OPPORTUNITY STRATEGIES
WEAKNESSES (W) OPPORTUNITIES (O)

W1: Smaller network infrastructure O1: Growth of the country's BPO and
Compared to Key Competitor business sector due to GDP growth
W2: Smaller Resources Compared to O2: Current finance environment
Key Competitor suitable for investments
W3: Poor Customer Satisfaction due to O3: E-commerce Growth
lack of customer service skills of O4: Duopoly with no substitute industry
employees O5: Strong Growth in the upper income
W4: Poor Network Reliability segment
W5: High Level of Debt O6: Growth on demand and
W6: Current Limited Number of Key development of new technologies in
Suppliers broadband
 WO1: Globe can retain more revenues from the strong postpaid segment, wherein
they are the leading player, and other strong growth areas and put the said
revenues to be invested to develop its network infrastructure. (W1, W2, W5, O1,
O3, O4, O5 and O6)
 WO2: Globe can get strategic partners that have good resources to in invest in the
company to strengthen Globe’s resources to be able to invest more to improve its
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network infrastructure, network reliability and subsequently customer satisfaction.
(W1, W2, W3, W4, W5, O2 and O4)
 WO3: Globe can tap the country’s financial markets to refinance its high interest
bearing loans and obligations given the country’s current good investment
environment to improve the company’s financial position. (W2, W5 and O2)
 WO4: Globe can tap the country’s financial markets to get resources to improve
its network reliability. (W1, W2, W3, W4, O1, O2, O3, O4, O5 and O6)
 WO5: Globe can also utilize other suppliers of its products and services instead of
the current focused number of suppliers to minimize the company’s risk of over-
reliance to a small number of suppliers. (W6, O2 and O4)
 WO6: Globe can tap the country’s financial markets to get resources to invest in
segment of the industry with strong future growth potentials. (W1, W2, W3, W4,
O1, O2, O3, O4, O5 and O6)
 WO7: Globe can tap the country’s financial markets to get resources to hire
people and train its employees to have better customer service skills and to be
customer centric. (W1, W2, W3, W4, O1, O2, O3, O4, O5 and O6)
IV.2.4 WEAKNESS THREAT STRATEGIES
WEAKNESSES (W) THREATS (T)

W1: Smaller network infrastructure T1: Calamity related risks
Compared to Key Competitor T2: Growth of cheap voice and data
W2: Smaller Resources Compared to messaging Apps
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Key Competitor T3: Ongoing senate inquiry and legal
W3: Poor Customer Satisfaction due to proceedings against the industry
lack of customer service skills of T4: Saturation of major product
employees revenues streams
W4: Poor Network Reliability T5: Decline in the prepaid segment
W5: High Level of Debt
W6: Current Limited Number of Key
Suppliers
 WT1: Globe can partner with smaller industry players to have them as backup if
calamities brings Globes network down. (W1, W2, W3, W4, W5 and T1)
 WT2: Globe can effectively allocate more resources to key growth areas, cut on
unnecessary costs and make its cash flow more efficient to minimize the impact
on profits of substitute cheap voice and data Apps and saturation of major revenue
streams. (W2, W5, T2, T4 and T5)
 WT3: Globe can improve customer support and marketing by in-house trainings,
managerial focus and support to make the business more efficient and increase
customer satisfaction and at the same time on cost. (W2, W3, T2, T4 and T5)
 WT4: Globe can utilize the current senate hearings as a medium to expose to the
lawmakers unnecessary costs incurred by the company due to redtapes and
bureaucracy. (W2, W3, W4, W5, T3, T4 and T5)
 WT5: Globe can also include contingencies in its budget if current cases filed to
the company might materialize and add to the company’s expenses. (W2, W5, T3,
T4 and T5)
 WT6: Globe can get more suppliers that can offer better rates to minimize its
dependence to a limited number of suppliers. (W2, W5, W6, T2, T4 and T5)
V. PROPOSED STRATEGIES
V.1 RECOMMENDED STRATEGIC OBJECTIVES
Base on the results of the analysis done regarding the company and the
telecommunication industry, Globe Telecoms should focus on improving its customer
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satisfaction and quality of the products and services it provides to its customers in
order to gain more subscribers and market share and subsequently, gain market
leadership in areas that offer strong growth potentials in the future.
Corporate Strategic Objectives: To gain market leadership in key areas of the

telecommunication industry that offer strong growth potentials in the future. This will
subsequently translate to a CAGR of 13% in sales revenues or Php156 billion in
annual sales revenues by 2020.
In order to reach total annual sales revenue of Php156 billion by 2020, Globe
Telecoms must be able to gain market leadership in areas of the telecommunication
industry in the Philippines that has strong future growth potentials. The areas of focus
identified are mobile data, broadband and the postpaid segments of the industry. This
should be done while not neglecting the current major revenue drivers of the
company namely its mobile voice and SMS segments.
Functional Strategic Objectives (Financial): To maintain or surpass the current

