Globe Telecom Inc

ATENEO GRADUATE SCHOOL OF BUSINESS
MBA STANDARD PROGRAM
STRATEGIC MANAGEMENT PAPER
ON
GLOBE TELECOMS INC.
Submitted to:
Professor Edgar Juan Surtida III, MBA
STRAMA S07 (SY 2014 – 2015)
Submitted by:
Molave Erik G. Nazaret
June 22, 2015
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Contents
I. EXECUTIVE SUMMARY ........................................................................................................ 6
II. COMPANY INTRODUCTION ............................................................................................. 7
1) AREAS OF OPERATIONS AND HEADQUARTERS ........................................................... 8
2) SHAREHOLDERS STRUCTURE ...................................................................................... 8
3) MANAGEMENT TEAM ................................................................................................. 9
4) CONGLOMERATE MAP AND SUBSIDIARIES ............................................................... 10
5) SIZE IN 2014 REVENUES ............................................................................................ 12
6) NUMBER OF EMPLOYEES .......................................................................................... 12
7) MARKETS COVERED .................................................................................................. 13
8) MARKET POSITION AND MARKET SHARE.................................................................. 13
9) PRODUCTS AND SERVICES PORTFOLIO ..................................................................... 15
10) DISTRIBUTION STRATEGY AND CHANNEL PARTNERS ............................................... 16
III. RESEARCH DESIGN AND METHODOLOGY ..................................................................... 17
IV. CORPORATE VISION, MISSION AND CORE VALUES....................................................... 18
1) VISION, MISSION STATEMENT & CORE VALUES OF GLOBE TELECOMS .................... 18
2) EVALUATION OF GLOBE TELECOMS VISION STATEMENT ......................................... 19
3) EVALUATION OF GLOBE TELECOMS MISSION STATEMENT AND CORE VALUES ...... 20
V. EXTERNAL ANALYSIS...................................................................................................... 21
1) MACRO ENVIRONMENTAL ANALYSIS........................................................................ 21
i. ECONOMIC FACTORS ................................................................................................ 21
ii. SOCIAL / CULTURAL FACTORS ................................................................................... 33
iii. POLITICAL / LEGAL FACTORS ................................................................................. 41
iv. ENVIRONMENTAL FACTORS .................................................................................. 45
v. TECHNOLOGICAL FACTORS ....................................................................................... 46
2) INDUSTRY AND COMPETITOR ANALYSIS ................................................................... 50
vi. PORTER’S FIVE FORCES ......................................................................................... 51
vii. INDUSTRY VALUE CHAIN AND WATERFALL CHART............................................... 56
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viii. STRATEGIC POSITIONING ...................................................................................... 58
ix. MARKET SIZE, SHARE AND GROWTH TRENDS ...................................................... 61
x. MARKET ANALYSIS .................................................................................................... 64
xi. MARKET FORECAST ............................................................................................... 79
VI. COMPARATIVE PROFILE MATRIX (CPM) ....................................................................... 83
1) CRITICAL SUCCESS FACTORS ..................................................................................... 84
2) BENCHMARKING VERSUS KEY COMPETITORS .......................................................... 87
3) COMPARATIVE PROFILE MATRIX .............................................................................. 92
4) CONCLUSION ............................................................................................................. 93
VII. EXTERNAL FACTOR EVALUATION (EFE) ......................................................................... 93
1) OPPORTUNITIES AND CORRESPONDING IMPORTANCE WEIGHTS ........................... 93
2) THREATS AND CORRESPONDING IMPORTANCE WEIGHTS ....................................... 96
3) OPPORTUNITIES AND COMPANY RESPONSIVENESS................................................. 98
4) THREATS AND COMPANY RESPONSIVENESS .......................................................... 100
5) EFE MATRIX ............................................................................................................. 102
6) SUMMARY AND CONCLUSION ................................................................................ 103
VIII. INTERNAL FACTORS..................................................................................................... 103
1) MCKINSEY’S 7S FRAMEWORK ................................................................................. 103
i. STRATEGY ................................................................................................................ 103
ii. STRUCTURE ............................................................................................................. 105
iii. SYSTEMS .............................................................................................................. 107
iv. STYLE ................................................................................................................... 110
v. STAFF ....................................................................................................................... 110
vi. SKILLS .................................................................................................................. 111
vii. SHARED VALUES .................................................................................................. 113
2) COMPANY INTERNAL AUDIT ................................................................................... 114
i. MANAGEMENT AUDIT ............................................................................................ 114
ii. MARKETING AUDIT ................................................................................................. 115
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iii. FINANCE / ACCOUNTING AUDIT ......................................................................... 117
iv. OPERATIONS AUDIT ............................................................................................ 117
v. RESEARCH AND DEVELOPMENT AUDIT .................................................................. 118
vi. COMPUTER INFORMATION SYSTEMS AUDIT ...................................................... 119
3) KEY FINANCIAL ANALYSIS ........................................................................................ 120
i. GLOBE TELECOMS SALES ANALYSIS BY PRODUCT .................................................. 120
ii. GLOBE TELECOMS SALES ANALYSIS BY SEGMENTS ................................................ 122
iii. GLOBE TELECOMS GROSS PROFIT ANALYSIS ...................................................... 124
iv. GLOBE TELECOMS OPERATING EXPENSE ANALYSIS............................................ 126
v. LIQUIDITY RATIOS ................................................................................................... 128
vi. LEVERAGE RATIOS ............................................................................................... 129
vii. ACTIVITY RATIOS ................................................................................................. 130
viii. PROFITABILTIY RATIOS ........................................................................................ 131
ix. GROWTH RATIOS ................................................................................................ 133
IX. INTERNAL FACTOR EVALUATION (IFE) ........................................................................ 134
1) STRENGTHS AND IMPORTANCE WEIGHT................................................................ 134
2) WEAKNESSES AND IMPORTANCE WEIGHT ............................................................. 135
3) STRENGHTS AND COMPANY RATINGS .................................................................... 137
4) WEAKNESSES AND COMPANY RATINGS ................................................................. 138
5) INTERNAL FACTOR EVALUATION (IFE) MATRIX ...................................................... 139
6) CONCLUSION ........................................................................................................... 140
X. STRATEGY FORMULATION .......................................................................................... 141
1) STRENGTHS, WEAKNESSES, OPPORTUNITIES, THREATS (SWOT) MATRIX .............. 141
2) STRATEGIC POSITIONING AND ACTION EVALUATION (SPACE) MATRIX ................. 147
3) BOSTON CONSULTING GROUP (BCG) MATRIX ........................................................ 149
4) GE MCKINSEY MATRIX ............................................................................................ 150
5) GRAND STRATEGY MATRIX ..................................................................................... 153
6) IE MATRIX ................................................................................................................ 154
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7) SUMMARY OF STATEGIES ....................................................................................... 155
8) QUANTITATIVE STRATEGIC PLANNING MATRIX (QSPM) ........................................ 155
XI. CORPORATE OBJECTIVES, STRATEGIES, RECOMMENDATION AND ACTION PLAN ..... 156
1) RECOMMENDED COMPANY VISION STATEMENT................................................... 156
2) RECOMMENDED COMPANY MISSION STATEMENT................................................ 157
3) RECOMMENDED STRATEGIC OBJECTIVES ............................................................... 158
4) RECOMMENDED STRATEGIES ................................................................................. 160
5) RECOMMENDED DEPARTMENTAL PROGRAMS AND ACTIONS .............................. 164
6) FINANCIAL PROJECTIONS ........................................................................................ 167
XII. STRATEGY IMPLEMENTATION, EVALUATION, MONITORING AND CONTROL ............ 175
1) RECOMMENDED BALANCE SCORECARD ................................................................. 175
i. STRATEGY MAP ....................................................................................................... 175
ii. OBJECTIVES AND INITIATIVES MATRIX.................................................................... 177
iii. PERFORMANCE MONITORING DASHBOARD ...................................................... 178
2) CONTINGENCY PLAN ............................................................................................... 180
XIII. APPENDIX .................................................................................................................... 182
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I. EXECUTIVE SUMMARY
Globe Telecoms is one of the two biggest telecommunication companies in the

Philippines. The company is one of the pioneers in the GSM, 3G and LTE technologies in
the country. Currently, the company ranks 2nd in terms of total assets, revenues and number
of subscribers in the telecommunication industry in the country. The company also offers a
wide array of products and services to its subscribers under one brand; this includes mobile
voice and data, SMS, fixed-line voice and data, and broadband.
The telecommunication industry in the Philippines is capital intensive and is highly

regulated by the government, various fees and licenses are needed in order to operate. This
makes it hard for new players to enter the said industry. This kind of business environment
creates a duopolistic structure in the telecommunication industry in the country. Also, the
current good fiscal environment in the country coupled by the strong growth of internet
usage makes the telecommunication industry in the Philippines an attractive industry to
invest in even if the products and services which were major contributors to the past
revenues of the industry are either already slowing down or in decline. Globe Telecoms is
one of the two big players in the telecommunication industry in the Philippines. Due to those
factors, the company got an EFE rating of 2.66.
When it comes to critical factors to succeed in the telecommunication industry in the

Philippines, the most important factors that were identified were the reliability of the products
and service the telecommunication players provide and the degree of customer satisfaction
their subscribers have. This is where almost all the telecommunication players, including
Globe Telecoms, lagged on. Getting those factors right will surely spell success for a
telecommunication company. But due to the better financial standing of the company
compared to other smaller players, wide market reach, modern products and services and
an effective and wide reaching marketing, the company still got a satisfactory score in CPM
of 2.73.
When it comes to the internal capabilities of Globe Telecoms, one of the critical
factors that was noted was the company lacks customer service training to its employees
and high corporate hierarchy which somewhat explains the low customer satisfaction its
customers are getting and the slow decision making of the company’s management. Globe
Telecoms must improve on this together with network speed and reliability wherein the
company, and other major telecommunication industry players, is lagging compared to its
ASEAN counterparts. But on a positive note, Globe Telecoms has a wide subscriber base
and the top brand when it comes to the lucrative mobile postpaid segment of the industry.
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These factors, coupled with modern products and services being offered to its customers,
enabled the company to get a satisfactory rating of 2.45 in IFE.
Finally, upon studying the said factors, both external and internal, the proposed
overall strategic objective for Globe Telecoms will be to gain leadership on the key areas of
the telecommunication industry that offer strong growth potentials namely mobile data,
broadband and the postpaid segment of the industry. The key strategies that can be
implemented are investing on improvement on quality of the said key growth areas by
improving the speed, capacity and reliability of the core network, improve customer
satisfaction by minimizing corporate hierarchy, increase management visibility and putting
clear procedures in dealing with customer issues and finally, training and hiring new
employees with customer service skills.
II. COMPANY INTRODUCTION
Globe Telecoms is a major provider of telecommunication services in the Philippines,

it has a wide array of telecommunication products and services that it offers to its customers.
The company is also one of the pioneers, not just in the Philippines but also worldwide, of
cashless mobile payment and remittance services via its GCash brand. This wide range of
products and services being offered by the company is supported by a workforce of around
6,200 employees not just in the Philippines but also overseas, through regional overseas
branches and global partners. And also, to supplement this workforce, Globe Telecoms have
over 967,000 networks of different suppliers, retailers, distributors and business partners all
over the Philippines.1
Globe Telecoms also operates one of the biggest and most technologically advanced
telecommunication networks in the Philippines, with services ranging from the fixed line,
wireless and the latest broadband network technologies. As of the latest annual report of
Globe Telecoms, they currently has over 40 million subscribers of mobile products and
services which is roughly around 40 percent of The Philippines population, and over
2,700,000 subscribers of broadband products and services and also around 700,000
subscribers of its fixed-line and landline services.
Globe Telecoms is also a recipient of various licenses and service authorizations

from the National Telecommunications Commission that adds to the assets and goodwill
1
Globe 2014 Annual Report
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accounts of the company’s balance sheets. Here are a few of the licenses the company
receives.
 License to offer and operate facsimile, other traditional voice

and data services and domestic line service using Very Small
Aperture Terminal (VSAT) technology
 License for inter-exchange services
 Certificate of Public Convenience and Necessity (CPCN) for
the following:
i. International digital gateway facility (IGF) in Metro Manila

ii. Nationwide digital cellular mobile telephone system under
the GSM standard (CMTSGSM)
iii. Nationwide local exchange carrier (LEC) services after
being granted a provisional authority in June 2005
iv. International cable landing stations located in Nasugbu,
Batangas and Ballesteros, Cagayan 2
1) AREAS OF OPERATIONS AND HEADQUARTERS
The principal headquarters of Globe Telecoms is located at the 32nd Street corner 7th
Avenue, Bonifacio Global City, Taguig, Metro Manila, Philippines.3 They also have various
offices, data centers and cell sites located in different city centers and remote locations all
around the Philippines. As of the latest update on the corporate website, the company has
over 6,227 cell sites deployed all around the Philippines.4
2) SHAREHOLDERS STRUCTURE
Globe Telecom’s principal controlling shareholders are Ayala Corporation, which has
around 30.4% stake on the company’s common shares, and Singapore Telecommunications
Inc., which owns around 47.2% of the company’s common shares. The remaining common
shares of the company which is roughly around 22.4% is held by different public investors.
Also 100% of the company’s issued preferred shares is currently owned by Asiacom
2
3
http://www.pse.com.ph/stockMarket/companyInfo.html?id=69&security=127&tab=0
4
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Philippines Inc., a subsidiary of Ayala Corporation. Below is a table of the company’s
shareholders structure.
% of % of % of
Stockholders Common Preferred Total
Common Preferred Total
Ayala
40,351,591 30.40% - - 40,351,591 13.90%
Corporation
Singtel 62,646,487 47.20% - - 62,646,487 21.50%
Asiacom - - 158,515,021 100% 158,515,021 54.50%
Public 29,732,500 22.40% - - 29,732,500 10.20%
Total 132,730,578 100% 158,515,021 100% 291,248,111 100%
SOURCE: http://www.globe.com.ph/corporate-governance/shareholding-structure
3) MANAGEMENT TEAM
Below are tables of Globe Telecom’s management team and their respective
positions in the company.
Board of Directors:
Name Position
Jaime Augusto Zobel de Ayala Chairman
Gerardo C. Ablaza, Jr. Co-Vice Chairman
Mark Chong Chin Kok Co-Vice Chairman
Ernest Cu Director, President and CEO
Delfin L. Lazaro Director
Samba Natarajan Director
Remeo L. Bernardo Director
Fernando Zobel de Ayala Director
Rex Ma. A. Mendoza Independent Director
Manuel A. Pacis Independent Director
Saw Phaik Hwa Independent Director
SOURCE: http://www.globe.com.ph/corporate-governance/board-of-directors
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Key Officers:
Name Position
Ernest L. Cu President and Chief Executive Officer
Alberto M. de Larrazabal Chief Finance Office & Chief Risk Officer
Chief Operating Officer for Business and International Markets

Gil B. Genio Chief Strategy Officer
President, Innove Communications, Inc.
Renato M. Jiao Chief Human Resource Officer
Rebecca V. Eclipse Chief Customer Experience Officer
Henry Rhoel R. Aguda Chief Information Officer

Vicente Froilan M. Castelo General Counsel
Carmina J. Herbosa Chief Audit Executive
Bernard P. Llamzon EVP, Consumer Sales
Solomon M. Hermosura Corporate Secretary
Compliance Officer, Assistant Corporate Secretary and VP,

Marisalve Ciocson-Co
Legal Services
SOURCE: http://www.globe.com.ph/corporate-governance/key-officers
Key Consultants:
Name Position
Daniel James Horan Senior Advisor for Consumer Business
Rodolfo A. Salalima Chief Legal Counsel and Senior Advisor

Robert Tan Chief Technical Advisor
SOURCE: http://www.globe.com.ph/corporate-governance/key-officers
4) CONGLOMERATE MAP AND SUBSIDIARIES
Below is the conglomerate map of Globe Telecoms and the list of their respective
subsidiaries:
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SOURCE: http://www.globe.com.ph/corporate-governance/conglomerate-map
 Globe Telecom Inc. – The main corporate entity of the

conglomerate. It is the one that provides mobile
telecommunication products and services.
 Innove Communications Inc. – The corporate entity of the
conglomerate that handles all fixed line, broadband, high-
speed internet, private data network services for big enterprise
clients and multimedia content delivery products and services.
 G-Xchange Inc. – The corporate entity of the conglomerate
that handles the mobile commerce and remittance services of
the conglomerate under the GCash brand.
 Entertainment Gateway Group Corp. – The corporate entity of
the conglomerate that handles the development of products
and services for mobile phones and other forms of wireless
communication devices. They are also the one that handles
internet and mobile value added services, software
development and information technology related services.
 GTI Business Holdings Inc. – The holding company of the
conglomerate that handles all its overseas holdings and
subsidiaries.
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 Kickstart Ventures Inc. – The venture capital arm of the
conglomerate that acts as a business incubator for aspiring
technopreneurs.
 Asticom Technology Inc, – Formerly known as Ayala Systems
Technology Inc. It is the part of the conglomerate that develops
ERP and CRM business systems, complex integration projects
and imaged-based systems for the company’s business and
government clients.5
5) SIZE IN 2014 REVENUES
Globe Telecoms is also one of the biggest and most profitable companies in the
Philippines. The company is currently listed in the Philippine Stock Exchange with the stock
ticker symbol of GLO. The company also has been consistently recognized, not just locally
but also internationally, for the good corporate governance the company practices. Below
are the company’s key financial performances as of December 2014.
 Market Capitalization of USD$5.1 billion.

