Globe Telecom to trim 2009 capex to $350M-$400M

Reuters

Posted at Feb 03 2009 07:09 PM | Updated as of Feb 04 2009 03:09 AM

Globe Telecom, the Philippines' second-biggest telecoms firm, said it will cut its capital spending this year by up to 16 percent, to $350 million-$400 million from about $420 million in 2008.

Globe, which posted a 15 percent drop in 2008 net income, said its capital spending budget this year would fund investments in wired and wireless broadband for residential consumers, network enhancements and maintenance of its core 2G business.

Globe expects growth to continue in its broadband business despite a slowing economy, largely on account of the country's small population of broadband clients. The company ended 2008 with 234,000 broadband subscribers, up 84 percent from 2007.

The company, a subsidiary of Philippine conglomerate Ayala Corp and Singapore Telecommunications, had net 2008 income of P11.3 billion ($237.8 million) against P13.3 billion in 2007.

Rival Philippine Long Distance Telephone Co is due to announce its 2008 earnings on March 3.

Globe ended 2008 with a wireless subscriber base of 24.7 million, up 22 percent. The wireless business accounts for nearly 90 percent of the group's service revenue.

The company said it would maintain this year a dividend ratio of 75 percent of the prior year's net income, adding its board had approved the payment of a first interim dividend of P32 per share on March 10.