CAGR in Sales Revenue of 12.17%. This translates to 111Billion in 2017, 124Billion
in 2018, 139 Billion in 2019 and 156Billion in 2020.
Globe Telecoms must be able to sustain and even surpass its current strong
growth, even if the current major sources of revenues in the telecommunication
industry in the Philippines are already in its saturation phase. In order to do this, the
company should be able to gain a leadership in the key areas that offer strong growth
potentials in the future namely the mobile data, broadband and the postpaid segments
of the industry. They may also follow the best practices the other top
telecommunication players in other ASEAN countries, especially Singapore, to gain
leadership in key growth areas of the industry.
Functional Strategic Objectives (Marketing): To get a total industry market share

of 40.61% in 2017, 44.77% in 2018, 50% in 2019 and 54.79% in 2020. This can be
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done by getting more high revenue subscribers in the postpaid segments and also
getting the market leadership, in terms of subscribers, in the mobile data and
broadband segment of the industry. The target is to get a 25% growth in number of
postpaid subscribers and a 20% growth in total subscribers by 2020 while lowering
the postpaid and prepaid churn rate to below 1% and 2% respectively.
In to gain market leadership in key strong areas by 2020, Globe Telecoms must be
able to attract more subscribers, especially high-income subscribers, in the future
strong growth segments of the industry namely mobile data, broadband and the
postpaid segment, and at the same time retain and get more subscribers to switch
from the current high income generating segments. They may also follow the best
practices the other top telecommunication players in other ASEAN countries,
especially Singapore, to improve customer satisfaction which will lower the
company’s churn rate and also attract more subscribers especially in key growth areas
of the industry.
Functional Strategic Objectives (People): Globe Telecoms must improve on its

customer satisfaction and technical expertise in dealing with network reliability issues
by having more customer service and technical training to all its employees, hire new
employees with good customer service expertise, lower its corporate hierarchy by at
least 1 level for better upper management visibility, creating a clear escalation
procedures and complaint prioritization and easy and user-friendly survey and
feedback forms and procedures that is regularly reviewed by top management and
tied to each employee’s KPI.
In order to attract more customers, especially the high income subscribers, Globe
Telecoms must improve its customer satisfaction by a mixture of better customer
service and reliable network. This can be achieve by better technical and customer
service quality of its staff and better upper management visibility of what is
happening on the ground to make decision making faster and more efficient.
47
Also, a clear escalation, complaint prioritization, and an easy and user-friendly
survey and feedback forms and procedures that is regularly reviewed by top
management and tied to each employee’s KPI should be created to be able to
regularly track the actual concerns of the customers, most especially high-income
customers from the postpaid segment. They may also hire consultants from Singtel
that can train the company’s employees about their best practices in their company.
V.2 RECOMMENDED STRATEGIES
Strategy #1: Market Penetration: Globe can tap the country’s financial markets to
get resources to invest in segment of the industry with strong future growth potentials.
Globe Telecoms can tap the current good financial environment to invest on
improvement of the key areas of its business where there is a good potential for
growth in the future. This will not only minimize the impact of declining revenues
from its current key segments but also can be a good source of future revenues for the
company. The key is not to focus anymore on expensive cellsites, tower and facility
construction but on equipments in the core network infrastructure that adds speeds,
capacity and redundancies to the company’s existing cellsites. Equipments like
additional fiber optics and transmission equipments that are cheaper to implement,
adds more capacity and redundancies, and will be placed on existing company
facilities to save cost, will greatly improve quality and at the same time save on
expense for the company. Below are the specific steps that can be done.
 Globe Telecoms will form a team. The members will consist of consultants from
the academe, leaders of consumer groups, high-income customers and
government. They will be accompanied by key employees and top management
from various groups within Globe Telecoms.
 .The main goal of the team is to 1)Identify the key concerns of its customers,
2)key locations of the key customers, 3)key locations that badly need
improvements and finally 4)actual improvement to be made.
48
 Once the locations are identified, additional core network and transmission
equipments on the said locations should be doubled.
 Target is to double the existing transmission speed, capacity and additional
redundancies for each of the key locations.
 The target is to have 5 key locations to be improved every month starting 2016.
 If the capacity is not enough, the same procedure can be applied again the next
month until enough capacity is available.
 Target is to have a 20% increase in usage for each location which will
subsequently lead to a 20% increase in revenues for each key locations.
 Also, if there should be an increase of more than 50% in usage on a specific key
location, the said location will be upgraded again.
Strategy #2: Market Penetration: Globe can invest more on better service quality
and customer retention programs to attract more of the strong upper income segment
growth.
By doing this strategy, Globe Telecoms will not only improve the company’s
customer satisfaction, it will also get more subscribers for the company. The
following are the identified key issues that the company had with regards to customer
service.
 Too much hierarchy that leads to slow decision making and coordination with
each group.
 Due to this slow decision making and coordination, customer issues tend to get
stuck at the customer service department.
 No clear escalation procedures in place
 No clear ticket prioritization in place
 No clear time and SLA for each customer issues
 Survey and feedback forms from the customer tends to be not taken seriously
 Customer satisfaction has a light bearing in each employees KPI
49
Below are some of the recommendations to improve the customer satisfaction for
the Globe Telecom’s customers.
 Globe Telecoms will form a team. The members will consist of consultants from
the academe, leaders of consumer groups, high-income customers and
government. They will be accompanied by key employees and top management
from Globe Telecoms.
 The main goal of the team is to 1) Identify the key concerns of its customers, 2)
key locations of the key customers, 3) key locations that badly need improvements
and finally 4) actual improvement to be made.
 Once identified, Globe Telecoms will address the main concerns of its customers
 Then, to ensure customer issues will be addressed more efficiently in the future,
Globe Telecoms will impose clear escalation procedures and issue prioritization to
all customer complaints and their respective SLA and time of restoration. Below
are the recommendations.
Max Time of each Time can that