 Consolidated Service Revenue of Php99.02 billion.
 Total Net Operating Revenues of Php103.23 billion.
 Consolidated EBITDA of Php39.3 billion.6
6) NUMBER OF EMPLOYEES
Listed below is a table of Globe Telecom employees and their respective

employment type for the previous 4 years:
Employment Type 2014 2013 2012 2011

Rank & File 2,347 2,365 2,596 2,812
Supervisory 2,167 2,074 1,877 1,714
Managerial 1,239 1,131 1,034 920
Executives 429 417 365 311
Total 6,182 5,987 5,872 5,757
5
6
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7) MARKETS COVERED
Globe Telecoms Inc. provides the following products and services to its various
business, institutions and individual customers:
 Mobile products and services – These are the products and

service that telecommunication companies offer that enables you
to speak, send SMS and browse, send and receive data to another
person or the web using your mobile phone.
 Fixed line products and services – These are the products and
service that telecommunication companies offer that lets you
speak and/or send/receive data (eg. Photos, music, internet, etc)
to another person or the internet using a handset located on a
fixed location.
 Broadband Network Technologies – These are the products and
service that telecommunication companies offer that lets you
send/receive data (eg. Photos, music, internet, etc) on a fixed
and/or a mobile location using your mobile phone or internet
device. This service also has higher speed and bandwidth
capabilities compared to mobile data.
8) MARKET POSITION AND MARKET SHARE
As of December 2014, Globe Telecoms has around 44,040,844 mobile subscribers,

762,181 fixed line subscribers and 2,788,123 broadband subscribers. Below are graph
comparisons of the company’s subscriber against its key competitor:
Mobile Subscriber Base

80,000,000
70,000,000
60,000,000
50,000,000
40,000,000
30,000,000
20,000,000
10,000,000
0
Globe PLDT
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Fixed Line Subscriber Base
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
Globe PLDT
Broadband Subscriber Base

3,050,000
3,000,000
2,950,000
2,900,000
2,850,000
2,800,000
2,750,000
2,700,000
2,650,000
Globe PLDT
Total Subscriber Base

80,000,000
70,000,000
60,000,000
50,000,000
40,000,000
30,000,000
20,000,000
10,000,000
0
Globe PLDT
SOURCE: PLDT and Globe 2014 annual report
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9) PRODUCTS AND SERVICES PORTFOLIO
Globe Telecoms offer the following products and services to its customers:
 Mobile Voice - Mobile voice are the service that telecommunication

companies offer that enables you to speak to another person using
your mobile phone.
 SMS - SMS are the service telecommunication that companies offer
that enables you to send text messages to another person using your
mobile phone.
 Mobile Data - Mobile data are the service that telecommunication
companies offer that enables you to send/receive data (eg. Photos,
music, internet, etc) on your mobile phone up to a certain speed.
 Fixed-line Voice - Fixed-line voice are the service that
telecommunication companies offer that lets you speak to another
person using a handset located on a fixed location.
 Fixed-line Data - Fixed-line data are the service that
telecommunication companies offer that lets you send /receive data
(eg. Photos, music, internet, etc) on your computer or mobile devices
on a fixed location.
 Broadband - Broadband are the service that telecommunication
companies offer that lets you send/receive data (eg. Photos, music,
internet, etc) on a fixed and/or a mobile location using your mobile
phone or internet device. This service also has higher speed and
bandwidth capabilities compared to mobile data.
Listed below are tables and chart representations of the company’s revenue per
product in the last 4 years:
% of % of % of % of
(in Php Millions) 2014 total 2013 total 2012 total 2011 total
Mobile Voice 34,684 34% 32,367 34% 32,446 38% 30,909 38%
SMS 29,079 28% 28,794 30% 26,552 31% 27,727 34%
Mobile Browsing and
Other Data 14,306 14% 11,603 12% 8,191 9% 4,902 6%
Total Mobile
Revenue 78,069 76% 72,764 76% 67,189 78% 63,538 78%
Fixed Line Data 5,480 5% 4,691 5% 4,167 5% 3,792 5%
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Fixed Line Voice 2,789 3% 2,605 3% 2,665 3% 2,939 4%
Total Fixed Line 8,269 8% 7,296 8% 6,832 8% 6,731 8%
Total Broadband 12,687 12% 10,440 11% 8,721 10% 7,496 9%
Total Service
Revenue 99,025 96% 90,500 95% 82,742 96% 77,765 95%
Non Service
Revenue 4,211 4% 4,641 5% 3,704 4% 3,753 5%
Total Operating
Revenue 103,236 100% 95,141 100% 86,446 100% 81,518 100%
SOURCE: Globe 2014 Annual Report
4%
12%
8%
Total Mobile Revenue
Total Fixed Line Revenue
76% Total Broadband Revenue

Non Service Revenue
SOURCE: Globe 2014 Annual Report
10) DISTRIBUTION STRATEGY AND CHANNEL PARTNERS
Globe Telecoms has over 967,000 networks of different suppliers, retailers,

distributors and business partners all over the Philippines. Listed below are the company’s
channel partners that enable them to deliver its products and services anytime, anywhere:
 Independent Dealers – located all throughout the Philippines to sell

and distribute wireless prepaid services to their own retail network but
not directly to the customers. This network includes major distributors
of wireless phone handsets, direct sales force and sub-dealers.
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 Globe Stores – The company has over 211 Globe Stores all over the
Philippines. This is a one stop shop where customers can inquire, pay
and subscribe to all of the company’s products and services except for
prepaid services. This is also where customers can transact
remittance services via the company’s GCash brand.
 Customer Facing Units – The one that is in charge with big individual
retail customers, businesses and voice and roaming needs of the
company’s OFW clients.
 Others – This are the prepaid retailers that varies from convenience
and sari-sari stores, restaurants and even street vendors that enables
the company’s prepaid clients reach products and services of the
company anytime, anywhere.7
Below is a visual representation of Globe Telecom’s distribution strategy and their

channel partners:
SOURCE: Globe 2014 annual report
III. RESEARCH DESIGN AND METHODOLOGY
Various references and resource materials was used in doing this strategic
management paper, the writer made sure that all the resources of data came from credible
and reliable sources. For the company introduction part, the major sources are the following.
7
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Globe 2014 Annual Report PLDT 2014 Annual Report
www.globe.com.ph
For the Macro environment part of the paper the major sources of data are listed below.
www.rappler.com www.moodys.com
www.bworldonline.com www.ibpap.org
www.philstar.com www.tradingeconomics.com
www.cnnphilippines.com www.bsp.gov.ph
web0.psa.gov.ph www.nscb.gov.ph
www.census.gov.ph www.portal.euromonitor.com
www.gmanetwork.com http://asia.nikkei.com
www.interaksyon.com http://treasury.worldbank.org
www.businessinsider.com www.digitaltrends.com
www2.deloitte.com
For the industry analysis part, the major sources of data are the following.
Globe 2014 annual report PLDT 2014 annual report

www.interaksyon.com www.easterncommunications.com.ph
portal.euromonitor.com www.telecompaper.com
bmo.businessmonitor.com mobileworldlive.com
Liberty Telecoms 2014 Annual report www.globe.com.ph
www.smart.com.ph www.suncellular.com.ph
www.pldt.com.ph http://opensignal.com
www.techinasia.com manilastandardtoday.com
For the company analysis part, the major sources of data are the following.
Globe 2014 annual report www.globe.com.ph

www.businessmirror.com.ph www.techinasia.com
And finally, the major source of data for the whole study is the book Strategic
Management Concepts and Cases 13th Edition by Fred David.
IV. CORPORATE VISION, MISSION AND CORE VALUES
1) VISION, MISSION STATEMENT & CORE VALUES OF GLOBE TELECOMS
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Vision Statement:
“ The happiest customers, employees and shareholders.”
Mission Statement:
“ We create a wonderful world for people, business and the nation.”
Core Values:
 We put our customers first
 Our people makes the difference
 We act with integrity
 We care like an owner
 We keep things simple
 To us, it’s be fast or be last8
2) EVALUATION OF GLOBE TELECOMS VISION STATEMENT
“ The happiest customers, employees and shareholders.”
Globe Telecom’s vision statement focuses on creating a better and wonderful world
to everyone in the Philippines which seems to be quite broad and vivid in a sense that it
does not say what kind of wonderful thing the company wants to provide to the nation. The
said vision statement might be inspirational and changes the way things are to something
better but it seems to be not clear as to what aspiration it wishes to achieve which might
confuse the company’s stakeholders as different shareholders has a different way and level
of what the word wonderful really means to them.
Parameter Yes / No Why
Does it clearly answer NO Globe Telecom’s Vision statement is quite vague and vivid in a
the question: What do sense that they do not say how they are going to make their
we want to become? stakeholders happy. This is quite important because different
stakeholders have different wants and levels of happiness.
8
http://www.globe.com.ph/corporate-governance/vision-mission-values
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Is it concise enough yet YES In a sense it is inspirational because it provides hope to every
inspirational? stakeholder that Globe Telecoms will make them happy but it is not
concise because the said vision statement does not state how and
what kind of happiness the company will provide to them.
Is it aspirational? YES Globe Telecoms Vision statement states that the company will
make the current status quo into something better and
subsequently will make its respective stakeholders happy.
Does it give clear NO Globe Telecoms does not provide a detailed or even any kind of
indication as to when it timeline in its vision statement.
should be attained?
3) EVALUATION OF GLOBE TELECOMS MISSION STATEMENT AND CORE VALUES
“ We create a wonderful world for people, business and the nation.”
Core Values:
We put our customers first
Our people makes the difference
We act with integrity
We care like an owner
We keep things simple
To us, it’s be fast or be last
Globe Telecom’s mission statement and core values lack critical components and
does not mention anything about what kind of products and services it will offer to its
customers, The kind of technology it will offer, The way it wants to treat its employees and
they way it will contribute to nation building. The way it delivers its mission statement
specifically by using the word “wonderful” is quite broad.
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Parameter Yes / No If yes, which part of the statement
1. Customers YES People, business and the nation

2. Products & services NO N/A
3. Markets YES The nation
4. Technology NO N/A
5. Concern for survival, YES
growth, profitability We care like an owner
6. Philosophy YES Our people makes the difference

To us, it’s be fast or be last
7. Self-concept YES We put our customers first
We act with integrity
We care like an owner
We keep things simple
8. Concern for NO
N/A
employees
9. Concern for nation NO
N/A
building
V. EXTERNAL ANALYSIS
1) MACRO ENVIRONMENTAL ANALYSIS
These are the external factors that can affect, not just the telecommunication
industry, but all industries in a given country. There are lots of factors that can have either
minimal or huge impact on another given industry but might have minimal impact on the
telecommunication industry. Listed below are the factors that were determined to have a
significant impact on the telecommunication industry in the Philippines.
i. ECONOMIC FACTORS
GROWTH OF THE PHILIPPINES GDP
21 | P a g e
The Philippines GDP grew by 6.1% in 2014, this rate is lower than the government’s
target for 2014 but this growth rate is still one of the fastest in the Asian region, next only to
china.9 Below is a table of the key contributors to the Philippines GDP.
9
http://www.rappler.com/business/economy-watch/82268-philippines-gdp-q4-2014
22 | P a g e
As seen on the table, the key contributors to the Philippine GDP growth are the
industry sector, more specifically manufacturing and construction, and the service sector,
which led by real estate, renting and business activities. In terms of type of expenditure, the
main contributors to GDP growth are household consumption and exports.
The Philippine GDP is still forecasted to have one of the strongest growth rate
expansions in the world in the coming years. This strong GDP growth rate is expected to
average around 7% to 8% per year from 2015 until 2018. 10
RELEVANCE TO THE ENTERPRISE
As the country’s GDP continues to grow, this will create more jobs which will give
more purchasing power to the consumers, which subsequently will enable them to spend
more which will spur the profits of the telecommunication companies. Also, growth in the
Philippine GDP will also spur the growth of new and existing businesses in the country. And
this new businesses will spur the demand for the telecommunication products and services
of the telecommunications industry offer these businesses.
GROWTH OF BUSINESSES IN THE PHILIPPINES SPECIFICALLY THE BPO INDUSTRY
As the Philippine GDP continues to rise, so does businesses in the country. One of
the key contributor to this grow is the country’s Business Process Outsourcing (BPO)
industry. This industry alone posted a 26% growth in 2014 generating $9 billion in export
earnings for the Philippines. The BPO industry also has a 5% share in the Philippines GDP.
World Bank estimates that this industry is still forecasted to post strong growth in the future
and is expected to give the Philippines future export earnings of up to $55 billion by 2020. 11
Below is a graphical chart of the Philippines BPO industry.
10
http://www.bworldonline.com/content.php?section=Economy&title=bsp-says-7-8-growth-
doable&id=108132
11
http://www.ibpap.org/media-room/214-the-phil-better-business-process-outsourcing
23 | P a g e
Most of the country’s BPO industry requires various telecommunication services to

enable them to the constantly communicate to their various local and foreign stakeholders.
Growth of this industry will subsequently provide growth in the demand of telecommunication
industry’s products and services.
FOREIGN EXCHANGE FACTORS
The Philippine Peso continues to remain stable staying at the range of 43 to 45.50
peso against the US dollar in 2014 despite increasing volatility of currencies abroad due to a
myriad of factors such as slowing economies of 1st world countries, low interest rate regimes
of some countries and quantitative easing of big economies such as Japan, EU and United
States. One main factor that contributes to the stability of the Philippine Peso is the Banko
Sentral ng Pilipinas (BSP) high Gross International Reserve (GIR) which stands at around
$79.806 billion in December 2014. This level of GIR can cover roughly around 10.2 months
worth of the country’s total imports.
The main contributor to this high GIR is the BSP’s foreign exchange operations,
investments abroad, adjustments on its holdings of gold and the Philippine government’s net
foreign currency deposits. These facts led to the Philippine Peso appreciating by 1.4%
against the U.S. Dollar in 2014. These positive outlooks are still expected in 2015 and
24 | P a g e
2016.12 Below is a graph of the Philippines foreign exchange reserve from April 2014 to April
2015.
Most of the telecommunication companies in the Philippines have OFW’s and foreign
customers. Due to this, any changes in the exchange rate can greatly affect their business
revenues. Also, telecommunication companies needs to interconnect and partner to other
telecommunication companies overseas which makes them prone to foreign exchange rate
fluctuations. And finally, some telecommunication companies also have foreign currency
denominated loans that can greatly affect a company’s profitability if an adverse swing in
foreign exchange rate occurs.
INFLATIONARY FACTORS
The inflation level in the Philippines remains to be at a manageable level and well
within the forecasted range of the Banko Sentral ng Pilipinas (BSP) which is at 2% to 4% up
until 2018. This is already taking into account the falling global oil prices. The country’s
inflation rate slows to 2.4% in March 2015 from the February rate of 2.5%. The said rate is
lower compared to the 3.9% inflation rate in March of 2014. These rates brought the average
inflation figures for the first quarter of 2015 to 2.5%.13 Below are tables and graphs of the
country’s inflation figures in the previous years.
12
http://www.philstar.com/business/2015/01/08/1410479/forex-reserves-hit-79.8-b-dec
13
http://cnnphilippines.com/business/2015/04/08/inflation-settles-march-2015.html
25 | P a g e
SOURCE: http://census.gov.ph/content/summary-inflation-report-consumer-price-index-2006100-
december-2014
Year-on-Year Inflation Rates in the Philippines, All Items

January 2009 - December 2014
(2006=100)
Year
Month
2009 2010 2011 2012 2013 2014
January 7.1 3.9 4.0 4.0 3.1 4.2
February 7.2 3.9 4.7 2.7 3.4 4.1
March 6.7 3.9 4.9 2.6 3.2 3.9
April 5.6 4.0 4.7 3.0 2.6 4.1
May 4.3 3.9 4.9 3.0 2.6 4.5
June 3.2 3.6 5.2 2.9 2.7 4.4
26 | P a g e
Year-on-Year Inflation Rates in the Philippines, All Items
January 2009 - December 2014
(2006=100)
July 2.2 3.7 4.9 3.2 2.5 4.9
August 1.7 4.1 4.6 3.8 2.1 4.9
September 2.3 3.8 4.7 3.7 2.7 4.4
October 2.9 3.3 5.2 3.2 2.9 4.3
November 3.5 3.7 4.7 2.8 3.3 3.7
December 4.4 3.6 4.2 3.0 4.1 2.7
Average 4.2 3.8 4.6 3.2 3.0 4.1
SOURCE: http://census.gov.ph/content/summary-inflation-report-consumer-price-index-2006100-
december-2014
Inflationary increases in prices will add up to the costs of various telecommunication

equipments and day-to-day products being used in the telecommunication industry (eg. Oil,
electricity), which will subsequently increase the expenses incurred by various players in the
industry. This is critical given the fact that the prices of telecommunication products and
services rarely goes up and even pressured by various factors to go down.
INTEREST RATES
The Banko Sentral ng Pilipinas (BSP) is keen on keeping interest rates in the
Philippines steady amidst volatile global monetary policies from various foreign central banks
and falling crude oil prices. The monetary board maintains the policy rates for overnight
borrowings at 4% and overnight lending at 6% during its meeting at March 26, 2015.14
14
http://www.philstar.com/business/2015/05/02/1450088/inflation-seen-easing-further
27 | P a g e
Shown on the table below are the current borrowing rates of the Philippines top banks for the
period of April 20 to 24, 2015.
INTEREST RATES ON LOANS AND DISCOUNTS GRANTED

(For the period 20 - 24 April 2015)*
Short-term Medium-term Long-term
HIGH LOW HIGH LOW HIGH LOW
LOCAL BANKS:
1.Asia United Bank Corporation 13.0170 2.7500 18.0000 5.0000 18.0000 5.0510
2.Bank of Commerce 15.0000 2.0000 19.0870 5.2500 8.8800 6.2500
3.BDO Private Bank, Inc. 5.3500 5.3500
4.East West Banking Corp 11.3130 2.0000 19.5680 5.0000 17.9420 6.0000
5.Al-Amanah Islamic Inv Bnk of the Ph
6.Phil Bank of Communications 11.0000 2.0000 36.4000 7.0000 7.0000 7.0000

7.Phil Trust Company
8.Philippine Veterans Bank 20.2880 9.5000 21.0000 14.0000 6.0000 6.0000
9.Robinsons Bank Corporation 36.3140 3.1600 42.0130 6.0000 28.8760 6.2500

SUBSIDIARIES OF FOREIGN BANKS:
10.Chinatrust (Phils) Cbc 37.5400 2.7500 36.9800 7.0000 7.0000 5.5000
11.Maybank Philippines Inc 26.0870 2.4050 28.1160 7.5000 12.5160 6.0000

FOREIGN BANKS:
1.ANZ Banking Group Ltd 4.1500 1.7500
2.Bangkok Bank Public Co Ltd 3.0500 3.0500
3.Bank of America N.A.
4.The Bnk of Tokyo-Mitsubishi Ufj Ltd 7.0000 1.8000 7.0000 7.0000
5.JP Morgan Chase Bank National Assn.
6.Citibank, N.A. 4.9210 2.8680
7.Deutsche Bank Ag 5.4000 2.4000
8.Mizuho Corporate Bank Ltd 3.3500 0.5500
9.Hongkong & Shanghai Banking Corp 26.0000 2.9000 26.0000 4.9900 6.7500 6.4900
10.Internationale Nederlanden Groep Bk (Ing Bank) 3.7500 3.7500
11.Mega Int'L Comm'L Bank Co Ltd 7.5000 4.5000 3.2500 3.2500
12.Korea Exchange Bank
13.Standard Chartered Bank 16.2160 3.2500 41.9890 9.8090
14.Bank of China Limited
UBS:
1.BDO Unibank Inc 40.7320 1.5240 40.8880 3.0000 6.0000 2.7500

