by Jan Michael Carpo, Reporter
Defying a dip in its core telecommunications earnings, Globe Telecom Inc. announced a surprising 2% surge in net income for the first quarter of the year, reaching P6.98 billion. This unexpected growth is primarily attributed to the robust performance of its digital financial services arm, GCash, highlighting the increasing importance of non-telco ventures for the company’s financial health.
Despite facing headwinds in its traditional sectors, Globe’s bottom line saw an uptick, contrasting with a 3% dip in overall revenue to P43.76 billion. Simultaneously, the company’s operating expenses rose by 2% to P40.54 billion.
The breakdown reveals a challenging environment for Globe’s established services: mobile earnings decreased by 3% to P28.3 billion, while broadband revenues experienced a 5% drop to P5.8 billion. The corporate data segment also contracted by 2%, settling at P4.9 billion.
GCash expands reach for overseas Filipino workers
Adding to its growing influence, GCash is also making significant strides in facilitating international financial transactions. In a significant move aimed at streamlining financial transactions for millions of overseas Filipino workers (OFWs), GCash has announced a strategic partnership with BCRemit, a leading online remittance provider.
Photo shows (L-R): GCash International head of product and EMEA Jules Abalos, general manager Paul Albano, BCRemit founder Oliver Calma, co-founder Jose Calma, director of finance and compliance Pia Henson.
This collaboration, effective last February, empowers OFWs in Europe, specifically Spain and the United Kingdom, and the United States, to effortlessly send money directly to their loved ones’ GCash accounts in the Philippines.
The partnership addresses a critical need for OFWs, who often face challenges in finding reliable and cost-effective methods to transfer funds home.
By integrating BCRemit’s robust platform with GCash’s extensive network within the Philippines, the alliance promises to offer a seamless and efficient remittance experience.
Broadband key to navigating mature connectivity market
CREDIT: John Lamb / Getty Images
Acknowledging the pressures on the mature Philippine connectivity market, Globe’s President and CEO, Carl Raymond Cruz, highlighted the pivotal role of the company’s non-traditional offerings. He expressed optimism, particularly emphasizing the robust performance of GCash and the promising growth of their prepaid broadband service.
The standout contributor to Globe’s financial resilience is undoubtedly GCash, operated by Mynt. Globe’s share in Mynt’s equity earnings witnessed a remarkable surge, climbing from P968 million in the first quarter of the previous year to a substantial P1.8 billion in the corresponding period this year.
This substantial increase underscores GCash’s dominant position and accelerating influence within the Philippine digital finance ecosystem.
By March, Mynt’s contribution to Globe’s pre-tax earnings had more than doubled, rising to 22% from 11% in March 2024.
Further bolstering Globe’s financial performance was the P2.56 billion gain realized from the strategic sale of an 8% stake in Mynt to Mitsubishi UFJ Financial Group, a transaction successfully concluded in February.
GFiber prepaid sees rapid adoption; Globe tightens spending
Beyond the extraordinary growth of GCash, Globe is also witnessing positive momentum in its GFiber Prepaid service. This retail broadband innovation has quickly gained traction, amassing over 400,000 subscribers since its introduction.
Notably, the service boasts a high level of user engagement, with approximately 70% of prepaid subscribers actively and consistently reloading their accounts.
In a strategic move towards financial optimization, Globe has also reduced its capital expenditure to P8.5 billion in the first quarter. The company has set a target to maintain its capital spending below $1 billion for the entirety of 2025, signaling a focus on enhancing profitability and maximizing existing assets.
The latest financial results from Globe Telecom paint a clear picture of a company navigating a transforming industry.
While its traditional revenue streams face headwinds, the remarkable growth of GCash and the promising performance of new ventures like GFiber Prepaid are proving to be crucial engines for profitability, highlighting the increasing importance of digital financial services in the telecommunications landscape.