Elections to boost Globe Telecom's mobile business

Posted at 02/05/10 6:16 PM

MANILA, Philippines - Ayala-led Globe Telecom Inc. is expecting its mobile business to improve this year as voice calls and text messaging will be used more prominently in campaigns for the upcoming national elections.

But Ernest Cu, Globe Telecom president and chief executive officer, noted that the growth will not be as strong compared to previous election years given the company's bucket-priced offers.

"The overall revenue growth will be in the low- to mid-single digit levels for mobile," Cu said.

Globe Telecom's mobile business currently accounts for 80% of the company's total revenues. The remaining 20% of the Ayala-led firm's revenues are sourced from its broadband and fixed line businesses.

For 2009, Globe Telecom's mobile business revenues dropped 4% to P53.21 billion due to intense competition. The company also cited the growing preference of subscribers for value offers on the back of a weak consumer economy. (Read: Getting to know the 'sophisticated' prepaid user)

An election year usually sees a rise in consumer spending as populist policies and spending by political parties infuse money into the household sector.

It also translates to more revenues for telecommunications firms, media networks, public relations firms and advertising companies as politicians pay for their services to kick off their respective campaigns.