2.Bank of the Phil Islands 9.0000 2.0000 6.5000 3.9000 6.5000 3.3980
3.China Banking Corp 10.5000 3.0000 4.5000 4.5000 6.5000 6.5000
4.Development Bank of the Phil 15.8080 2.3000 18.6510 6.0000 15.8080 5.5000
5.Land Bank of the Philippines 15.0000 2.0000 14.0000 5.5000 9.0000 4.0000
6.Metropolitan Bank & TCO 14.0000 1.0000 11.2100 2.0840 10.7800 3.5000
28 | P a g e
7.Phil National Bank 12.0000 2.5000 10.0000 7.4000 8.0000 5.0000
8.Rizal Comm'L Banking Corp 10.7500 1.2500 9.5000 5.0000 9.0000 3.5000
9.Security Bank Corp 33.6400 2.3500 34.0100 5.0000 16.7510 3.5000
10.United Coconut Planters Bank 9.2820 4.3000 7.5000 6.7500
11.Union Bank of the Phils 13.5000 2.5000 20.8500 5.2500 12.0000 5.5000
*Cut-off day for banks' weekly report on interest rates for done transactions is Wednesday for Thursday submission to BSP.
n.t. no transaction
Notes:
1. Interest rates above refer to actual rate charged or paid for the use of money, expressed as an annual percentage of the principal.
2. Short-term interest rates refer to interest rates charged on loan contracts or debt instruments with maturity period of one year and below;
medium-term interest rates on loan contracts or debt instruments with maturity period of more than one year to five years; and long-term
interest rates on loan contracts or debt instruments with maturity period of more than five years.
3. Some banks charge lower interest rates on medium and long-term loans compared to short-term loans because the former are secured
by collaterals.
SOURCE: http://www.bsp.gov.ph/statistics/keystat/intrates.htm
The telecommunications industry is a capital extensive industry; it’s like a utility

industry that invests heavily on various infrastructures nationwide. The key difference is that
the prices of the industry’s products and services are pressured to go down, not like utility
companies. Also, the fast-changing telecommunication technologies are a major factor that
should always be considered. These changes in telecommunication technologies require
further capital to finance the said changes, and subsequent increase/decrease in interest
rate will greatly affect the capital allocation capabilities of the industry.
UNEMPLOYMENT RATE
As of January 2015, the unemployment rate in the Philippines stands at 6.6% a

decline from the 7.5% that the country registered in January 2014. This is the lowest
unemployment rate that the current administration achieved. The service sector of the
economy is the largest employer for the Philippines. The workers from the said sector made
up approximately around 54.6% of the country’s total work force. The agriculture sector is
the second biggest contributor; this sector employs roughly around 29.5% of the Philippines
workforce. Finally, the industry sector is the smallest contributor to the employment in the
Philippines. This sector employs 15.9% of the country’s labor workforce. Also, around 66%
of the unemployed persons in January 2015 were males, 47.3% were on the age group of 15
29 | P a g e
to 24 years old and 31.6% are from the 25 to 34 years old, 20.4% were unemployed college
graduates, 13% were college undergraduates and 34.4% were high school graduates. Below
is a table of the employment percentage in the country by sector of the economy.15
SOURCE:http://web0.psa.gov.ph/sites/default/files/attachments/hsd/pressrelease/TABLE%20
2%20Employed%20Persons%20by%20Major%20Industry%20Group%2C%20Industry%20Su
bsector%2C%20and%20Hours%20Worked%2C%20Philippines%20January%202014%20an
d%20January%202015.pdf
Unemployment rate greatly affects the purchasing power of individuals and a

decrease of unemployment rate will not only increase the purchasing power of subscribers of
the telecommunication companies, but also will enable them to subscribe to more products
and services offered by the telecommunication companies.
15
http://web0.psa.gov.ph/content/employment-rate-estimated-934-percent-january-2015
30 | P a g e
ASEAN ECONOMIC INTEGRATION
Although the actual economic integration has already started ever since the Asian
financial crisis in the 90s, concerns still persist on the official launch of the ASEAN Economic
Community (AEC) this year. Moody’s said that tariff liberalization at the end of 2015 will not
only boost the intra-trade and economic growth, it will also bring a positive credit rating for
the member states of ASEAN. Greater intra-regional trade is credit positive for the region
given that growth in other key export markets, such as China, is slowing. Also, the relative
strength of the intra- ASEAN trade, which is around 24.2% of the region’s total, will reduce
the ASEAN member state’s vulnerability to external shocks.
However, challenges such as lack of institutional capacity, intra-regional disparity and

domestic political issues can delay and hamper the full implementation of the ASEAN
economic integration.16
The ASEAN economic integration is a positive thing for the Philippine

telecommunication industry. For one, it will spur the Philippine economy to grow faster which
will subsequently increase the demand for telecommunication products and services. It is
also an opportunity to be able to further expand or partner with other telecommunications
market in the region. Also, the current telecommunication players in the country is somewhat
immune to the potential entry of new player as the licenses that needed to operate in the
Philippines was already taken up by the top players in the industry and due to limited
frequency resources available, they are able to guard the telecommunication industry from
potential new players.
Also, possible synergies and partnerships from other telecommunication players from
countries with better telecommunication products and services being offered to its customers
can be explored by local telecommunication players most especially small players to be able
to compete with larger players and to also improve the current poor state of the products and
services of the local telecommunication industry.
16
https://www.moodys.com/research/Moodys-ASEAN-economic-integration-is-credit-positive-but-
progress-is--PR_323663
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POWER OUTAGES AND ELECTRICITY PRICE HIKES
The Philippine energy secretary warned that there might be a power shortage in the
country in the early summer of 2015 as there is a very thin supply of electricity in the said
months. The said very thin supply of electricity is attributed to various factors such as delays
in the commissioning of various power projects in the country and the shutdown of the
Malampaya natural gas facility and other power plants due to preventive maintenance.17
If the said power outages and electricity price hikes occur, there can be an increase
in operating expenses of the telecommunication industry players as most of the industry’s
equipments are being run by electricity and scattered at various locations all over the
Philippines. Any power interruption might disrupt the normal operations of the said
equipments.
PHILIPPINE STOCK MARKET FLUCTUATIONS
The Philippine stock market index (PSEi) broke the 8,100 level in April 2015 breaking
past the index all-time high for the 27th time. The Philippine stock exchange now targets the
9,000 level and they are optimistic that the said levels can be breach due to the current good
economic conditions in the country which is shown by the strong corporate earnings of
businesses in the Philippines in the first quarter of 2015.18
The current strong performance of the Philippine stock market is a positive sign for
Globe Telecoms at the company is publicly listed and is also part of the Philippine stock
index. The current high premiums outside investors are putting to the Philippine stock market
is positive for the company as they can easily get additional funds via issuance of new
shares of stock to the stock market to finance the company’s financial needs at high
premiums.
17
http://www.philstar.com/opinion/2015/02/25/1427338/power-crisis-now-upon-us
18
http://www.bworldonline.com/content.php?section=StockMarket&title=Shares%27-rally-cut-short-
as-investors-pocket-gains&id=108196
32 | P a g e
ii. SOCIAL / CULTURAL FACTORS
POPULATION GROWTH
The Philippines is one of the countries with the biggest population in the world. In
2014, the country ranked 12th in the world, the 7th in Asia and 2nd in ASEAN.19 The Philippine
census forecasted that by year 2020, the country’s population will be around 111 million
giving it an annual growth rate of 1.64% from 2015 to 2020. Furthermore, it is expected that
by the year 2045, the country’s population will be around 142 million.
Also in 2010, only around 6.7% of the Philippines’ total population was aged 60 years
old and above. The said age group is forecasted to make up roughly around 10% of the
country’s population by 2025. Conversely, children with an age of 14 years old and below
are forecasted to fall from one third of the total population in 2010 to one fifth by 2045. Below
is a table of the forecasted population growth of the Philippines in a five year interval from
2000 up to 2040.20
Year Both Sexes Male Female
2000 76,946,500 38,748,500 38,198,000
2005 85,261,000 42,887,300 42,373,700
2010 94,013,200 47,263,600 46,749,600
2015 102,965,300 51,733,400 51,231,900
2020 111,784,600 56,123,600 55,661,000
2025 120,224,500 60,311,700 59,912,800
2030 128,110,000 64,203,600 63,906,400
2035 135,301,100 67,741,300 67,559,800
2040 141,669,900 70,871,100 70,798,800
SOURCE: http://www.nscb.gov.ph/secstat/d_popnProj.asp
Growth in the Philippine general population is a good sign not just for Globe
Telecoms but for the whole telecommunication industry as this growth translates to addition
in potential future subscribers for the industry, and subsequently an increase in the demand
for products and services offered by telecommunication players.
19
http://www.pcw.gov.ph/statistics/201405/population-families-and-household-statistics
20
http://census.gov.ph/content/142-million-philippine-population-2045
33 | P a g e
MEDIAN AGE OF THE PHILIPPINE POPULATION
The Philippines has a relatively young median age in its population. In 2010, it is
estimated to be around 23.4 years of age, the third youngest in the ASEAN region. Around
33% of the populations are under 15 years old. The said young median age of the country’s
populations is still forecasted to continue in the future. The United Nations estimates that by
year 2030 the median age of the Philippines will be around 29 years of age and by 2050 it
will be around 35 years old. Most importantly, the country’s working age population, or those
between 15 years old and 49 years old, will make up around 67.5% of the country’s total
population by 2045. Below is a table comparing the Philippines median age against other
ASEAN neighbor countries.21
The young and working-age majority of the Philippine population is a positive sign
not just for Globe Telecoms but also to the whole Philippine economy as it means more of
the country’s population will be able to work and add to the country’s total output revenues
and subsequently, a growth in the purchasing power of the country’s population. And given
that the products and services of the telecommunication industry is now becoming a
necessity, this will subsequently increase the demand for the industry’s products and
services. Also, it is important to note that a young population is more prone to be tech-savvy,
21
http://www.nscb.gov.ph/beyondthenumbers/2012/11162012_jrga_popn.asp
34 | P a g e
and a more tech-savvy population will subsequently increase the demand of various
telecommunication products and services.
GROWTH OF THE FILIPINO MIDDLE CLASS
The Filipino middle class, or Filipinos who’s annual gross income is in the range of
Php64,317.00 to Php787,572.00, took up around 4.66 million families or roughly around 25%
of the Philippines total population in 2013.22
Due to the high GDP growth rate of the country, strong BPO growth forecast, and the
growing remittance from OFW, the Filipino middle class population is expected to grow in the
coming years and the net disposable income of the said group will also increase. Below is a
graphical presentation of the forecasted growth in the disposable incomes per household in
2018 of the new emerging markets, including the Philippines.23
SOURCE: http://www.portal.euromonitor.com/portal/analysis/tab
The growth of the country’s middle class population, and subsequently its disposable
income, will equate to a decrease the country's poverty, which will further increase the
22
http://www.rappler.com/thought-leaders/65114-filipino-middle-class-over-taxed
23
http://www.portal.euromonitor.com/portal/analysis/tab
35 | P a g e
purchasing power of the population. And given that the products and services of the
telecommunication industry is now becoming a necessity, this will also translate to growth in
its demand.
GROWTH OF THE FILIPINO OFW POPULATION AND REMITTANCE
The number of Filipinos going abroad has been constantly increasing in the past 30
years. The said numbers grew from around 36,000 in 1975 to 1.8 million in 2012 posting a
CAGR of 14%. The 2012 data from the Philippine Overseas Employment Administration
(POEA) shows that most of the OFWs were domestic helpers. Below are the lists of the top
OFWs by occupational category.
 Domestic Workers – 222,260

 Factory Workers – 146,448
 Professional and technical workers (eg. Nurses, Singers) – 54,617
 Clerical Workers – 13,893
 Sales Workers – 9,346
 Administrative and Managerial Positions – 3,241
 Agriculture – 1,563
Also, the 2012 data shows that Saudi Arabia is still the top country of destination for
Filipino OFWs gaining 24.4% of the total OFW population. Below are the top countries of
destination of Filipino OFWs.
 Saudi Arabia – 24.4%

 UAE – 18.8%
 Singapore – 10.2%
 Hong Kong – 7.9%
 Qatar – 7.8%
Another important information shown by the POEA report is the significant increase
in the number of Filipino seafarers, which increased by 75% in the past decade. Currently,
Filipinos composes around 20% to 25% of the world’s total international seafarer crew. 24
24
http://www.rappler.com/nation/32361-ph-migration-report-ofws
36 | P a g e
When it comes to remittances being sent by OFWs to the Philippines, the total
remittance rose by 6.2% from its 2013 levels of $25.351 billion to $26.924 billion in 2014.
Most of the said remittance came from United States, Saudi Arabia, UAE, Singapore, United
Kingdom, Japan, Canada and Hong Kong. 25
The growth in the remittances being sent by OFWs greatly spurs the Philippine
economy and increases the purchasing power of their respective families in the Philippines.
This translates to an increase in the demand of the product and services given by the
country’s telecommunication companies as the said products and services is now becoming
a necessity.
Also, a growth in OFW population would translate to more Filipino families availing
the products and services offered by the telecommunication companies in the country as a
means of communication and a medium for their remittances to their love ones in the country
and abroad.
GROWTH OF E-COMMERCE IN THE PHILIPPINES
With the growth of internet and social media usage in the Philippines, the country’s e-
commerce market pocketed around $1 billion in total sales in 2014 and the broader internet
market, which includes internet usage and other businesses that uses the internet, stands at
Php1.4 trillion in 2014 or around 13% of the country’s GDP. The Philippine e-commerce
sales revenues is expected to double in value to $2 billion by 2015 and is further expected to
grow to $9.1billion by 2018.26
Nowadays, entrepreneurs in the Philippines are more frequently tapping the internet
as a medium for their various ventures and businesses. This will not only generate profit for
telecommunication companies, as they are the only industry that can provide the said
services, but it will also help new and existing businesses to expand and subsequently help
the Philippine economy expand as well.
25
http://www.philstar.com/headlines/2015/02/17/1424591/ofw-remittances-6.2-percent
26
http://www.bworldonline.com/content.php?section=Economy&title=dti-sees-doubling-of-e-
commerce-market-in-2015-pushes-industry-road-map&id=101831
37 | P a g e
SOCIAL MEDIA
Social media is widely used in the Philippines, Filipinos lead the world in 2014 in the
amount of time spent connected to the internet for social media. One of the main reasons for
this is that around 11 million Filipinos are living overseas and social media is their primary
means of connecting to their friends and families. Due to this fact, Facebook.com became
the most visited site in the Philippines last June 2014. Also, there are roughly around 30
million Facebook users in the country last 2013. These facts made the Philippines the social
media capital of the world. Below are the top reasons why Filipinos use social media.
 75% to connect with friends and families

 70% to meet new people
 65% for fun
 63% to share their new life experiences
 62% for company 27
Being one of the biggest, if not the biggest, country in terms of social media usage,
the telecommunication industry in the Philippines will greatly benefit from this due to the fact
that many of the country’s population is now using the social media platform to communicate
with friends, read news and other related activities. Also nowadays, businesses are now
using social media as a venue for their marketing campaigns. Growth in social media usage
by businesses will greatly increase the demand for telecommunication products and services
most especially internet connectivity.
GOVERNMENT AND PRIVATE INSTITUTIONS GOING ONLINE
Nowadays, various Philippine government and private institutions are utilizing the
internet as a medium to serve their various clients and customers. The Philippine
government is even encouraging its various public departments to enhance its services by
tapping the internet as a medium to enhance efficiency and to eradicate red tapes and
corruption. Last march 2012 the Philippine government established a new Department
named Department of Information and Communications Technology (ICT) to spearhead the
country’s policies and regulations in information and communications technology. Also the
Philippine government launched GovCloud, which provides email and webhosting services
27
http://www.gmanetwork.com/news/story/367983/scitech/technology/pinoys-lead-the-world-in-
social-media-engagement-study
38 | P a g e
to various government agencies. Also, according to a UN’s survey, The Philippines still
ranked 88th in the world out of 190 countries when it comes to e-government initiatives and
development. So there are still lots of room to grow.
The e-commerce in the Philippines in 2013 is valued at $6.2 billion and is further
expected to grow to $9.1 billion by 2018. Also, online shopping platforms like Amazon,
Zalora and Lazada are slowly becoming a trend which will further boost e-commerce in the
country. Internet retailing is forecasted to post a CAGR of 11% in the future.28
Most, if not all, of the citizens of the Philippines needs various products and service
offered by different government and private institutions and the initiatives from the
government and private sector to go online to increase efficiency will greatly increase the
demand to connect to the internet and therefore increase the demand of the products and
services offered by telecommunication companies. And given that the Philippines, especially
the government, is still lagging compared to other countries meant that there are lots of
opportunities for future growth in telecommunication industry most especially connection to
the internet.
ONLINE BANKING AND PAYMENT SERVICES
Payment using cash is still the primary mode of payment but nowadays more and
more banks and other payment companies are slowly utilizing the internet as a mode of
payment and platform to do banking transactions due to the speed and convenience of doing
transactions online. Also, due to the rise in e-commerce, more and more Filipinos are
expected to utilize cashless financial transactions online. Below are the lists of banks in the
Philippines which offer online banking.
 Allied Bank – www.alliedbank.com.ph

 Asia United Bank – www.aub.com.ph
 Banco De Oro – www.bdo.com.ph
 Bank of Commerce – www.bankcom.com.ph
 Bank of the Philippine Islands (BPI) – www.bpiexpressonline.com
 Chinabank – www.chinabank.ph
 Chinatrust Commercial Bank – www.chinatrust.com.ph
 Citibank Philippines – www.citibank.com.ph
 East West Bank – www.eastwestbanker.com
 Export and Industry Bank – www.exportbank.com.ph
28
39 | P a g e
 Hongkong and Shanghai Banking Corporation (HSBC Philippines) –
www.hsbc.com.ph
 Land Bank of the Philippines – www.lbpiaccess.com
 Metropolitan Bank and Trust Company (Metrobank) –
www.metrobank.com.ph
 Philippine National Bank (PNB) – www.pnb.com.ph
 Philippine Postal Savings Bank – www.postalbank.gov.ph
 Philippine Savings Bank (PS Bank) – www.psbank.com.ph
 Planters Development Bank – www.plantersbank.com.ph
 Premiere Development Bank – www.premierebank.com.ph
 Rizal Commercial Banking Corporation (RCBC) – www.rcbc.com
 Robinsons Savings Bank – www.robinsonsbank.com.ph
 Security Bank – www.securitybank.com
 Standard Chartered Bank – www.standardchartered.com
 Sterling Bank of Asia – www.sterlingbankasia.com
 Union Bank of the Philippines – www.unionbankph.com
 United Coconut Planters Bank (UCPB) – www.ucpb.com 29
Cash may still be king in the Philippines but with the worldwide trend shifting to
cashless transactions being made online and with new online security technology being
developed, this medium might be a good contributor to future profits for the
telecommunication industry as the technology needed for doing online transaction is
provided by the country’s telecommunication companies.
GROWTH AND FASTER INTERNET SPEED OF OTHER ASEAN AND ASIAN

COUNTRIES COMPARED TO THE PHILIPPINES
The Philippines has one of the slowest internet speeds in Asia and the ASEAN
region. The Philippines garnered an average speed of 3.6 Mbps, which is the slowest in
ASEAN. Comparing the said speed to Singapore of 61 Mbps, this is the fastest in the
ASEAN region. This is also way below the average internet speed in the ASEAN region
which is 12.4 Mbps and the global average speed of 17.5 Mbps. This is quite alarming given
the fact that around 42 percent of the world’s internet users are coming from Asia and if the
Philippines cannot improve on this, the country can be left out of much of the possible
opportunities being provided by the internet.
Finally, South Korea still has the world’s fastest internet speed followed by Japan and
Hong Kong. Below is a visual illustration of internet speeds of ASEAN countries.30
29
http://fitzvillafuerte.com/philippine-banks-that-offer-online-banking.html
40 | P a g e
This is an alarming factor not just for Globe Telecoms, but also to the whole
telecommunication industry in the Philippines. Globe Telecoms must look at this scenario as
an opportunity to gain more market share and subscribers by improving on their provided
internet speed and improving on the quality of internet service it is providing to its customers.
iii. POLITICAL / LEGAL FACTORS
ONGOING SENATE AND NTC INQUIRY ON THE SLOW INTERNET SPEED IN THE
PHILIPPINES
The Senate of the Philippines and the National Telecommunications Commission

