Globe Telecom’s Chief Finance Officer Rizza Maniego-Eala has explained why the mobile operator has slashed its capital expenditure (Capex) budget by 30 percent for 2023 — despite its 5G network expansion.
Globe Telecom is aiming for a Capex of approximately US$1.3 billion this year, a reduction of over 30 percent from the 2022 record Capex spending as the company shifts focus to capital efficiency and optimization.
Globe Telecom, a leading digital solutions platform in the Philippines, has spent record-high levels of Capex in the past several years, as it took advantage of different opportunities to fast-track its network expansion and customer experience enhancements. As it moves to 2023, on the back of those significant investments, the focus of Globe shifts to ensuring the sustainability of its free cash flow generation.
Globe aims to further drop its Capex spending to $1 billion by 2024 as part of its efforts to optimize the existing infrastructure and refocus capital deployment. These efficiency efforts will be done “without sacrificing customer experience and revenue opportunities,” said Globe Chief Finance Officer Rizza Maniego-Eala.
Globe Telecom’s Capex spending in 2022 closed at ₱101.4 billion, 9 percent above the previous year. The majority or 86 percent of the investment was allocated for data requirements, ensuring that Globe customers have access to the best digital solutions and connectivity wherever they are.
The company’s strict and clear governance processes have ensured proper capital deployment over the years. The reduction of Capex spending in 2023 is proof of Globe’s commitment to responsible financial management.
A significant reduction in Capex by telecom operators will impact telecom equipment makers such as Huawei, Nokia, Ericsson, Samsung, ZTE, Cisco, NEC, among others.