restoratio updates on be escalated to
Prioritization Description n time issue next level
Priority 1 Network wide outages 4 hrs every 30 mins every 1 hr
Priority 2 Service completely down 8 hrs every 1 hr every 2 hrs
Priority 3 Service up but with issues 12 hrs every 2 hr every 3hrs
Priority 4 Customer change requests 24 hrs 24 hrs every 24 hrs
 For every escalation level, the customer will be able to directly speak to top
management which will enable the restoration of the said customer issue faster
and coordination with other groups easier. Below are the recommended escalation
points of contact.
Escalation level Point of contact

1 Supervisor
2 Manager
3 Group Manager
4 Director
50
 Once the last escalation level is reached and the customer issue is not yet resolved,
the customer will be provided and alternative action procedure or will be entitled
to a full reimbursement.
 The said escalation procedures, SLA and ticket prioritization is patterned to the
best practices being followed worldwide which is the IT Infrastructure Library
(ITIL). The said best practices are also being used by top telecommunication
companies not just in the ASEAN region but also worldwide.
 Surveys and feedback forms will be sent to the customer that had an issue.
 The forms will let them rate the customer service they received from the specific
company employee.
 This rating will regularly be reviewed by top management
 This will also be a big part of each employee grade in his/her KPI.
 Also, a customer service group will be formed that is dedicated to postpaid and
high-income customers.
 This group will proactively monitor, escalate and give heads-up to top
management, on behalf of the customer, if issues occur.
 This will ensure good customer service quality to this segment.
 Marketing campaigns will include these new customer service improvements
when selling this products and services to its customer most specifically the
average speed, promise reliability and uptime and the clear reimbursement and
alternative action procedures if SLAs are breached.
 Quarterly and Annual survey form will also be sent to high-income customers to
review if they are satisfied with the products and services of the company.
 Target of these strategies is to gain a 20% increase in total subscriber and a 25%
increase in total postpaid subscriber by 2018.
 Also, the target is to lower the total subscriber churn rate to 2% and total postpaid
churn rate to less than 1%.
51
Strategy #3: Market Penetration: Globe can tap the country’s financial markets to
get resources to hire people and train its employees to have better customer service
skills and to be customer centric.
Customer satisfaction is one of the key areas of improvement for Globe Telecoms
and hiring and training the company’s employees with customer service skills will
greatly improve customer satisfaction and subsequently will increase the company’s
subscriber base and decrease the churn rate of the company. Below are few
recommendations for the company.
 Make a high customer service skill a as major factor in hiring new employees
 Hire industry experts on customer service into the company
 Get individual consultants and companies to advise Globe Telecoms on how to
improve its internal business processes to be more focus on customer satisfaction
 Consultants from top telecommunication companies in ASEAN, especially in
Singtel, and globally can also be hired to train employees with better technical
skills and the best practices being done globally.
 Conduct customer service trainings from internal and external sources.
 Empower management to be more involve in dealing with customer complaints
and issues.
VI. STRATEGY EVALUATION
Increase
Industry leader
Financial Increase Total Annual Sales by CAGR in
in key growth
Perspective 2025 Sales
areas by 2025
Revenue
Increase in
Undisputed
number of
market leader in
Lower postpaid churn rate topo postpaid
Customer subscriber base
less than 1% and prepaid subscribers
Perspective of all strong
subscribers churn rate and increase
segment by
in total
2025
subscribers
52
Increase the
Process Increase in LTE data Reliability Lower LTE average LTE
Perspective by 2025 latency by 2025 DL speed by
2025
All new hired
Increase
employees Decrease
Learning Increase Customer
should have a corporate
& Growth technical Service
good customer hierarchical
Perspective trainings by 2023 training by
service level by 2024
2023
background
Financial
In order for Globe Telecoms to achieve its Vision and its goal to be the undisputed
leader in telecommunication industry in the Philippines, the company must become first
the industry leader in total revenues by 2025. This can be done by increasing its total
sales revenues by 2025 which translates to an increase in CAGR.
Customer
In order to achieve the revenue goals, Globe Telecoms should become the undisputed
industry leader in subscriber base in all strong segments of the telecommunication
industry in the Philippines. To get there, the company should have an increase in CAGR
on the number of its postpaid subscribers and increase on the number of total subscribers.
Also, the company should lower its postpaid churn rate for its prepaid subscribers.
Internal Process
To support the goals listed above, Globe Telecoms network performance should also
become better. There should be an increase in LTE reliability by 2025. Also, the
company’s network latency should decrease by 2025. And finally, the company’s LTE
download speed should increase.
Learning and Growth
53
There should also be an increase in technical trainings for customer service and a
decrease in corporate hierarchy of at least 1 level. Also, new hire requirements should
include a good track record on customer service.
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A Strategic Management Paper