(NTC) summoned the top telecommunication companies in the Philippines to explain the
slow internet connections in the country. The Senate hearings, held last September 2014,
wants to know the root cause as to why the Philippines is lagging, in terms of internet speed,
30
https://www.techinasia.com/hows-southeast-asia-performing-internet-speed-race-infographic/
41 | P a g e
compared to its ASEAN neighbors.31 On the other hand, the National Telecommunications
Commission (NTC) also summoned the top telecommunication companies to a public
consultation last October and November 2014 to explain the minimum speed of the
respective company’s broadband internet connections. Also, the NTC is pushing to make
broadband internet as a basic service, as it is currently just classified as a value added
service, in order for the NTC to regulate it as per the Public Telecommunications Policy Act
of 1995.32
The current inquiries of the Senate of the Philippines and the National
Telecommunications Commission may add to the cost of doing business or cut the revenues
of the telecommunication industry players as penalties or additional taxes and fees might be
imposed on them.
On the other hand, the telecommunication industry players must not look at the said
inquiries in a negative way but look at them as an opportunity to show and expose to the
government, and even to the public, the various legal, administrative and governmental
challenges that they are facing that adds up to their cost of doing business.
INCOMING 2016 PRESIDENTIAL ELECTIONS
One of the biggest political risks that the Philippines face is the 2016 presidential
election. As the Philippine constitution barred previous presidents from running after their
six-year term is over, new presidents tend to criticize the previous administration, change
current policies and halts policies that they think the previous administration is doing wrong.
And because of this, many important developments that require long-term preparation and
planning tends to make little or no progress which subsequently drags down investor
confidence and makes doing business hard for companies in the country. 33
This factor might become a big deal not just for the telecommunication industry but
for the country’s economy as a whole if the next administration does not do it right. This
31
http://www.rappler.com/business/industries/215-tech-biz/69279-ip-peering-pldt-pressure
32
http://www.rappler.com/business/industries/172-telecommunications-media/72568-ntc-public-
hearing-internet-speed
33
http://asia.nikkei.com/Politics-Economy/Economy/Political-risks-threaten-to-dent-Philippine-
economic-growth
42 | P a g e
might greatly affect the business environment and investor confident to the country which
might lead to slowdown of the current fast-paced business growth of the country. This might
also lead to political unrest that might lead to disruption of operations of the
telecommunication industry’s services on various parts of the country.
VARIOUS THREATS BY REBELS, TERRORIST AND VARIOUS UNLAWFUL GROUPS
Due to the wide, scattered and sometimes remote locations of telecommunication

equipment and cellsites of telecommunication companies in the Philippines, they are prone
to attacks from various rebels, terrorist and unlawful groups which tend to extort and
sometimes destroy the telecommunication player’s equipment if they don’t pay up. This
makes the telecommunication players in the Philippines prone to risk that comes with
political unrest most especially in remote provinces in the country.34
Various threats to telecommunication facilities around the Philippines by unlawful

people, rebels and terrorist groups can greatly increase the cost of doing business for
telecommunication players because of the destructions they might cause to their
telecommunication equipments most especially that the cost of the said equipments are
quite high.
RED TAPES AND EVER-CHANGING LOCAL GOVERNMENT LAWS
The telecommunication industry in the Philippines, most especially the top players,
are prone to risks from red tapes and various local government laws being enacted by
different municipalities in the Philippines against the telecommunication players. The top
telecommunication players voiced this concern during the senate hearings against
telecommunication players in the Philippines due to slow internet speed last January 2015.
During the said hearings, one of the top management from Globe Telecoms voiced
this concern stating that the process of simply getting permits for erecting towers alone takes
too long. As per his statement, simply putting up a tower, not even commissioning the
34
http://www.gmanetwork.com/news/story/94429/news/regions/suspected-npa-rebels-attack-
globe-site-in-davao-norte
43 | P a g e
equipments needed for a cellsite to work and use frequencies, needed 10 permits before
commencing the actual construction. This makes putting up just one tower, with no working
equipments, at least 6 months.
Also, another concern the top telecommunication players voiced out was the different
fees local government charge the telecommunication players for doing business in their
respective areas. A perfect example of this is in Santiago City, in Isabela wherein the city
government orders the telecommunication companies doing business in the said city to pay
Php200,000 per year for tower fees.35
This is a negative sign for the telecommunication industry in the Philippines as the
various, ever-changing local government fees and procedures imposed to them might add
up to cost of doing business and can also sometimes drag into a lengthy legal battle that will
not only add to cost of doing business, but also to the quality of the products and services
they provide to their customers.
NTC MEMORANDUM CIRCULAR NO. 02-10-2011
The National Telecommunications Commission (NTC) Memorandum Circular No. 02-

10-2011 deals with the refund order of NTC to telecommunication players in the Philippines
for the alleged excessive charges they imposed on the prices of their SMS services to their
customers. The said Memorandum Circulars orders the telecommunication companies to
refund their subscribers Php0.20 to Php0.15 per SMS and they will also receive a fine of
Php200 per day until they complied with the said refund.
The top telecommunication companies filed a temporary restraining order for the said
Memorandum Circular to the Supreme Court and currently awaiting final decision from the
latter if the said Memorandum Circular is valid.
If this Memorandum Circular will be considered by the Supreme Court as valid, this
will definitely add to the cost of all telecommunication players in the Philippines. Estimates in
2010 alone shows that almost around 20 million text messages were sent daily which would
translate to a Php4 million per day refund and would subsequently add up to a total of
35
http://www.rappler.com/business/industries/172-telecommunications-media/82208-slow-internet-
blame-red-tape
44 | P a g e
Php1.42 billion refund for the telecommunication companies since the said Memorandum
Circular took into effect.36
CONSUMER GROUP’S REQUEST FOR TELECOMMUNICATION COMPANIES TO

ISSUE REFUND
This specific factor pertains to Democracy.net.ph request to the National

Telecommunications Commission (NTC) to revise NTC Memorandum Circular No. 07-07-
2011 or more specifically for the telecommunication companies in the Philippines to issue
rebates of refund once the speed of the internet service being provided by them goes below
the minimum broadband speed their customers applied for. Currently, the only thing that is
written on the said Memorandum Circular is to have the telecommunication companies to
disclose to their customers the minimum broadband speed, service rates and reliability of the
service they provide and not the actual refund.37
Even though this factor will definitely add cost of doing business not just for Globe
Telecoms but to the whole telecommunication industry if passed, the company must not look
at it as a negative factor albeit it must look at it as a challenge for them to make the quality of
the products and services they provide to their customers better. If done so, this will not only
increase customer satisfaction, it will also add more subscribers for them and subsequently
add to revenues of the company in the future.
iv. ENVIRONMENTAL FACTORS
TYPHOON, EARTHQUAKE AND VOLANIC RELATED RISKS
Natural disasters are common in the Philippines; every year more than 20 typhoons
visit the country. The World Wildlife Fund for Nature states that the Philippines ranks 3 rd in
the world for the most vulnerable countries due to climate change. And not only that, The
country is also within the Pacific Rim of Fire which makes it vulnerable to earthquakes and
36
http://www.gmanetwork.com/news/story/362921/economy/companies/smart-digitel-ask-ca-to-
stop-refund-of-excess-sms-charges
37
http://www.interaksyon.com/business/104180/consumer-group-seeks-rebates-from-telcos-if-
broadband-speeds-fall-below-standard
45 | P a g e
volcanic eruptions as the country has around 23 active volcanoes. The World Bank
estimates that the cost of the said natural disasters to the Philippine economy every year is
around 2.7% of the country’s GDP.38
The Philippines is prone to strong typhoons most especially now that the issue on
climate change predicts stronger typhoons in the coming years and the country is within the
pacific rim of fire which greatly increases the possibility of earthquakes and volcanic
disasters to occur. The said disasters might greatly affect the telecommunication companies
if they occur as the infrastructures and equipment of the industry players are scattered all
around the country. Destruction and impairment of the said equipments might add up to cost
of doing business for the telecommunications industry.
MILITARY INVASION AND WAR-RELATED RISKS
The Philippines and China is currently locked in a bitter diplomatic protest on their
respective claim on the Spratly island group that could dangerously lead to military
confrontation between the two nations if situation is not handled properly. There are currently
steps being done to deescalate the said tension and the United States is currently working
will all parties involved but so far no clear solution is still in place. In an event of war with
China, The Philippines is in a tough position as the country’s military is not in a good shape
to defend country.39
Communication is a vital part of any war, and with that in mind, the
telecommunication industry in the Philippines is prone to be attacked or being taken over by
any invading military forces in an event of war, which will subsequently disrupt or even halt
the normal business operation of the telecommunication industry in the country.
v. TECHNOLOGICAL FACTORS
NEW FIBER OPTIC AND BROADBAND RELATED TECHNOLOGIES
38
http://treasury.worldbank.org/bdm/htm/Financing_Noteworthy/News_Philippines_DisasterRisk_N
ov2011.html
39
http://www.businessinsider.com/china-orders-philippine-military-to-leave-disputed-areas-of-south-
china-sea-2015-5
46 | P a g e
These are new technologies or upgrades of former technologies that are being tested
by various equipment suppliers of the telecommunication industry that has the capability to
enhance the reliability and speed capacity of the current fiber optic and broadband
infrastructure of telecommunication companies. Technologies such as fiber-to-the-curb,
broadband-over-power-lines and DWDM technologies are currently being developed or
upgraded in order to meet the growing demand for speed and capacity of internet
connectivity.40
These new technologies being developed for the telecommunication industry are
positive signs for the telecommunication industry in the Philippines as these can be a source
of future growth for telecommunication companies in the country. These new technologies
like upgrades in the DWDM technology and fiber-to-the-curb can solve capacity and speed
issues for telecommunication companies and technologies like broadband-over-power-lines
can help bring internet to remote areas even without the use of cellsites and frequencies.
The only downside for the said technologies is that they will require additional funds to be
invested before being rolled out by telecommunication companies.
NEW SMARTPHONES AND MOBILE INTERNET GADGETS
The number of mobile phones in the Philippines is increasing steadily. In 2013 the
number is at 108 million, a 58.7% increase from its 2008 levels. Due to the increasing
demand for mobile internet connectivity and the ongoing network upgrades of the top
telecommunication players in the country, mobile phone subscription is still expected to pose
a strong growth in the future. Also, the availability of flexible financing schemes from various
banks and credit card companies will further fuel the growth in mobile phones in the country.
This is a positive development for the telecommunication industry in the Philippines

as a growth in number of mobile phones in the country will subsequently translate to growth
in mobile phone subscribers for the telecommunication industry as the said industry is the
only industry that is capable to provide the service needed by the said mobile phone users.41
40
41
47 | P a g e
4G, LTE AND 5G TECHNOLOGIES
With the demand for capacity and internet speed growing, various new technologies
are being developed my telecommunication equipment suppliers to support the forecasted
growth in the demand for telecommunication products and service and also to remedy the
different issues current telecommunication technologies have. One of the technologies that
are being developed are the so called 5G technologies or LTE Advanced (LTE-A). Below is
a speed comparison of the current telecommunication technologies against LTE-A.42
SOURCE: http://www.digitaltrends.com/mobile/what-is-lte-advanced-and-why-should-you-care/
As the demand for internet speed and capacity in the telecommunication industry
grows, new telecommunication technologies are needed to support the increase. This is a
good sign not just for Globe Telecoms but for the whole telecommunication industry as this
can be potentially a good source of future revenues for the industry, given that the current
major sources of revenues are already slowing down.
On the other hand, this can also be a source of new cost for industry players, if not
managed well, due to the new equipments that are needed in order to upgrade the
telecommunication industry’s current infrastructures.
CHEAP ONLINE VOICE AND DATA MESSAGING SERVICES AND APPS
Growth in the usage of various online voice and data messaging apps continues to
grow. This continues to eat up revenues from SMS and other telecommunication services. In
2014, it is estimated that around 50 billion messages from instant messaging apps were sent
42
http://www.digitaltrends.com/mobile/what-is-lte-advanced-and-why-should-you-care/
48 | P a g e
every day globally compared to 21 billion messages sent via SMS. But in terms of revenues,
it is expected that SMS still reigns, generating around $100 billion in total revenues, which is
50 times bigger than the estimated revenues from instant messaging apps. Revenue from
SMS is still expected to decline in the coming years as the number of instant messaging
apps and usage grows.43
With the development and growth of cheap online voice and data messaging
services in the Philippines, revenues from the current major source of revenues of
telecommunication companies might be greatly affect or even become obsolete. But on the
other hand, the technology platform needed by the said apps in order to function is the
internet. And internet connectivity is still one of the products and services telecommunication
companies offer. Globe Telecoms must be able to manage properly its current revenues
from SMS and voice and allocate it to be invested in products and services supporting
internet connectivity in order to mitigate the impact to revenues of the said apps.
CYBERATTACKS FROM HACKERS
Globe Telecoms and other telecommunication players are prone to various hacking
and cyberattacks which might disrupt the normal business operations of the company. A
perfect example of this cyberattack is done by hackers to the company’s website last
November 2014. Investigation and cyber security improvement are currently being
performed by the company in order to avoid the said incident from happening again in the
future. 44
Cybersecurity is a big issue nowadays not just for the telecommunication industry but
to all businesses that utilizes the cyberspace for their normal business operation. Putting up
a cybersecurity system for a company can add up to cost and cyberattacks can greatly
impact the normal business operations of companies that can lead to decline in productivity
and subsequently, in revenues.
43
https://www2.deloitte.com/content/dam/Deloitte/au/Documents/technology-media-
telecommunications/deloitte-au-tmt-short-messaging-services-versus-instant-messaging-011014.pdf
44
http://www.gmanetwork.com/news/story/390230/scitech/technology/phl-telco-s-site-defaced-by-
hacktivists
49 | P a g e
OVER-THE-TOP (OTT) TECHNOLOGIES
Over-the-Top technologies refers to usage of a dedicated internet infrastructure of

telecommunication companies to deliver content, normally from television, video and other
services, to customers via the internet. Because of these technologies, traditional mediums
to relay information are slowly moving to the IP landscape. This is critical nowadays given
the fact that the internet is slowly becoming the primary source of information.45
Over-the-Top technology is a good opportunity not just for Globe Telecoms but also
for all telecommunication players in the Philippines. This will greatly increase the demand for
internet usage, which the telecommunication industry is the only industry that offer the said
services.
On the other hand, this factor can also be a negative thing for the industry, if not
handled properly, as this might made obsolete the current main sources of revenues for the
industry, which is mobile voice and SMS, as this technology might accelerate the growth of
cheaper online messaging apps.
2) INDUSTRY AND COMPETITOR ANALYSIS
Globe Telecoms belong to the telecommunication industry. The telecommunications

Industry is a highly regulated industry due to limited resources telecommunication players
can use and the various local and national government requirement needed to enter the
industry. The Telecommunication industry in the Philippines is further divided into 3 major
segments which are Mobile, Fixed-line and Broadband. Globe Telecoms is a major player in
all 3 segments of the telecommunication industry.46 The major brands for the mobile
segment of the telecommunication industry in the Philippines are Globe Telecoms, Smart
Communication and Sun Cellular (Digitel).
45
http://www.pace.com/americas/our-thinking/over-the-top-services-ott/
46
Globe Telecoms 2014 Annual Report
50 | P a g e
The major brands for the fixed-line segment of the telecommunication industry in the
Philippines are PLDT, Globe Telecoms and Bayantel.
The major brands for the broadband segment of the telecommunication industry in
the Philippines are Smart, Sun Cellular (Digitel), Globe Telecoms and Wi-Tribe (Liberty
Telecoms).
Globe Telecoms gets most of its revenues from the mobile segment of the
telecommunication industry. The majority of its customers are from the high-income section
of the mobile segment. This can be seen by the fact that Globe Telecoms has cornered the
biggest chunk the lucrative postpaid segment of the wireless division of the
47
telecommunications industry.
vi. PORTER’S FIVE FORCES
SUMMARY OF PORTER’S FIVE FORCES ANALYSIS
Force Conclusion
1. Rivalry of Competition Weak
2. Threats from New Entrants Weak
3. Bargaining Power of Suppliers Moderate
4. Bargaining Power of Buyers Weak
5. Threats from Substitutes Weak
RIVALRY OF COMPETITION: RATING = WEAK
47
Globe Telecoms 2014 Annual Report
51 | P a g e
The rivalry between the telecommunication industry players in the Philippines is
weak, even if they tend to show in the media that they are bitterly fighting for market share.
Here are few of the factors that lead to this conclusion. First, the number of players in the
industry is too few and they are decreasing, the trend is that smaller companies are being
taken over by larger companies as can be seen by the merger of Digitel to the PLDT group
in 201148 and the ongoing acquisition of Bayantel by Globe Telecoms.49 Also, the market
share is concentrated to just the top 2 biggest players. They also have the majority of the
industry’s subscribers.
It is also important to note that price trend is decreasing but not due to competition
but due to government regulatory pressures.50 Also, the top two main competing companies
are almost equal in sizes and their capability of delivered products and services are almost
equal.
In terms of the demand for the products and services of the industry, demand is
growing on both the broadband and wireless segment but declining on the fixed-line due to
substitute products. Price-cutting is also rare but packaging of products and services are
common. Consumers switching cost are low but consumer has very few choices aside from
the top 2 companies. No actual products are being manufactured so the risk on perishable
goods in the industry low but the industry has a high depreciation cost due to the fast-
changing technologies in the industry.
Leaving the industry is also low due to no other substitute industry is capable of
delivering the products and services offered by the telecommunication industry. Also, fixed
costs are high in the telecommunication industry, which as high as utility companies, which
makes it harder for new players to enter the industry.
In summary, The rivalry of competition on the telecommunication industry is weak in

a sense that only few players really survive and the small players gets eaten up by the larger
companies. Even if the top 2 big companies in the industry may have bitter price wars, the
competition remains just between the 2 of them.
THREAT FROM NEW ENTRANTS: RATING = WEAK
48
PLDT 2012 annual report
49
GLOBE 2014 annual report
50
www.interaksyon.com/business/104180/consumer-group-seeks-rebates-from-telcos-if-broadband-
speeds-fall-below-standard
52 | P a g e
Entering the telecommunication industry in the Philippines is quite hard due to a
myriad of reasons. One of the reasons why it’s hard to enter the said industry is that
technology and specialized know-how to become a player in the telecommunication industry
is highly specialized, costly and changes frequently, which increases the fixed cost for
industry players and decreases the potential entry of new players. Technical and legal
experience and expertise is also important in the industry with various laws and regulations
imposed on it.
Another barrier for entering the telecommunication industry in the country is that the
big players in the telecommunication industry already have significant market share and
customer loyalty. Brand preference already sits with the two big telecommunication
players.51
Another significant reason for the difficulty of entering the telecommunications

industry in the country is the large capital requirement needed to enter the
telecommunication industry which is as big as that of the utility industry.
Also, the telecommunication industry is an industry highly regulated by the

government due to limited resources and various governmental laws to comply with before
starting one. Tariffs is also a big factor for new players in the industry, various tariffs are
needed to be paid to the local and national government in this industry. Telecommunication
companies also need various licenses before they can operate and use the limited available
frequencies for their business operations and most of the big companies already held the
licenses for the said resources.
Another barrier for entry of new players is that the big telecommunication players
already have strong marketing resources and distribution channels that enable them to get
the large chunk of market share which is one of the challenges new players in the country
encounters.52
BARGAINING POWER OF SUPPLIERS: RATING = MODERATE
With different and fast-changing technologies in the telecommunication industry,

industry players rely a lot to its suppliers. They get only suppliers that have a high degree of
technical know-how on technologies they need. The said suppliers also provide technical
51
Globe and PLDT 2014 annual report
52
Globe and PLDT 2014 annual report
53 | P a g e
manpower and consultants to telecommunication companies to teach their employees on
how to operate their respective equipments.
The suppliers in the telecommunication industry vary with different technologies.

