Globe Telecom is on track to complete its landmark tower sale and leaseback deal by the end of 2024, with 88% of its tower portfolio already transferred to tower companies as of July, generating around PHP 85.2 billion in gross proceeds.
In line with its efforts to optimize capital deployment, Globe reduced its capital expenditures (capex) by 25% in the first half of 2024, as part of its goal to achieve positive cash flow by 2025.
The company invested PHP 23.8 billion during this period, marking a drop from the previous year and aligning with its sustainable capex strategy.
Rizza Maniego-Eala, Globe’s Chief Finance Officer, expressed optimism about the timeline for the sale’s completion. “We are aiming to complete 100% of our tower sale by this year. However, even if we only reach about 92% by December, we will still be on track,” Maniego-Eala said.
The sale, which began in 2022, has made significant strides throughout 2024. In June, Globe transferred an additional 48 towers to Phil-Tower Consortium, Inc. (PhilTower) for approximately PHP 710 million.
The company also handed over 140 towers to Miescor Infrastructure Development Corporation (MIDC) and 187 towers to Frontier Towers later in the month.
By July 23, Globe completed the transfer of 1,037 tower sites to Frontier Towers for PHP 13.17 billion, signaling the near conclusion of its tower sale program.
Globe President and CEO Ernest Cu emphasized the importance of shared infrastructure during his comments on President Ferdinand Marcos Jr.’s State of the Nation Address, stating that “shared tower cost and shared tower build reduces capex requirements for the telcos.”
Cu added that this strategy allows Globe and tower companies to collectively build more towers, further enhancing connectivity in the Philippines.
Globe’s financial outlook remains positive, with free cash flow turning positive in the second quarter of 2024, including proceeds from the tower sale.
“We expect the momentum coming from strong operating cash flows to continue through next year,” Maniego-Eala said, projecting sustained growth and profitability as Globe pushes towards achieving free cash flow positive results by 2025.
As part of its ongoing efforts, Globe aims to reduce its capex-to-revenue ratio to between 30% and 35% by the end of the year, down from 44% in 2023.