GLOBE TELECOM INC.

Submitted to the faculty of the Graduate School of

Chapter IV: Capability analysis

Globe Telecoms is a major provider of telecommunication services in the

The Company’s principal shareholders are Ayala Corporation and Singapore

Sustainability at Globe is anchored on The Globe Purpose, “In everything we do,

Globe Bridging Communities (GlobeBridgeCom) is the corporate social

Globe Telecoms is also a recipient of various licenses and service authorizations

II. Vision, Mission, Goals and Objectives

II.1 Vision statement:

Parameter Yes/No Evaluation

The Globe Way

Parameter Yes/No If yes, which part of the statement

Parameter Yes/No Evaluation

Parameter Yes/No If yes, which part of the statement

III.1 MACRO TREND ANALYSIS (PESTEL ANALYSIS)

III.1.1 POLITICAL / LEGAL FACTORS

ONGOING SENATE AND NTC INQUIRY ON THE SLOW INTERNET

RELEVANCE TO THE ENTERPRISE

VARIOUS THREATS BY REBELS, TERRORIST AND VARIOUS

Due to the wide, scattered and sometimes remote locations of

RELEVANCE TO THE ENTERPRISE

Various threats to telecommunication facilities around the Philippines by

RED TAPES AND EVER-CHANGING LOCAL GOVERNMENT LAWS

The telecommunication industry in the Philippines, most especially the top

RELEVANCE TO THE ENTERPRISE

This is a negative sign for the telecommunication industry in the Philippines as

NTC MEMORANDUM CIRCULAR NO. 02-10-2011

The National Telecommunications Commission (NTC) Memorandum Circular

RELEVANCE TO THE ENTERPRISE

If this Memorandum Circular will be considered by the Supreme Court as

CONSUMER GROUP’S REQUEST FOR TELECOMMUNICATION

This specific factor pertains to Democracy.net.ph request to the National

RELEVANCE TO THE ENTERPRISE

III.1.2 ECONOMIC FACTORS

GROWTH OF THE PHILIPPINES GDP

RELEVANCE TO THE ENTERPRISE

GROWTH OF BUSINESSES IN THE PHILIPPINES SPECIFICALLY THE

Most of the country’s BPO industry requires various telecommunication services to

FOREIGN EXCHANGE FACTORS

RELEVANCE TO THE ENTERPRISE

Most of the telecommunication companies in the Philippines have OFW’s and

III.1.3 SOCIAL / CULTURAL FACTORS

MEDIAN AGE OF THE PHILIPPINE POPULATION

The young and working-age majority of the Philippine population is a positive

GROWTH OF THE FILIPINO MIDDLE CLASS

RELEVANCE TO THE ENTERPRISE

 Domestic Workers – 222,260

 Saudi Arabia – 24.4%

Another important information shown by the POEA report is the significant

RELEVANCE TO THE ENTERPRISE

Also, a growth in OFW population would translate to more Filipino families

GROWTH OF E-COMMERCE IN THE PHILIPPINES

RELEVANCE TO THE ENTERPRISE

 75% to connect with friends and families

RELEVANCE TO THE ENTERPRISE

GOVERNMENT AND PRIVATE INSTITUTIONS GOING ONLINE

RELEVANCE TO THE ENTERPRISE

ONLINE BANKING AND PAYMENT SERVICES

RELEVANCE TO THE ENTERPRISE

GROWTH AND FASTER INTERNET SPEED OF OTHER ASEAN AND

RELEVANCE TO THE ENTERPRISE