These suppliers are broken down to mobile, fixed-line and broadband equipment suppliers.
Almost all of the industry’s equipment suppliers are foreign companies. Due to the highly
technical equipments supplied by the said suppliers, there are mostly no substitute materials
for this equipment. But there are also a significant number of these suppliers, which enables
telecommunication companies in the Philippines to get good rates from them.
It is also important to note that telecommunication companies in the Philippines often

buy in bulk orders of equipments and often comes with labor from suppliers so the cost of
switching raw materials is costly. Pricing & payment terms from suppliers are also flexible
and often telecommunication companies can bargain and get good terms due to bulk orders
and the limited number of telecommunication companies operating in the Philippines.
Backward integration is not a common practice in the Philippines telecommunication

industry due to that fact that most of the industry suppliers are highly technical companies
with high levels of Research and Development and the said suppliers are also big
multinational companies that is sometimes even bigger in size than local telecommunication
companies.53
BARGAINING POWER OF BUYERS: RATING = WEAK
Most, if not all of the Philippine population uses the products and services of the
telecommunication industry. The major buyer groups in the country are individual,
businesses and government institutions. Nowadays, everyone needs to communicate and
connect to the internet for various reasons. This makes the products and services of the
telecommunication industry a necessity. These factors show how large a group of customers
are available for the telecommunications industry, but due to limited number of industry
players, buyers do not have that much of a bargaining power.
The telecommunication industry in the Philippines has concentration of market share,

where the market shares are held by 2 biggest players that has the majority of the industry’s
subscribers. Products and services of the telecommunication industry are undifferentiated.
But with limited industry players, customers do not have much bargaining power.
53
Globe and PLDT 2014 Annual Report
54 | P a g e
Also, brand loyalty is high mainly due to limited choices. It is also one of the reasons
why the government regulates this industry. Reduction in prices of the products and services
of the industry is also not common and oftentimes government intervention is needed to
impose price reductions on the industry.
THREAT FROM SUBSTITUTES: RATING = WEAK
Market share and subscribers of the telecommunication industry in the Philippines is

quite concentrated to few big players. There might be substitute technologies and price
pressures for the products and service of the telecommunication industry but at the end of
the day, the products and services needed to support the said substitutes still needs other
products and services that only the telecommunication industry provides (e.g. online free
calls still uses the internet). This market phenomenon is called market cannibalism.54
Marketing aggressiveness between the big telecommunication players is quite

aggressive. But with few market players, it’s just a game of who gets more subscribers of the
2 big players. The capacity expansion plans of each of the big players are aggressive mainly
due to the upward demand for faster speeds and limited players who offer the said
services.55
CONCLUSION
The telecommunications Industry in the Philippines is still a very profitable industry,

once you have gained a firm foothold and presence. Even though profits are slowing down
and even falling for some, it is still a very lucrative industry due to low number of competition,
difficulty of entering the said industry, weak bargaining power of customers and no other
available substitute for industry, most especially now that that its products and services of
the telecommunications industry are becoming an everyday necessity.
Potential for substitutes is an area in which Globe Telecoms could look into to build a
sustainable competitive advantage. They should be able to be the first one to take
advantage of new technologies in the telecommunication industry that can potentially
become a replacement of the existing technologies in the future and at the same time satisfy
the needs of its current customers by giving them what they really need. In the event that the
54
http://www.ey.com/Publication/vwLUAssets/Top_10_risks_in_telecommunication_revisited/$FILE/
Top_10_risks_in_telecommunications_EF0116.pdf
55
55 | P a g e
company would not be able to exploit this competitive advantage, they might face possible
obsolescent and decrease in profits. A good example of this the fixed-line segment of the
telecommunications industry which was made obsolete by the growth of the wireless and
broadband segment.56
Globe Telecoms should stay in the telecommunications industry in the country as

they already have a good presence and market share in the said industry. And also the
industry still has lots of potential for new avenues of growth.
vii. INDUSTRY VALUE CHAIN AND WATERFALL CHART
TELECOMMUNICATION INDUSTRY’S VALUE CHAIN
KEY INSIGHTS
• The Network Development stage up to the Marketing and Sales of Products and
Services stage of the value chain is where the telecommunication firms are directly
engaged in.
• The Network Development and Platform Development stage is where significant

value-add are created to the telecommunication industry’s products and services
56
PLDT 2014 Annual Report
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because this is the parts wherein the actual network infrastructure and products and
services are developed.
• The equipment suppliers have a strong leverage and bargaining power during the
Network Development and Network Operations stage of the value because all the
technical know-how all comes from the equipment suppliers so managing them
properly on this parts of the value chain is critical for the firm’s success.
RELEVANCE OF THE INSIGHTS TO GLOBE TELECOMS
There is an opportunity in the Platform Development stage of the value chain as this
is the part where the company will be able to customize, not just the network infrastructure,
but also the products and services it can offer to its customers. By optimizing this segment to
mirror what the company’s customers really needs, will greatly increase customer
satisfaction of its subscribers and will be a key to the firm’s future success.
The key strategy here is finding the right mix and improvements to the products and
services that the customer needs. Make the wrong mix and improvement and the profits
could potentially drop, make the right mix and profits could increase. To be able to create the
right improvements that the customer really wants, the company must listen more to
customers more closely and the direction as to where the telecommunication market is going
in the future and not what the company wants for the customers to have.
TELECOMMUNICATION INDUSTRY’S WATERFALL CHART
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120.00
100.00 +5.00
+10.00
80.00 +5.00
+7.00
+14.00
60.00
100.00
40.00 +30.00
20.00
+29.00
-
viii. STRATEGIC POSITIONING
Perceptual Map for Coverage Area and Product Portfolio
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When it comes to Coverage Area, Globe Telecoms, PLDT and Smart are the
telecommunication industry players in the Philippines that had the widest coverage area. It is
also important to note that Smart and Sun Cellular are part of PLDT. The company that has
the least coverage area is Eastern Telecoms that has a coverage area of only selected
municipalities and districts in Luzon.57
When it comes to Product Portfolio, only Globe Telecoms and PLDT offer the most
number of products and services to its customers. Both have the capability to offer a
complete telecommunication product range to its customers.58 The companies that have the
least number of products being offered are Bayantel and Eastern Telecoms that only offers
Fixed-line voice and data to its customers.
Perceptual Map for Financial Position and Subscriber Base
57
http://www.easterncommunications.com.ph/index.php/our-service-areas/
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When it comes to Subscriber Base, PLDT, Smart and Globe Telecoms has the
largest number of subscribers among all players. Also, as discussed on the previous section,
Smart and Sun Cellular are part of PLDT.59 On the other hand, the player with the lowest
subscriber base is Eastern Telecoms which is more focus on business customers.
When it comes to Financial Position, PLDT is the player with the biggest assets while
Bayantel has the lowest asset base as the company is currently under bankruptcy
proceedings due to its unpaid debts.
Perceptual Map for Foreign Partners and Brand Name
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When it comes to foreign partners to interconnect with, Globe Telecoms and PLDT
have the most number of foreign partners. They are also the only players in the
telecommunication industry in the Philippines that own submarine cable landing stations that
enables them to easily interconnect with other foreign telecommunication players. 60 The
player that has the least number of foreign partners is Eastern Telecoms that utilizes PLDT’s
international gateway facility to be able to connect overseas.61
When it comes to Brand Name, PLDT, Who owns the brands Smart and Sun
Cellular, and Globe Telecoms got the highest score as they are the players that can
frequently be seen advertising their respective brands. The least recognizable brand is
Eastern Telecoms that rarely advertise its brand.
Conclusion
The most meaningful strategic positioning variable for the 3 presented will be the
perceptual map for coverage area and product portfolio. This was chosen as it clearly shows
the direct competitor of Globe Telecoms when it comes to the completeness of products
being offered and the wideness of network coverage which is PLDT. PLDT and Globe
Telecoms are the only players in the telecommunication industry that has the capability to
offer a complete product range of telecommunication products and services. It is also
important to note that both the Smart and Sun Cellular brand are under the PLDT group of
companies that excludes them from competition as they are already included in PLDT.
ix. MARKET SIZE, SHARE AND GROWTH TRENDS
MARKET SIZE OF THE TELECOMMUNICATION INDUSTRY BY SALES VALUE FROM

2010 TO 2014
In Pesos 2010 2011 2012 2013 2014 CAGR
SALES
VALUE
60
61
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Total Market 225,057,412,248 247,059,391,811 249,055,038,091 261,051,369,364 269,973,976,089 4.65%
Globe
62,554,689,000 77,764,964,000 82,742,565,000 90,500,137,000 99,024,604,000 12.17%
Telecoms
No. 1
competitor 142,242,000,000 145,834,000,000 159,738,000,000 164,052,000,000 165,070,000,000 3.79%
(PLDT)
No. 2
competitor 15,265,000,000 18,193,000,000 n/a n/a n/a n/a
(Digitel)
Other
competitor 142,242,000,000 145,834,000,000 159,738,000,000 164,052,000,000 165,070,000,000 3.79%
larger than you
All others
20,260,723,248 23,460,427,811 6,574,473,091 6,499,232,364 5,879,372,089 (26.60%)
combined
PERCENT MARKET SHARE OF TOP TELECOMMUNICATION COMPANIES FROM 2010

TO 2014
In Pesos 2010 2011 2012 2013 2014
% MARKET SHARE
Globe Telecoms 27.79% 31.48% 33.22% 34.67% 36.68%

No. 1 competitor
63.20% 59.03% 64.14% 62.84% 61.14%
(PLDT)
No. 2 competitor
6.78% 7.36% n/a n/a n/a
(Digitel)
Other competitor
63.20% 59.03% 64.14% 62.84% 61.14%
larger than you 1
All others combined 9.00% 9.50% 2.64% 2.49% 2.18%
PERCENT GROWTH / DECLINE IN SALES OF THE TELECOMMUNICATION INDUSTRY

FROM 2010 TO 2014
In Pesos 2010 2011 2012 2013 2014
% GROWTH /
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DECLINE
Total Market - 9.78% 0.81% 4.82% 3.42%
Your company - 24.32% 6.40% 9.38% 9.42%

No. 1 competitor
- 2.53% 9.53% 2.70% 0.62%
(PLDT)
No. 2 competitor
- 19.18% n/a n/a n/a
(Digitel)
Other competitor
- 2.53% 9.53% 2.70% 0.62%
larger than you 1
All others combined - 15.79% (71.98%) (1.14%) (9.54%)
KEY INSIGHTS
The telecommunication industry in the Philippines posted an average CAGR of

around 4.65% in the last 5 years. The main drivers for the said growth are the mobile and
broadband segments of the industry. The subscriber base of the said segments grew by 5%
and 25% respectively in 2014.62 Comparing the industry growth to that of the Philippine
growth in 2014, the telecommunication industry grew slower than the country’s GDP due
mainly to the slowdown of the fixed line and mobile segment of the industry.
CAGR of the biggest telecommunication company in the industry, which is PLDT, is

around 3.79% in the past 5yrs which is slower compared to the industry growth and Globe
Telecom’s growth of 4.65% and 12.17% respectively. This lower growth rate of PLDT,
compared to the industry and of Globe Telecoms is mainly due to the decline in market
share PLDT which posted a steady decline averaging -0.82% in the last 5yrs and the decline
of the fixed-line segment of the telecommunications industry wherein PLDT is the biggest
industry player.63
RELEVANCE OF THE INSIGHTS TO GLOBE TELECOMS
The strong growth in the mobile and broadband segment of the telecommunication
industry in the Philippines is a positive development for Globe Telecoms given the fact that
the bulk of its revenues comes from the mobile and broadband segment of the
telecommunication industry.
62
63
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Also, the decline in PLDT’s market share is a positive development for Globe
Telecoms because the telecommunication industry in the Philippines has only a handful of
players and there is strong growth in the demand for mobile and broadband services of the
industry. The shift in market share from the biggest industry player, which is PLDT, to other
industry players can be seen by the growing market share of Globe Telecoms which is
averaging around 7.18% in the last 5yrs.
Finally, the main driver of Globe Telecoms growth trend is growth in its mobile, which
holds around 76% of the company’s total revenues, and broadband segment which grew by
7% and 22%. Another key driver is the growth in market share of the company which posted
a 5 year CAGR of 7.18%.64
x. MARKET ANALYSIS
KEY PRODUCTS AND SERVICES
Listed below are the key products and services that telecommunication companies in the
Philippines offer to its customers:
 Mobile Voice - Mobile voice are the services that telecommunication companies
offer that enables its subscribers to speak to another person using your mobile
phone.
Market Size and Percent Share in Total Market
Last year’s market size of mobile voice amounted to Php85.3 billion which is
around 31.6% of the total market.
Top Brands
Top brands for this specific products and service are Globe Postpaid, Globe
Prepaid, TM, Smart Prepaid, Talk 'N Text, Smart Postpaid, Smart Infinity, Sun
Cellular Prepaid and Sun Cellular Postpaid.
Growth Trends and Potential Future Growth
Mobile subscription continues to grow in 2014 even if the segment already

has 116% penetration rate of 113.89 million subscribers. It is expected that mobile
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subscription to grow to 132 million by 2020. This is mainly due to the growth in
demand of mobile phones which is expected to have a 5% CAGR in volume from
2013 to 2018.65
Relevance To Globe Telecoms
Globe Telecoms is currently in a good position to exploit the said opportunity

due to the fact that the bulk of its business is from the mobile segment. But Globe
Telecom has to be careful and vigilant in investing on the said product as alternative
technologies (eg. Cheap mobile voice apps) might become available that might
cause a decline in revenues in the said product.
 SMS - SMS are the services that telecommunication companies offer which enable
its subscribers to send text messages to another person using your mobile phone.
Last year’s market size of SMS amounted to Php69.48 billion which is around
25.74% of the total market
Top Brands

The Philippines is one of largest SMS market in the world most especially on
the prepaid segment. Filipinos send more than a billion SMS messages every day. It
is one of the biggest contributors to the telecommunication industry’s revenue in
2014.66 SMS revenues are expected to slowly drop by 0.3% until 2016.67
Slowdown in revenues from SMS is a big issue for the telecommunication

industry most especially to Globe Telecoms as this one of its main sources of
65
portal.euromonitor.com
66
PLDT 2014 annual report
67
http://www.telecompaper.com/news/sms-revenues-forecast-to-drop-in-philippines—827517
65 | P a g e
revenue. Globe Telecom must be able to find new products and services that will be
a good potential source of growth in revenues in the future and use the revenues still
being generated by SMS to develop the said new potential product.
 Mobile Data - Mobile data are the services that telecommunication companies offer
which enable its subscribers to send/receive data (eg. Photos, music, internet, etc)
on your mobile phone up to a certain speed.
Last year’s market size of mobile data amounted to Php19.13billion which is

around 7.08% of the total market
Top Brands
Just like mobile voice, mobile data is expected to grow, thanks to the growth
in demand for mobile phones and growing demand for mobile internet.
Relevance to Globe Telecoms
Mobile data is a good source of potential revenues for Globe Telecoms given
the fact that most of their business and competencies are in the mobile segment and
the growing demand for mobile products and services. The key here is to be able to
manage price and most importantly, the quality of its mobile products and services.
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 Fixed-line Voice - Fixed-line voice are the services that telecommunication
companies offer that enable its subscribers speak to another person using a handset
located on a fixed location.
Last year’s market size of fixed-line voice amounted to Php35 billion which is
around 12.96% of the total market.
Top Brands
Top brands for this specific products and service are Globelines, PLDTHome,
PLDTSME Nation and BayanDSL.
There are currently around 2.97million fixed-line subscribers which gave it a

3.7% decline from its 2008 levels. It is expected that by 2020 there will be around
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2.11 million fixed-line subscribers which gives it a 1.9% decline rate from its current
levels.68
This product is currently, and is forecasted to still be, in decline. Globe

Telecom has exposure to this segment so there should be gradual decrease in
investment on this product by Globe in order to minimize their loss in revenue if this
product segment becomes obsolete.
 Fixed-line Data - Fixed-line data are the services that telecommunication

companies offer that enable its subscribers to send /receive data (eg. Photos, music,
internet, etc) on your computer or mobile devices on a fixed location.
Last year’s market size of fixed-line data amounted to Php36.41 billion which
is around 13.49% of the total market
Top Brands
Top brands for this specific products and service are Globe Business,
Globelines, PLDTHome, PLDTSME Nation, PLDTAlpha Enterprise, BayanBusiness
and BayanDSL.
Just like fixed-line voice, fixed-line data is also forecasted to decline albeit on
a slower pace due to increasing demand for internet both by individual and
businesses, this segment.
This segment is not a good source of growth but Globe for 2 reasons, first this
segment is on a decline and second, Globe Telecoms does not have the upper hand
on this segment. Globe should also gradually minimize its exposure on this product.
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 Broadband - Broadband are the services that telecommunication companies offer
that enable its subscribers to send/receive data (eg. Photos, music, internet, etc) on
a fixed and/or a mobile location using your mobile phone or internet device. This
service also has higher speed and bandwidth capabilities compared to mobile data.
Last year’s market size of broadband amounted to Php24.6 billion which is

around 9.12% of the total market
Top Brands
Top brands for this specific products and service are Globe Tattoo, SmartBro,
Sun Broadband and Wi-Tribe.
The Broadband segment of the industry posted a CAGR of 15.9% in 2014,

from 5.13 million subscribers in 2012 to 5.77 million in 2014. It is still expected to
grow to 18.3 million subscribers by 2030 which translate to 384% growth from its
current levels.69
Broadband is a product that offers a high potential for future growth to Globe
Telecoms and further investments should be done on this product. Also, integrating
broadband to the fixed-line data product is key in order to improve on the said
product segment of the Globe Telecoms most especially on its business customers
which has potential for growth in the future due to high GDP growth of the country.
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MARKET SEGMENTATION BY SUBSCRIBER CONSUMPTION (ARPU)
This market segmentation classifies customers by means of their average monthly

consumption or average revenue per user (ARPU). The customers are divided into upper
segment, or subscribers (whether business of individual) that consumes Php500 and above,
middle segment, or subscribers (whether business of individual) that consumes Php100 up
to Php500, and the lower segment, or subscribers (whether business of individual) that
consumes Php100 below.
Upper Segment
This segment accounts for Php111.3 billion or 42.76% of the telecommunication

industry’s total market share in 2014. This segment also posted a CAGR of 5.88% and is
forecasted to post double digit growth in the future.70 The strong growth rate of this segment
is due to the increase demand in speed and capacity of telecommunication provided
products and services by businesses and individual clients.71
The growth in the upper segment is positive news for Globe Telecoms especially that
the majority of subscribers in this segment are on postpaid wherein Globe Telecoms is the
number one player.
70
www.interaksyon.com/business/105430/globe-sees-postpaid-business-growing-alongside-increase-
in-middle-class)
71
www.mobileworldlive.com/philippines-low-arpu-vs-high-mobile-engagement
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Middle Segment

industry’s total market share in 2014. This segment also posted a CAGR of -11.57%. The
decline on this segment is due to 2 reasons, first, subscribers from this segment are
requiring more speed and capacity for their services that moves them to the upper segment
and second, various promos and pricing schemes move their average consumption to the
lower segment.72
Globe Telecoms should be prepared to mitigate the impact of the movement of

subscribers from this segment to other segment and take advantage of their changing
business and individual needs, most especially the subscribers moving to the upper
segment.
Lower Segment

industry’s total market share in 2014. This segment also posted a CAGR of 39.2%. This
increase is mainly due to more competitive promos and pricing schemes being implemented
in the telecommunication industry by the major players that impacts the revenues generated
for each subscribers.73
Globe Telecoms must be able to ready itself from the possible impact of this promo
and pricing schemes to its total revenues and must be able to find new avenues of future
growth to compensate the lost revenues from subscribers moving from the middle segment
to the lower segment.
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MARKET SEGMENTATION BY MODE OF PAYMENT
This market segmentation classifies customers by manner of payment the utilized

when they avail of the products and services of the telecommunication industry. This
segmentation divides the customers into the prepaid and postpaid segments. The prepaid
segment is the segment of the telecommunication company wherein the customers pays the
products and services it use via prepaid mediums such as call cards or autoload stations.
This is also the segment wherein the low and the lower-middle income subscribers of the
industry belongs to. On the other hand, the postpaid segment is where most high-income
and businesses belongs to. It is the segment wherein subscribers pay the products and
services it use via monthly, quarterly or sometimes yearly, whether businesses or
individuals.
Prepaid Segment
The prepaid segment of the telecommunication industry accounts for Php135.42

billion or 50.61% of the industry’s total revenues in 2014. This segment is still forecasted to
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have a negative CAGR due to promos, mobile apps and price pressures on the products and
services of the telecommunication industry.74
The slowdown in growth in the prepaid segment can greatly impact Globe Telecom’s
total revenues as this segment contributes more than 63% of the company’s total revenues.
Globe must put strategies that can minimize the impact of the slowdown of this segment to
its bottom-line.
Postpaid Segment
The postpaid segment of the telecommunication industry accounts for Php132.58

billion or 49.39% of the industry’s total revenues in 2014. This segment of the
telecommunication industry had a past CAGR of 10.63%. The postpaid segment is also
forecasted to post double-digit growth in the coming years.75
The past strong CAGR and the good future growth forecast of this segment is a great
sign for Globe Telecoms as they have the largest market share in the Postpaid segment of
the industry. They currently have around 3 million postpaid subscribers which generated
around Php 40 billion in total revenues. Globe must maintain its leadership and at the same
time gain more market share on the said segment.76
74
75
in-middle-class)
76
Globe 2014 annual report
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KEY BRANDS AND PRICING STRATEGY OF KEY PLAYERS
The pricing in the telecommunication industry in the Philippines is regulated by the

government. This leaves little room for industry players to increase prices. To remedy this,
the top players in the telecommunication industry resort to promos to differentiate the pricing
of its products and services to its customers. Below is a table of price of the products and
services of the telecommunication industry in the Philippines.
Globe PLDT
Call per Minute (Same Network) Php 6.50 Php 6.50
Call per Minute (Other Network) Php 7.50 Php 7.50
Call per Minute (International) USD 0.40 USD 0.40
SMS (Same network) Php 1.00 Php 1.00
SMS (other network) Php 1.00 Php 1.00
SMS (international) Php 15.00 Php 15.00
Php 5.00 per Php 5.00 per
Internet Browsing
15mins 15mins
SOURCE: Globe, Smart and Digitel website
1. GLOBE TELECOMS
Key Brands
 Globe Postpaid
 Globe Prepaid
 TM
 GCash
 Globelines
 Globe Business
 Tattoo
Pricing Strategy
Globe Telecom’s pricing strategy is customized pricing wherein each subscriber can
choose what specific products and service mix and they really need. Even the company’s
postpaid segment is now customizable to the actual needs of each subscriber.77
The company’s price level on its postpaid plans is still the highest in the industry. But
they compensate this by providing the latest gadgets and more freebies, depending on the
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plan the said subscriber gets, when they avail of their postpaid plans. That factor and the
customizable and flexible plans make up the said price premium.
For the prepaid segment, prices are at par with the largest competitor which is Smart
but Globe Telecoms, like on its postpaid promos, also offer more flexibility on its prepaid
promos.78
The key for Globe Telecoms is to gain more subscribers from the B, C and D
segment of the industry which is dominated by their key competitors. And the most important
of all, they should be able to sustain the quality and reliability of the customized products in
order to protect their brand and increase customer satisfaction.
2. PLDT
Key Brands
 Smart Prepaid
 Talk 'N Text
 Smart Postpaid
 Smart Infinity
 SmartBro
 Sun Cellular Prepaid
 Sun Cellular Postpaid
 Sun Broadband
Pricing Strategy
PLDT’s main pricing strategy is called ‘bucket plan’, wherein unlimited voice, text or
data services are packaged alone or together with other services on a specific time-frame.
They are also sector specific with the Talk ‘N Text and Sun Cellular Prepaid brand targeting
the C and D market, While Smart prepaid and both Smart and Sun Cellular postpaid brand
targeting the B market while smart infinity targets the A market. Also PLDT’s Sun Cellular
brand is the pioneer in industry when it comes to unlimited promos, which is the main pricing
strategy for the said brand.79
78
Globe website and 2013 Annual Report
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PLDT’s price level is in the middle and lower end of pricing in the telecommunication
industry. This is justified given the fact that PLDT has the largest subscriber share in the
industry. Also, their price for the high-income bracket is cheaper compared to the price of
Globe Telecoms but the latter offers more promos and privileges compared to the former. It
is also worth noting that even though all telecommunication players now offers unlimited call
and text promos, Digitel’s price on their unlimited call, text and internet service on their
prepaid, postpaid and broadband plans are still the lowest in the industry.
DISTRIBUTION CHANNEL OF THE INDUSTRY
The telecommunication industry has a wide range of customers that should be

addressed by its distribution channels. Below are the lists of distribution channels that the
telecommunication industry players in the Philippines employ to reach its wide range of
customers.
Independent dealers and sub-dealers
These are indirect channels for the telecommunication industry in the Philippines.
These are the individual retail or sari-sari stores and even individuals that sell prepaid
products and services, like call cards, autoload stations and prepaid sim cards, of the
industry. Also, some of these have their own retail networks that they sell to which
subsequently sell the telecommunication products and services to the actual customers. As
of December 2014, Globe Telecoms has around 856,000 of these dealers and roughly
around 1 million for PLDT. This channel is still expected to grow as population and demand
for prepaid services grows.
Globe Telecoms can use this channel in order for it to gain more of the B,C and D
market of the telecommunication industry as this channel is the main channel that directly
interacts with the said market.80
Company Owned Stores and Service Centers
These are direct channels of the telecommunication industry. These are the company
owned stores and service centers where customers can avail of the industry’s various
products and services except for prepaid services. As demand on subscriptions for
broadband and mobile services grows, it is also expected that this channel will grow as this
is the main channel for subscription of the said products and services most especially on the
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post-paid segment. As of December 2014, there are roughly around 183 Globe Stores, and
around 300 stores of the PLDT group around the Philippines.81
Globe Telecoms can exploit this channel most especially that they are the leading
telecommunication company in the Philippines when it comes to post-paid subscribers by
providing a fast, better and reliable customer service on its Globe Stores.
Customer Facing Units
These are direct channels of the telecommunication industry. These are the groups
and/or departments of telecommunication companies that deal directly to large individual
retail, businesses and voice and roaming needs of the company’s customers. This channel
is also a potential avenue for growth most especially on the business customers as the
country’s GDP is expected to further grow and most of the clients that this group caters to
are the high revenue generation customers.82
Improving on this channel can greatly impact Globe Telecom’s revenues most
especially if they can be able to gain more of the BPO’s and large businesses as subscribers
given the growth in the country’s GDP and BPO sector. The key is providing the customers
of this group with better customer service and reliable products and services.
MARKETING AND PROMOTIONS STRATEGY OF KEY PLAYERS THE INDUSTRY
1. GLOBE TELECOMS
Marketing and promotions took up roughly around 19% of Globe Telecom’s operating
expenses in 2014 which is around Php8 billion. This is done in order to acquire and retain
customers and gain market share, to build on their brand and to defend from competition.
Due to the company’s wide range of customers, which comprises almost all
segments of the society, Globe Telecoms employs mass marketing. The company prefers
traditional above the line marketing strategies. The most common mediums are TV
commercials, sponsorships and partnership with radio and TV shows, which enables the
company to have a nation-wide reach. They also utilize billboards and flier at high-traffic
areas and malls.
81
Globe, PLDT, Smart and Digitel websites
82
Globe and PLDT annual report
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They also employs below the line marketing by partnering with various foreign and
local events held in the Philippines and providing perks and privileges to its loyal customers
mostly in the postpaid segment.
2. PLDT
Telecommunication companies are one of the biggest spenders in advertisements

and just like Globe Telecoms, advertisement and promotions is one of the biggest costs for
PLDT which amounted to around Php10.62 billion which is roughly around 10.7% of its
operating costs in 2014.
Also, just like Globe Telecoms, PLDT also prefer traditional above the line marketing.
Wide reaching mediums like TV and radio advertisements, billboards and fliers and
partnerships with various local and foreign events being held in the Philippines. The only
significant difference is that PLDT’s target market focuses mostly on the middle and lower
segment of the industry.
Churn Rate
This refers to the percentage of subscribers that stop using the products and services
of a specific telecommunication company and transfers to other carriers. This is commonly
used to gauge how much previous subscribers shifted to another telecommunication
company. There are various reasons for the said transfer but this is a good gauge of how
effective the marketing and promotional programs are of a specific telecommunication
company. Below is a table of the churn rates of the top brands in the Philippines
telecommunication industry
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xi. MARKET FORECAST
TELECOMMUNICATION INDUSTRY MARKET FORECAST BY PRODUCT
2014 Percentage of market share per

product
9%
13% 32% Mobile Voice
SMS
13% Mobile Data
Fixed Line Data
7%
26% Fixed Line Voice
Broadband
MARKET FORECAST BY PRODUCTS AND SERVICES
Last 5-
Assumed
yr
In Pesos 2015 2016 2017
CAGR Future
CAGR
SALES
VALUE
Mobile
1.96% 88,310,340,000 91,401,201,900 94,600,243,967 3.5%***
Voice
SMS -2.48% 69,270,563,000 69,062,751,311 68,855,563,057 (0.3%)**
Mobile Data 31.99% 19,796,653,380 20,489,536,248 21,206,670,017 3.5%***

Fixed-line
0.90% 34,024,816,963 33,075,524,570 32,152,717,434 (2.79%)*
Voice
Fixed-line
9.74% 35,394,827,679 34,407,311,987 33,447,347,983 (2.79%)*
Data
Broadband 15.89% 26,506,209,153 28,523,331,669 30,693,957,209 7.61%*
Total
3.86% 273,303,410,175 276,959,657,685 280,956,499,667 1.34%
Market
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% MARKET
SHARE
Mobile
32.31% 33.00% 33.67%
Voice
SMS 25.35% 24.94% 24.51%
Mobile Data 7.24% 7.40% 7.55%
Fixed-line
12.45% 11.94% 11.44%
Voice
Fixed-line
12.95% 12.42% 11.90%
Data
Broadband 9.70% 10.30% 10.92%
Total
100.00% 100.00% 100.00%
Market
* source:portal.euromonitor.com
** source:www.telecompaper.com
*** source: https://bmo.businessmonitor.com
Almost all of the product and services in the industry, except for mobile data and
broadband, are expected to slow down in growth and even decline in the future with the
biggest loss are expected in the fixed-line voice and data. This is due to the availability of
cheap, faster and more convenient substitute technologies.83 Also, SMS are expected to
post a slow decline rate also due to the availability of cheap and faster substitute
technologies mainly cheap mobile apps.84
Globe Telecoms is not the biggest player in the fixed-line segment of the industry but
they have a significant exposure on the said products and services that might still be
substantially affected by the decline in growth of fixed-line products. They must also lower
their future investment on the said products and services. Also, Globe Telecoms must be
able to diversify its revenues from the mobile segment to be invested into areas that offer
strong future growth which are mobile data and broadband.
83
https://bmo.businessmonitor.com
84
www.telecompaper.com
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MARKET FORECAST BY MARKET SEGMENT
2014 Revenues Per Subscriber

Consumption (ARPU) Segment
Upper Segment Middle Segment Lower Segment
25%
43%
32%
MARKET FORECAST OF MARKET SEGMENT BY SUBSCRIBER CONSUMPTION

(ARPU)
Last 5-yr Assumed

In Pesos CAGR 2015 2016 2017 Future
CAGR
SALES VALUE
Upper Segment 5.88% 122,436,076,455 134,679,684,101 148,147,652,511 10.00%*
Middle Segment -11.57% 74,172,734,607 66,503,273,848 59,626,835,332 (10.34%)**
Lower Segment 39.20% 67,156,240,092 66,116,544,890 63,106,828,334 (3.06%)
Total Market 3.03% 263,765,051,153 267,299,502,839 270,881,316,177 1.34%***
% MARKET
SHARE
Upper Segment 46.42% 50.39% 54.69%
Middle Segment 28.12% 24.88% 22.01%
Lower Segment 25.46% 24.74% 23.30%
* Postpaid segment forecasted growth rate
** Prepaid segment forecasted decline rate
*** Total Market growth from per product
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2014 Revenues Per Mode of
Payment Segment
Postpaid Revenues Prepaid Revenues
49%
51%
MARKET FORECAST OF MARKET SEGMENT BY MODE OF PAYMENT
Last 5-
Assumed
yr
In Pesos 2015 2016 2017
CAGR Future
CAGR
SALES VALUE
Prepaid
-3.73% 122,200,933,259 110,938,640,088 98,235,453,620 (10.34%)***
Segment
Postpaid
14.29% 148,958,264,167 163,854,090,584 180,239,499,643 10.00%*
Segment
Total Market 3.86% 271,159,197,426 274,792,730,672 278,474,953,263 1.34%**
% MARKET
SHARE
Prepaid
45.07% 40.37% 35.28%
Segment
Postpaid
54.93% 59.63% 64.72%
Segment
*http://www.interaksyon.com/business/105430/globe-sees-postpaid-business-growing-alongside-
increase-in-middle-class
** From forecast by product
***Total market value minus postpaid values
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The Upper Segment of the telecommunication industry in the Philippines, which
composed mostly of the postpaid segment, is forecasted to have strong growth in the future.
The said segment is expected to post a double digit growth rate in the coming years. This is
mainly due to the growing Philippine economy and the demand for more speed and capacity
by the telecommunication industry’s customers.85
On the other hand, the middle and the lower segment of the telecommunications
industry in the Philippines, which composed mostly of the prepaid segment, is forecasted to
post a decline. This is mainly due to the various promos and freebies that the
telecommunication industry players give their subscriber that lowers the profits from the said
segments.86
The company must minimize its exposure in segments that is on the decline to
minimize its impact on the company’s bottom line. Also, Globe Telecoms must put strategies
that will increase customer satisfaction and increase its market share on the growing
segments of the industry which is the upper segment, which mostly compose of high income
individual and businesses.
VI. COMPARATIVE PROFILE MATRIX (CPM)
KEY COMPETITOR OF GLOBE TELECOMS: Philippine Long Distance Telephone

Company (PLDT)
With the telecommunication industry in the Philippines effectively becoming a

duopoly, PLDT is the only remaining key competitor of Globe Telecoms in the country’s
telecommunication industry. It also has significant market share on all segments of the
industry and is also the leading player both on the mobile and fixed-line segment of the
industry. PLDT is the largest telecommunication company in the Philippines; it owns two of
the biggest mobile telecommunication companies in the country namely Smart
Communications Inc. and Digitel Telecommunications Philippines Inc. It also has the largest
market share in the fixed-line segment of the country’s telecommunication Industry.
PLDT’s total revenues in 2014 stands at Php170 billion which gave them roughly
around 61.14% of the total market share. They also cornered around 75 million subscribers
85
in-middle-class
86
http://www.mobileworldlive.com/philippines-low-arpu-vs-high-mobile-engagement
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in 2014 which is around 64% of the country’s total subscriber base. They also had 2,063,794
fixed-line subscribers which is around 69% of the total fixed-line subscribers nationwide.87
KEY COMPETITOR OF GLOBE TELECOMS: Singapore Telecoms Limited (Singtel)
For the purpose of comparing the quality of the top telecommunication companies in
the Philippines with its foreign counterparts, especially in the ASEAN region, Singtel is also
included in the CPM comparison to be able to clearly gauge the performance of the top
Philippine telecommunication players.
Singtel was chosen to be the gauge as it it’s the top telecommunication player in
Singapore, which is the country with the best performance in the telecommunication industry
in the ASEAN region.88 Singtel’s total revenues in 2014 stands at SGD 16.84 billion89, it is
also the market leader in Singapore cornering a 50.6% market share and 4.09 million
subscribers in 2014.90
1) CRITICAL SUCCESS FACTORS
CSF #1: Superior Customer Satisfaction
Importance Weight: 17%
This factor is not just a gauge of a telecommunication company’s customer service

but also how satisfied, as a whole, are their customers to the company’s customer support,
timely problem resolution and future reoccurrence of the reported issues.
This factor was given the 2nd highest importance ranking of 17% as this factor deals
with the quality of products and services telecommunication companies deliver to its
customers. Given that the telecommunication industry is effectively becoming a duopoly, this
kind of business environment tends to decrease quality of the products and services offered
by a specific industry due to very low competition. Given that scenario, the player with the
more satisfied customers will surely gain market leadership.
87
Smart and PLDT 2014 Annual Report
88
89
Singtel’s 2014 Income Statement
90
https://www.digitalnewsasia.com/mobile-telco/singapore-telcos-winners-and-losers-in-2014
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CSF #2: Reliable Products and Services
This factor deals with how reliable and less prone to downtime and issues the
products and services of a specific telecommunication company offers. This was given the
highest importance ranking of 18% as nowadays, telecommunication customers are
becoming more quality conscious which can be seen by the growing complaints of
unsatisfied customers and the ongoing senate hearing on the products and services being
delivered by telecommunication companies. Also, providing good quality products and
services will surely increase customer satisfaction which subsequently, will lead to market
leadership.
CSF #3: Competitive Promos
This factor deals with how telecommunication companies offer not just the cheapest
and most diverse promos and product mix to their customers, but also how honest are the
marketing of its products and services.
This factor was given an importance weight of 12% as customers nowadays tend to
look for value for their money. An honest and competitive product pricing and promo mix is
what most customers look for when choosing the type products and services they want to
avail from a specific telecommunication companies. This factor was demonstrated by the
rise of the sun cellular brand via its unlimited promos.91
CSF #4: Technologically Advance and Innovative Products
This factor deals with how innovative and up to date with the latest technologies the
products and services the telecommunication companies offer. This was given a moderate
importance weight of 13% as the telecommunication industry is a fast changing industry and
the company that is the pioneer in a specific innovative product gains the biggest market
share. This can be seen in the growth of GSM technology in the past. This factor is important
91
http://www.zdnet.com/article/price-conscious-mobile-customers-drive-biz-model-innovation/
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most especially in gaining the biggest market share and competitive edge in a specific
product category of segment.
CSF #5: Prestige of Brand
This specific factor deals with how much prestige and exclusivity the brand gives to
its customers. This was given the lowest importance weight of 6% due to the fact that even
though customer still wants prestige and privileges when it comes to the brand that they
choose, customers nowadays wants more value for their money. And the quality of the
products and services of a specific telecommunication company still prevails in importance.
CSF #6: Strong Financial Position
This factor deals with how healthy the financial position of a telecommunication
company and how easily can it invest in new technologies of business ventures. This was
given a moderately high importance weight of 15% as a strong financial standing is a vital
factor for industry players in order for them to be able to easily take advantage, and make
necessary investments in new technologies and on important acquisitions in the
telecommunication industry, given that the telecommunication industry is a fast-changing
industry. A good example of this is when PLDT acquired Digitel in 2012.
CSF #7: Effective Marketing Strategy
This factor deals with how effective are the marketing strategy of each company in
the way they reach out to its target markets. This factor was given a relatively low
importance weight of 8% as having an effective marketing strategy is still critical factor in the
industry most especially that the industry has a broad range of customers and that most of
the marketing mediums are almost the same in all players. Differentiating your brand and
products and services is a critical factor for the industry. But at the end of the day, if quality
and customer satisfaction is low, customers will still shift to other brands.
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CSF #8: Large Customer Base
This factor deals with how large the market share is of a specific brand is. This was
given a moderate importance weight of 10% as a large customer base is still an important
factor in choosing the products and services of a telecommunication industry player wherein
the customers of the said industry is prone to the ‘bandwagon effect’ in consumer behavior.
This can be seen when the majority of your family and friends are subscribers of a specific
provider you also tend get the said provider. Also word of mouth marketing is strong in the
industry due to the fact that all major players have the same marketing mediums
2) BENCHMARKING VERSUS KEY COMPETITORS
CSF #1: Superior Customer Satisfaction
Globe Telecom’s Rating: 2

PLDT’s Rating: 2
SIngtel’s Rating: 4
Both Globe Telecoms and PLDT was given the low rating on this factor as their
customers complains nowadays are on the rise. And not just that, various senate and legal
proceedings are currently ongoing due to poor customer satisfaction of telecommunication
customers. The thing that is keeping customers at bay is the fact that the telecommunication
industry in the Philippines is a duopoly, which makes options for telecommunication industry
customers very minimal.
Comparing the churn rate of the Philippine companies to Singtel, we can see that
Singtel’s customers are more satisfied as can be seen by the total churn rate of 1.2%
garnered by company.92 Below is a churn rate table of the said companies for comparison.
92
https://www.fool.sg/2014/11/13/what-investors-should-know-about-singtels-latest-earnings/
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2014 Churn Rate (monthly average)
SMART Prepaid 5.80%
SMART Postpaid 2.70%
Talk n Text 5.80%
SUN Prepaid 9.70%

SUN Postpaid 1.80%
GLOBE postpaid 2.30%

GLOBE prepaid 6.40%
TM 7%
Singtel's total 1.20%

Source: Globe, PLDT and Singtel's 2014 annual report
CSF #2: Reliable Products and Services

PLDT’s Rating: 2
Both Globe Telecoms and PLDT was given a low rating in this factor compared to
Singtel as their respective network reliability and internet speed are below the average of the
ASEAN region.93 Also, network and service issues tend to reoccur more frequently even
after technical troubleshooting and resolution was already performed. Below is a table of
Globe Telecoms and PLDT’s top brands latest network statistics for comparison.
Globe Smart Sun Singtel

3G Download
1.3 Mb/s 1 Mb/s 0.6 Mb/s 1.9 Mb/s
Speed
4G Download
5.1 Mb/s 4.8 Mb/s 6.9 Mb/s 11.2 Mb/s
Speed
3G Upload Speed 0.3 Mb/s 0.3 Mb/s 0.3 Mb/s 0.2 Mb/s
4G Upload Speed 4.3 Mb/s 3.4 Mb/s 7.6 Mb/s 3.8 Mb/s
2G Latency 711 ms 709 ms 713 ms 965 ms
93
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2G Data Reliability 61% 59% 49% 79%
12th of Sep 24th of Nov 22nd of Mar 26th of Jun
4G First Seen on
2013 2013 2014 2013
SOURCE: http://opensignal.com/networks/
CSF #3: Competitive Promos

PLDT’s Rating: 3
Globe Telecoms got the highest rating on this segment as they offer a more wide
range of promo mix compared to its competitors by enabling its customers customize their
availed products and services exactly to their individual needs.94
On the other hand, PLDT’s promos are still at par with the industry as the company is
more inclined to make specific promo mix to their target markets. They are also the leading
player in unlimited promos via its Sun Cellular brand.95
Finally, Singtel also got the highest rating for this segment because even if the
promos they deliver is not that flexible as that of Globe Telecoms, they still offer faster and
better quality products and services to its customers.96
CSF #4: Technologically Advance and Innovative Products

PLDT’s Rating: 3
Both companies got a high rating for this factor as both of them offer the latest
technologies available in the industry. Both of them offer 3G, WiMax and LTE to its
94
Globe Website and 2014 Annual Report
95
96
http://info.singtel.com/personal/promos-bundles/bundles#bundles
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customers. Also, both have almost the same average network coverage for both their 3G
and LTE service.97
But comparing the products and services that they offer to Singtel, we can see that
Singtel not only offer the same, if not more advance, products and services, Singtel also
offers faster and more reliable products and services.98
CSF #5: Prestige of Brand

PLDT’s Rating: 3
Both Globe Telecoms and PLDT got a high rating for this factor as both of them are
the most trusted brands in the telecommunication industry in the Philippines. This can be
seen by the number of subscribers they have on their main target markets. The Globe
Telecoms brand got the biggest number of postpaid subscribers99 while the Smart and Sun
Cellular brand got the biggest number of prepaid subscribers.100
But comparing their respective brand with Singtel, Singtel has the upper hand when it
comes to prestige. Not only is it the top player in Singapore, its brand is also recognized in
17 countries worldwide.101
CSF #6: Strong Financial Position

PLDT’s Rating: 3
PLDT got a high rating for this factor as the company is the biggest company in the
Philippine telecommunication industry in terms of total assets. The company has
Php436,295,000,000 in total assets in 2014. The company also has a lower level of debt
compared to Globe Telecoms and had a long-term debt to equity ratio of 0.85. On the other
97
http://opensignal.com/networks/philippines/
98
http://info.singtel.com/personal
99
100
101
http://info.singtel.com/annualreport/2014/business_review/group_consumer/regional.html
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hand, Globe Telecom’s total assets in 2014 stands at Php179,506,952,000 while its long-
term debt to equity ratio stands at 1.08.
Comparing this to the financial standing of Singtel, Singtel has total assets amounting
to SGD 39.32 billion or roughly around Php 1.3 trillion in 2014, the company also has a long-
term debt to equity ratio of 0.3.102
CSF #7: Effective Marketing Strategy

PLDT’s Rating: 3
Both Globe Telecoms and PLDT got a relatively high rating for this factor as both of
them have effective marketing that has a wide reach. Globe Telecom’s prefer traditional
above the line marketing mediums to get more audience for their marketing campaigns.
They also get strategic brand ambassadors to represent its products for its target markets.
The only issue is that its marketing strategy does not focus much on the lower segment of
the market in which its competitors dominate.
On the other hand, PLDT’s marketing strategy is almost the same with Globe
Telecoms; they also get strategic brand ambassadors to represent its products for its target
markets. They also partner with big companies to let those companies market their products.
(eg, Airports, Malls, etc).
Singtel also utilizes the said mediums due to the fact that it also has a wide reach of
subscribers and industries as customers.
CSF #8: Large Customer Base

PLDT’s Rating: 4
102
Singtel’s 2014 annual report
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PLDT got the highest rating for this factor as the company has the biggest number of
subscribers. In 2014, the company’s total subscribers stand at 75,051,095.00. On the other
hand, Globe Telecoms got around 47,591,148.00 total subscribers.
On the other hand, Singtel also got the highest rating for this factor as it also has the
biggest number of subscribers in Singapore and it also has operations in 17 countries
worldwide.103
3) COMPARATIVE PROFILE MATRIX
IMPORTANC IMPORTANC
E E GLOBE PLDT SINGTEL
CRITICAL
SUCCESS RATIN SCOR RATIN SCOR RATIN SCOR
FACTORS RANKING WEIGHT G E G E G E
Superior
Customer
Satisfaction 9 17% 2 0.35 2 0.35 4 0.68
Reliable
Products and
Services 10 19% 2 0.38 2 0.38 3 0.57
Technologicall
y Advance
and
Innovative
Products 7 13% 3 0.4 3 0.4 4 0.52
Competitive
Promos 6 12% 4 0.46 3 0.35 4 0.48
Strong
Financial
Position 8 15% 2 0.31 3 0.46 4 0.6
Large
Customer
Base 5 10% 3 0.29 4 0.38 4 0.4
Effective
Marketing
Strategy 4 8% 3 0.23 3 0.23 3 0.24
Prestige of
Brand 3 6% 3 0.17 3 0.17 4 0.24
TOTAL 100% 2.6 2.73 3.73
103
http://info.singtel.com/annualreport/2014/business_review/group_consumer/regional.html
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4) CONCLUSION
Globe Telecoms got a 2.6 rating on CPM. This is lower compared to its key
competitor’s rating of 2.73. The highest contributor to its rating is the company’s high score
on highly advance products and services, competitive promos, large customer base,
effective marketing strategy and brand prestige. On the other hand, the factors that drove
down the company’s rating are superior customer satisfaction, reliable products and services
and strong financial position.
The company can greatly improve this rating if it can improve on the highest weight
contributor in CPM which are reliable products and services and superior customer
satisfaction, in which the company got a low score. The only thing that keeps its key
competitor from gaining undisputed industry leadership is PLDT also got a low score on the
said factors. This can be seen by how Singtel was able to get high scores on the said factors
which gave them the high score of 3.73.
VII. EXTERNAL FACTOR EVALUATION (EFE)
1) OPPORTUNITIES AND CORRESPONDING IMPORTANCE WEIGHTS
Opportunity 1: The Philippine’s GDP grew by 6.1% last 2014 and is expected to continue to
have strong growth averaging around 7-8% per year until 2018. Key contributors to this
growth are OFW remittances and the BPO sector (Macro Economic Analysis)
This opportunity was given the second highest score of 10% as telecommunication
products and services are now becoming a necessity in most industries in the Philippines.
This is especially true in the BPO industry which is heavily reliant on the products and
services that telecommunication companies offer. Also, the growing OFW remittances will
indirectly fuel further growth of all industries the Philippines, which subsequently will increase
the demand of the products and services of the telecommunication industry in the country.
And being the second biggest telecommunication company in the industry, Globe telecoms
will surely benefit from that growth.
Opportunity 2: The Philippine’s current Fiscal environment is suitable for investment given
that the current interest rates. Overnight borrowings are expected to remain stable at 4%
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and will continue to remain around the said levels for the rest of the year. The country’s
stock market also hits its all-time highs this year which makes sourcing funds from the said
market more lucrative. Also, the economy has a manageable inflation forecast at the range
of 2-4% from 2015 to 2018 (Macro Economic Analysis)
This opportunity was given the highest score of 12% due to the fact that the
telecommunication industry is a capital intensive industry. This is due to the fast evolving
technologies in the industry which gave the players in the industry high depreciation
expenses. And any positive changes in the fiscal environment in the Philippines will greatly
help all players in the telecommunication industry. This opportunity can greatly help all
telecommunication industry players not only by lowering its borrowing cost needed to finance
new investments but also in becoming financially healthy by refinancing their expensive
debts with new cheaper ones.
Opportunity 3: Growth of internet usage for both business and government transactions. As
both businesses and government institutions are encouraging their various departments to
utilize the digital space to improve efficiency and eradicate redtape and corruptions. E-
commerce Philippines is expected to grow from $6.2billion in 2013 to $9.1billion in 2018, a
growth rate of 45.3% (Macro Analysis / Social/Cultural)
This opportunity was given the second highest score of 10% due to the potential
impact it had on the total revenues, not only of Globe Telecoms but the industry as a whole.
As companies and government institutions becomes more digitally connected, the demand
for the telecommunication industry’s internet and broadband services will subsequently
increase as they are the only industry that is capable of delivering the said service. This is
very critical and the potentials are big for industry players given that most of the products
and services of government institutions and companies are essential for the everyday lives
of Filipinos. Also, given the fact that the Philippines currently has the slowest interned speed
in the ASEAN region, there still has a lot of room for improvement.
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Opportunity 4: After the acquisition of Digitel by the PLDT group and the ongoing acquisition
of Bayantel by Globe Telecoms, the Philippines telecommunication industry has effectively
becoming a duopoly (Porters Five Forces)
This opportunity was given a moderate score of 8% due to the fact that when there
are only 2 key players in the industry, their growth performance will somewhat be similar to
the growth rate of the industry as a whole. There might be some good areas of growth in the
telecommunications industry but there are also bad ones. And having just 2 key players,
both of them tend to get all the results of both the bad and good areas of the industry. But
this factor can greatly change if a new foreign player will enter the telecommunication
industry in the Philippines or partner with a smaller player.
Opportunity 5: The upper income segment of the telecommunication industry, which

comprise mostly of the postpaid segment, posted a past CAGR of 10.63% and is still
expected to post double digit growth rate in the coming years (Market Analysis)
This opportunity was also given the second highest score of 10% as this factor might
be a good source of future earnings for the telecommunication industry as this segment is
where the high income customers of the industry belongs. The strong growth this segment
will definitely translate to revenue growth for the telecommunication industry in the
Philippines.
Opportunity 6: The growing demand for broadband services in the Philippines coupled by
developments of new technologies for broadband is a good opportunity to
telecommunication players as internet usage is forecasted to grow 384% by 2030 from its
current levels and broadband subscribers are expected to post a 7.61% CAGR (Macro
Analysis/Technological, Market Analysis)
This opportunity was given a moderate score of 8% because of its possible impact on
the total revenues of the industry which is somewhat parallel to the expected growth of
broadband subscribers and internet usage growth in the Philippines. Also, broadband is just
95 | P a g e
one of the products and services the telecommunication industry in the Philippines offer to its
customers which hinders it to get a higher score compared to the other previous
opportunities. But given the fact that the Philippines has the slowest internet speed in
ASEAN, there are lots of opportunities for improvement in the said factor.
2) THREATS AND CORRESPONDING IMPORTANCE WEIGHTS
Threat 1: As the Philippines is visited by more than 20 typhoons a month and is located
along the pacific ring of fire, The facilities of telecommunication players are prone to
equipment impairment or loss due to natural and even human initiated impairments caused
by lawless individuals and even accidental outages. Natural disaster’s cost around 2.7% of
the country’s GDP annually (Macro Analysis/Environmental)
This threat was given the lowest score of 6% because even though this threat is a
high contributor to the industry’s expenses, the said expenses is already factored in on the
annual budget of the big players and as it is already taken into consideration early on. There
are also redundancy and contingency measures in place in an event of such occurrences.
Even if the said threats incur downtimes to the industry, restoration measures can be easily
implemented but there will still be loss in revenues and cost involved, it is just a matter of
how high it is depending on the calamity involved.
Threat 2: The growth cheap voice and data apps like skype and whatsapp are threats of
substitute on the voice and data products and services that telecommunication companies
offer (Macro Analysis/Technological)
This threat was given one of the score of 10%, the highest score of all the threats, as
this kind of technological advancement has the capability to make the mobile and fixed-line
obsolete with is a big source of revenues of the industry. The only positive side of this threat
is the technology needed to be able to use the said apps is also supplied by the
telecommunication industry which is the internet.
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Threat 3: The current senate hearings on telecommunication services and the various legal
proceedings currently happening might add to the expenses of the telecommunication
industry players. This is critical given the fact that the industry is highly regulated and
government can invoke the licenses of industry players or impose additional fees (Macro
Analysis/Legal)
This was also given the lowest score of all the threats which is 6% as this event
might produce a negative, but might also produce positive, impacts on industry players.
Impacts like higher fees, penalties and even revocation of licenses is a possibility which
might incur further cost to industry players. But so far, the said hearing produce positive
results for the industry as legal and bureaucratic issues are being addressed like various
local laws that hinder in the rollout of telecommunication players.104
Also, the said hearings might prompt the senate to open new slots to foreign
telecommunication players or force the current big players to give up ownership of smaller
companies and frequencies being held by them which might add competition in the
telecommunication industry in the Philippines.
Threat 4: The saturation of the mobile market and the decline of the fixed-line market can
adversely affect the revenues of industry as the said segments contribute around 64% and
26% of the total revenues of the industry in 2014 respectively. The biggest decline comes
from the fixed-line segment which is expected to have a CAGR of -2.79% and the mobile
segment is expected to slow down in growth with a forecast CAGR of 3% (Market Analysis)
This threat was also given one of the highest score of 10% among all the threats
because the said segment is currently the major source of revenues for the industry players.
Although the decline is quite at a slow pace, this might accelerate if new technologies like
mobile apps will be developed.
Threat 5: The prepaid segment of the Philippines telecommunication industry posted a past
CAGR of -2.6%. This declining CAGR is still expected to continue in the future and further
accelerate to -10.34%
104
http://manilastandardtoday.com/2015/04/30/-tower-fee-on-telecoms-voided/
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This threat was given the highest score of all the threat, which is 10%, as this
segment is one of the largest contributors to the total revenues of the industry and if the
decline will happen, a large part of the industry’s revenues will be affected.
3) OPPORTUNITIES AND COMPANY RESPONSIVENESS
Opportunity 1: The Philippine’s GDP grew by 6.1% last 2014 and is expected to continue to
have strong growth averaging around 7-8% per year until 2018. Key contributors to this
growth are OFW remittances and the BPO sector (Macro Economic Analysis)
Responsiveness Rating: 3
Globe Telecoms got a responsiveness rating of 3 as the company is well positioned

to take advantage of the said growth given the fact that it is the second largest
telecommunication company in the country and the lack of many competitors due to the
duopoly state of the telecommunications industry in the Philippines. The thing that kept
Globe Telecoms from getting a top score is its current high level of debt.
Opportunity 2: The Philippines current Fiscal environment is suitable for investment given
that the current interest rates. Overnight borrowings are expected to remain stable at 4%
and will continue to remain around the said levels for the rest of the year. The country’s
stock market also hits its all-time highs this year which makes sourcing funds from the said
market more lucrative. Also, the economy has a manageable inflation forecast at the range
of 2-4% from 2015 to 2018 (Macro Economic Analysis)
Globe Telecoms got a responsiveness rating of 2 as the company might have issues
with this opportunity as the company already has high levels of debt. The key opportunity
that the company can exploit is to refinance its current debt holdings that incur big expenses,
due to high interest rate or dividend yields, with cheaper credit options currently available.
Opportunity 3: Growth of internet usage for both business and government transactions. As
both businesses and government institutions are encouraging their various departments to
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utilize the digital space to improve efficiency and eradicate redtape and corruptions. E-
commerce Philippines is expected to grow from $6.2billion in 2013 to $9.1billion in 2018, a
growth rate of 45.3% (Macro Analysis / Social/Cultural)
Globe Telecoms got a responsiveness rating of 3 as the company is in a good

position to take advantage of this opportunity as it is one of the biggest internet providers in
the country. The company also has a wide network infrastructure to support these needs.
They also have many partners both local and foreign to assist in the growth of this
opportunity. The only thing that is keeping the company to get the highest score is the
current bad quality of its internet service and bad customer service.
Opportunity 4: After the acquisition of Digitel by the PLDT group and the current ongoing
acquisition by Globe Telecoms of Bayantel the Philippines telecommunication industry has
effectively becoming a duopoly (Porters Five Forces)
Globe Telecoms got a responsiveness rating of 4 for this opportunity as the company
is in a good position to respond in this opportunity as it is one of the biggest players in the
industry which has the capability to acquire smaller industry players.
Opportunity 5: The upper income segment of the telecommunication industry, which

comprise mostly of the Postpaid segment, posted a past CAGR of 10.63% and is still
expected to post double digit growth rate in the coming years (Market Analysis)
is currently the leading player in the postpaid segment of the telecommunication industry and
is in a good position to take advantage of future growth in this segment. The only that
hinders the company from getting the highest score is its poor customer satisfaction that
might lead its current subscribers to transfer to other players.
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Opportunity 6: The growing demand for broadband services in the Philippines coupled by
developments of new technologies for broadband is a good opportunity to
telecommunication players as internet usage is forecasted to grow 384% by 2030 from its
current levels and broadband subscribers are expected to post a 7.61% CAGR (Macro
Analysis/Technological, Market Analysis)
is in a good position to take advantage of this opportunity as it is a one of the big player in
the telecommunication industry in the Philippines that offers broadband services. Also, the
company is also currently investing on new broadband technologies. It is also one of the
players in the industry and has a wide network reach that can support the growth in demand
of this service.
4) THREATS AND COMPANY RESPONSIVENESS
Threat 1: As the Philippines is visited by more than 20 typhoons a month and is located
along the pacific ring of fire, The facilities of telecommunication players are prone to
equipment impairment or loss due to natural and even human initiated impairments caused
by lawless individuals and even accidental outages. Natural disaster’s cost around 2.7% of
the country’s GDP annually (Macro Analysis/Environmental)
Globe Telecoms got a responsiveness rating of 3 for this threat as the company
already has wide technical operations support team in place that can reach every service
area of the company and can easily respond to service interruptions. Also, measures are
already in place to act as redundancies in any such events. They also have an allocated
budget for such impairments and they already have backup measures in place in an event of
a worst case scenario. But at the end of the day, those events will still go down as cost for
the company.
Threat 2: The growth cheap voice and data apps like skype and whatsapp are threats of
substitute on the voice and data products and services that telecommunication companies
offer (Macro Analysis/Technological)
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Globe Telecoms got a responsiveness rating of 2 for this threat as the company has
substantial exposure in the mobile voice and SMS segment of the industry. These can
greatly affect its revenues if the said products and services becomes obsolete due to the
growth of cheaper apps. Currently, Globe is investing on new broadband and mobile data
technologies to compensate the possible future loss in revenues in the mobile voice and
SMS segments. The company also currently has a subsidiary that is a business incubator for
technology startups, which is is Kickstart Ventures Inc., to be able to enter the over-the-top
(OTT) industry, in which mobile contents and mobile apps belongs, in the future. But the said
venture is still in the early stages.
Threat 3: The current senate hearings on telecommunication services and the various legal
proceedings currently happening might add to the expenses of the telecommunication
industry players. This is critical given the fact that the industry is highly regulated and
government can invoke the licenses of industry players or impose additional fees (Macro
Analysis/Legal)
effectively defended its position against such threats. They are even getting positive
outcomes from this event as various redtapes and conflicting laws that hinder the business
operations of the telecommunication industry are now being exposed and slowly being
addressed.
Also, the threat that the senate might open the telecommunication industry in the
Philippines to foreign players is a big threat to the industry, especially now that the quality of
products and services of the top players in the country is poor compared to their ASEAN
counterparts.
Threat 4: The saturation of the mobile market and the decline of the fixed-line market can
adversely affect the revenues of industry as the said segments contribute around 64% and
26% of the total revenues of the industry in 2014 respectively. The biggest decline comes
from the fixed-line segment which is expected to have a CAGR of -2.79% and the mobile
segment is expected to slow down in growth with a forecast CAGR of 3% (Market Analysis)
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Globe Telecoms got a responsiveness rating of 2 for this threat as the company can
also be adversely affected by the said saturation, most especially in the mobile market as it
is currently the major source of revenue for the company. The company also has significant
exposure to the fixed-line segment that is forecasted to have the biggest decline.
Threat 5: The prepaid segment of the Philippines telecommunication industry posted a past
CAGR of -2.6%. This declining CAGR is still expected to continue in the future and further
accelerate to -10.34%
a big exposure on the prepaid segment of the industry consisting of around 56% of the
company’s total revenues which makes it more prone to the risk associated with the decline
of the said segment.
5) EFE MATRIX
Respon-
Importance Wt.
Opportunity Source siveness
Weight Score
Rating
Growth of the country's BPO and business sector Macro Analysis /

10% 3 0.3
due to GDP growth Economic
Current finance environment suitable for Macro Analysis /

12% 2 0.24
investments Economic
Macro Analysis /
E-commerce Growth 10% 3 0.3
Social / Cultural
Duopoly with no substitute industry 5 Forces 8% 4 0.32
Strong Growth in the upper income segment Market Analysis 10% 3 0.3
Growth on demand and development of new Macro Analysis /

8% 3 0.24
technologies in broadband Technological
Total 58% 1.7
Respon-
Importance Wt.
Threats siveness
Weight Score
Rating
Macro Analysis /
Calamity related risks 6% 3 0.18
Environmental
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Macro Analysis /
Growth of cheap voice and data messaging Apps 10% 2 0.2
Technological
Ongoing senate inquiry and legal proceedings Macro Analysis /

6% 3 0.18
against the industry Legal
Saturation of major product revenues streams Market Analysis 10% 2 0.2
Decline in the prepaid segment Market Analysis 10% 2 0.2
Total 42% 0.96
Grand Total 100% 2.66
Weighted Score
Opportunities 1.7
Threats 0.96
Total 2.66
6) SUMMARY AND CONCLUSION
Globe Telecoms got a moderate responsiveness rating of 2.66. This is mainly due to
some strong growth areas in its industry, most especially in the demand for internet
connectivity and broadband technologies and the growth on the postpaid segment of the
industry, wherein the company is one of the top players. This is complemented by the
current favorable fiscal environment in the Philippines that is suitable for further investments
in the said key growth areas. However, some key factors that tend to drag down the
responsiveness rating of the company are its relatively high level of debt and the saturation
of mobile segment products most especially the SMS and the fixed-line segment of the
country’s telecommunication industry.
VIII. INTERNAL FACTORS
1) MCKINSEY’S 7S FRAMEWORK
i. STRATEGY
Market Penetration Strategy
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The market development strategy of Globe Telecoms is to offer its products and
services in a customizable way to its broad range of customers so that they can cater each
customers unique individual needs.105
Conclusion: Good but not effective due to confusion by its customers
The company’s strategy of letting the customers customize the products and services
that they avail with the company only confuses the customers even further and subsequently
annoys them which leads to decrease in customer satisfaction and some of its promos
becomes unutilized. Also, the company’s customers tends to believe that the company is
giving them false marketing and sales pitches due to wrong products and services the
customer chooses because of the wide array of services it provides that tends to confuse
them. Globe Telecoms should be able to simplify their products and services so that
customers will not get confused.
Product Development Strategy
Globe Telecoms is currently embarking on a network modernization program that will

make its telecommunication infrastructure more advance compared to its competitors and
also ready it for future technological developments and demand of the telecommunication
industry’s products and services106
Conclusion: Good but results has yet to be seen
This is a good strategy in a way because this will enable Globe Telecoms to provide
a more technologically advanced network to its customers at a cheaper price in the future.
The only downside is that the current network is suffering in quality due to various network
configuration changes and downtimes that goes with the network modernization. The
company must be able to manage and minimize the impact of network modernization to its
current network to minimize its effect on its customer satisfaction.107
Cost Management Strategy
Globe Telecoms has exclusively partnered with Huawei Technologies and Alcatel
Lucent for the latter to swap out the company’s old network to a new, modernized network
105
https://www.globe.com.ph/press-room/share-of-customers-should-be-your-strategy
106
107
https://www.youtube.com/watch?v=HMEMk9bAcGc
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and to provide the company the equipments needed for the said upgrade. This exclusive
partnership enables the company to ask for flexible payment terms with Huawei and Alcatel
Lucent.108
Conclusion: Helpful in cost management but risk from default and dependence to one
supplier increase
This strategy can greatly cut the cost for the company’s network modernization but
one big concern here is that the company is relying too much on one supplier to provide
them the core services that they need which might spell the success or failure of the
company in the future.
Horizontal Integration Strategy
Globe Telecoms is currently in the process of converting Bayantel’s outstanding

debts into equity to gain control of the latter and restructure it. Globe Telecoms is just
awaiting NTC’s approval to proceed with the said acquisition.109
Conclusion: Good in increasing network capabilities of Globe Telecoms and at the same
time save on cost.
This is a good strategy for Globe Telecoms most especially now that its main rival,
PLDT, has acquired Digitel. This strategy will not only let the company gain market share
and size, it will also give Globe Telecoms more frequencies to be able to utilize and provide
additional bandwidth and subsequently more capacity and better service to its customers at
a lower cost.
ii. STRUCTURE
Globe Telecom’s organizational structure is a functional structure; it is also 6 levels

deep in the majority of Globe Telecoms internal groups. The company’s organizational
structure is headed by the CEO on the 1st level, then by the group’s respective chief’s on the
2nd level, then by the directors on their respective divisions on the 3rd level, then by the
managers on the 4th, by the supervisors on the 5th and finally by the rank and file employees
108
109
http://www.businessmirror.com.ph/globe-telecoms-acquisition-of-bayantel-to-provide-positive-
impact-to-consumers/
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on the 6th level. Around 39% of Globe Telecom’s employees are rank and file, 35% are
supervisory, 19% are managerial and 7% are executives. 110
Conclusion: Not effective as upper management loses clear visibility as to what is actually
happening on the lower levels.
Globe Telecom’s high hierarchical level is not effective most especially in a fast-
changing business environment as upper management does not have a clear visibility of
what is really happening on the ground and decisions and strategies tend to take more time
to be implemented properly. Also, coordination between groups tend to be slow as different
groups tend to have different objectives that makes coordination between then slow and
sometimes difficult.
Finally, goals and values are also not taken a high seriousness especially by the rank
and file employees and some task and functions are becoming redundant and top
management does not get a clear picture of what actually is happening on the ground. Globe
Telecoms must be able to trim down their hierarchical level. Below is a chart of Globe
Telecoms.
110
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SOURCE: http://www.globe.com.ph/corporate-governance/org-chart
iii. SYSTEMS
Globe Intranet
Globe Telecoms has its own private intranet network wherein all Globe employees
nationwide are able to do all internal business transactions. They connect to this private
network wherever they are, as long as they have an internet connection, via private VPN
connection that requires username and password and other security authentication to be
able to be accessed.
Conclusion: Good, Helpful, Effective and very efficient
This kind of system is very helpful and effective for Globe Telecoms most especially
that its employees are scattered to different areas in the Philippines as this enables all
employees of Globe to work real-time even if they are on different parts of the country. This
also enables its employees to do task that is normally can only be performed when at the
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office remotely. The company must utilize their intranet network more by providing work-
from-home or other remote marketing strategies that can increase employee and customer
satisfaction.
Google Mail for Enterprise
Globe Telecoms has partnered with Google Inc. for the later to be the company’s
corporate email provider. The email service that Google provides is not the usual email but
their enterprise email that is more secure and has more email, Google drives and sharing
capabilities.
Using Google as a provider of their corporate email not only enables Globe Telecom
employees to check their emails anywhere, as long as there is internet connection, it also
increases email reliability and minimizes email downtime and stress to its IT employees. The
company can also use this medium for further system enhancement like video conferencing
using google+, etc.
HR Mall
Globe Telecoms gets HR Mall as its service provider for all its HR-related IT needs. It
is a centralized internal human resource IT platform the Globe Telecom avails to handle all
its HR functions. It is where employees file timesheets, leaves, payslips and other HR
related concerns. This also can be accessed anywhere using the internet even the employee
is not connected to company’s intranet.
This system enables the company’s employees to check HR-related concerns easily
and remotely anytime, as long as there is an internet connection. This is a very good system
that not only speeds up human resource related concerns but also makes it convenient to
not only to Globe Telecom employees by also to Globe Telecom’s human resource
personnel. Globe Telecoms can further use this system in the future to include employee
programs such as gifts and rewards availment of its valued employees and other services.
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Network Operations Center (NOC)
This is the part of the company’s overall network operation system that’s in charge of
the company’s entire network and equipment related alarms and important remote
configuration changes. NOC is created not just for security purposes but also to centralize
proper coordination and visibility for top management. This is where the all restorations of
alarms and outages are coordinated and is also where initial troubleshooting was performed.
This is also where important and security related configurations like load and SIM
activations, SMS and call monitoring and even revenues per cell sites are measured.
By centralizing all network operations related issues in one place not only make
coordination and response fast and efficient it also increases management visibility of the
whole Globe Telecoms network. Further improvements can be done on this system by
improving the process of coordination with the remote and central operations personnel by
putting SLA or restoration time and sticking to the said SLA by heart.
Clarity and other vendor-specific equipment systems.
Different equipments used by Globe telecoms also have different IT systems that
operate them. So to be able to gather all needed data on these different IT systems
automatically, the company’s Network Operations Center uses Clarity as a means to pull all
critical data like system uptime, alarms, configuration changes, etc. of the majority of
telecommunication equipments of Globe Telecoms for it Engineers and Management.
This system enables Globe’s management to easily to network statistics easily from
different equipments from different vendors of Globe Telecoms. The only improvement is
Clarity must be able to show the reports generated on a user-friendly format.
Other Internally Developed Web browser based internal Sites
Globe Telecom encourages its employees to do all transactions via web to increase
efficiency and save on paper wastes. The company develops various internal websites that
can only be opened if you are connected to their intranet for security purposes. These sites
are company-wide and group-wide in nature that enables the company’s employees to be
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more efficient especially that its employees are scattered nationwide. A perfect example of
this is Globe ICON wherein all important company-wide announcements and employee
events are posted.
The various IT systems of Globe Telecoms that was developed specifically for the
needs of each group not only increase the efficiency of employees but also minimize errors
and makes working with other teams easy and more efficient. The only point of improvement
is sometimes these new systems are quite complicated to use. To fix this Globe should
include trainings and manual to follow when rolling out new IT systems like this.
iv. STYLE
Globe Telecom’s leadership style is quite democratic compared to other firms.

Although the majority of critical decisions are still being decided by upper management, the
lower level management is still encouraged to voice out their concerns and sometimes even
given the capability to decide on small decisions. Employee satisfaction, employee turnover
and efficiently working with other groups are part of the company’s management
performance ratings and are critically being looked on during promotions. Also, a
combination of Top-down and Bottoms-up approach are being implemented especially on
technical issues even if the majority of decisions are still done by Top-down approach
Conclusion: Good, Helpful, but less effective due to slow decision making
Globe Telecom’s leadership style not only increases the morale of employees but
also give more meaning to their works as they can see that they are part of the decision
making process. The only key issue here is that high hierarchical levels of the company can
slow down decision making and also some managers that were used to autocratic
leadership tend to bypass this leadership style. One way to speed up the decision making of
the company is to compensate the slowness due to democratic style of leadership by cutting
down its hierarchical level so that upper management can have a more clear visibility of the
lower levels and can work more efficiently and speed up decision making.
v. STAFF
Succession planning and promotions in Globe Telecoms is also clear; with each
employee has a designated rank and file, supervisory, managerial level. (eg, manager1,
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supervisor2, etc.) Also, employees can easily transfer groups if they want to provided that
they meet the needed grade requirement for the applied internal job opening.
The company also does not close its doors to previous employees who left the
company in the past for better opportunities elsewhere. As long as they have a good
standing with the company when they left, they can always return to the company, as long
as there are still vacancy in their positions.
Conclusion: Good, Helpful, and effective as this increases the flexibility and freedom to
choose their own career path of each employee.
Succession planning is quite clear for Globe Telecom employees. The only issue is
sometimes it takes a long time for managerial positions to get vacated. Also, The strategy
letting the company’s employees to easily transfer to other groups helps the company to
retain people, who instead of resigning and permanently leave the company, are given a
new chance by just transferring to another team thereby saving Globe resources on training
a new hire.
Also, the company is acknowledging its weakness when it comes to salary being
offered by telecommunication companies abroad by letting its previous employees to go
back and work again for the company when the time comes that they already have ample
savings and the already want to settle down permanently here in the Philippines with their
family. This good employee satisfaction can be seen by its high employee retention rate of
92% in 2013.111
vi. SKILLS
Globe Telecom’s developmental structure for its employee trainings follow a 70/20/10
development plan wherein 70% is from doing the actual task and functions, 20% from
coaching from seniors and immediate superiors, and 10% from formal trainings and actual
courses offered by the company. The company’s training modules have five focus areas
namely company culture, core and professional development, management and leadership,
safety, and function-related training programs. Below are the training programs being
implemented by Globe Telecoms.
 iLeadGlobe
111
https://www.globe.com.ph/documents/7122541/6d4bf07e-d0ff-42c4-869f-9368328c44de
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This is the program wherein employees are trained to be future leaders by teaching
them the 7 Globe Leadership Competencies namely People Orientation, Customer
Orientation, Personal Values, Entrepreneurial Mindset, Execution Excellence, Innovation
and Strategic Thinking.
 Partner University
Globe Telecoms also partners with high caliber Schools to train their employees and
developing them to be effective leaders. These high caliber partner schools includes Asian
Institute of Management (AIM) and Ateneo Center for Continuing Education
 Graduate 2 Globe
Globe Telecoms also partners with top schools to get top students and immerse
them to various Globe trainings, internship and cadetship activities to train them to become
future employees of the company.
 Customer First Circle
This is an initiative by Globe Telecoms of simplifying its business processes and

creates a customer-centric culture by using the Lean Six Sigma Methodology. The main goal
of this program is to drive costs down, improve customer experience and increase the
company’s revenues.112
SOURCE: https://www.globe.com.ph/documents/7122541/6d4bf07e-d0ff-42c4-869f-9368328c44de
112
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Conclusion: Good, Helpful, but less effective as there is less focus on customer satisfaction
training
The goal and intention of this development structure is good but the way it was
structured is mostly on hands-on training. This kind of developmental structure is only good if
your colleagues and immediate superiors are also good, but if they are bad, new hires tend
to also get the bad skills of the said bad mentors. Globe Telecoms must be able to strike a
balance where there are more formal trainings wherein employees can check whether the
teachings of their mentors are correct or not.
Also, the training programs implemented by the company wherein employees are
taught how to become good leaders for the company is good but the critical thing that’s
lacking are trainings that teaches its employees on how to focus more on the customer
needs and how to effectively increase customer satisfaction. Another thing that is lacking is
more technical trainings where employees are taught key technical skills and how to use
them to increase customer satisfaction.
The company’s partnership with prestigious schools is a good thing as the said
schools are the best when it comes to business and leadership. The only thing that is lacking
is partnership with institutions which can give the company more technical and customer
service trainings.
Also, Globe Telecom’s initiative of training current top college students and hiring
them once they graduate is a very effective program as this fills the gap in skills needed from
a classroom environment to an actual business environment and this helps students
transition from being students to being professionals.
Overall, the only thing that’s lacking is that the company must be able to improve on
its training programs. It should focus more on customer service in order to increase the
customer satisfaction of its subscribers or replace altogether the ineffective programs with
something that really adds value to the products and services the company offers.
vii. SHARED VALUES
Globe Telecoms does have a vision, mission and core values. These shared values
and goals are also put on various parts of Globe’s offices to remind Globe employees of
these. The shared Vision, Mission and core values is are as follows:
Vision Statement: “ The happiest customers, employees and shareholders.”
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Mission Statement: “ We create a wonderful world for people, business and the nation.”
Core Values: We put our customers first, Our people makes the difference, We act with
integrity, We care like an owner, We keep things simple, To us, it’s be fast or be last
Conclusion: Good but less effective as employees tend to ignore them
Due to the high hierarchical levels and broadness of the company’s corporate
structure, these shared values and goals are not taken that level of seriousness by its
employees most especially by the rank and file. The company must be able to trim down the
corporate structure to a lower hierarchical level and be able to streamline its process of
making their employees believe more and embody the company’s shared values and goals.
2) COMPANY INTERNAL AUDIT
i. MANAGEMENT AUDIT
The top management of Globe Telecoms regularly conducts strategic meetings and
seminars to assess if the goals of the company for each year are being met and formulate
the company’s strategies for the next years. The company also has a balance scorecard to
check if the company goals are being met. Also, each internal group in the company have
their group’s goals aligned to the said balance scorecards. Each department in the company
also has its own objectives and goals that are aligned to the section’s goals and are also
aligned with the group’s goals and the group’s goals are also aligned to the company’s
balanced scorecard. The said objectives are being measured on a monthly, quarterly and
yearly basis to see the progress of each goal. Also, KPI’s and incentives are tied up on
meeting the said goals.
Top management also conducts annual strategic planning conference for the next
years. This is normally done on the 3rd quarter of the current year so that the goals of each
group will be ready by 1st quarter of the coming year, before the annual town hall meeting of
each group. Also, even top performing rank and file and supervisors are sometimes invited
to participate for them to share their inputs on the decision making process.
When it comes to delegating the authority properly, the company encourages even
supervisors to be hands-off to the actual group task as much as possible. They are
encouraged to just supervise the normal operations of their respective teams. Managers are
also encouraged to focus more to see the macro-operating level of each team and are
encouraged to look to and administer the proper coordination of their respective teams with
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other groups. Supervisors and Managers are just given the green light to interfere with the
normal operations of their group if an internal or external escalation is received.
When it comes to organizational structure of the company, Globe Telecom’s

hierarchical structure level is too high as in most cases it is 6 levels deep. This makes
management visibility to what is happening on the ground not clear and decision making
slow. On the functional division, the company’s structure is quite appropriate with most of the
improvements are only needed on proper coordination with each functional divisions.
When it comes to job description, one of the skills the company is keen on when
hiring new employees is being flexible with their job functions. An oftentimes what’s written
on paper is not the only functions the employees actually does. Employees are expected to
be flexible to be able to easily adapt with the fast-changing business needs. Job functions
also tend to change often due to organizational realignment and reorganization that is
common in the company.
Employee morale is still above the average as the company constantly performs
employee satisfaction survey. In their latest survey, the company’s employees gave the
company a rating of 73.48% in employee satisfaction. Also, employee retention rate
currently stands at 92%.113 But this somewhat restrained due to low salary compared to
foreign companies and the frequent reorganizations and realignment within the company.
Finally, Globe Telecoms also have annual incentive programs given to its employees
who can hit, or exceed, their respective group’s goals. The company also gives out prize and
item rewards and recognitions to employees that gain respective years of tenure with the
company. Also, promotions are tied to the individual and their respective group’s
performance.
ii. MARKETING AUDIT
Globe Telecoms had its target market effectively segmented. There are various
internal groups in the company that are task to see where the market is going and prepare
products and service for the said direction of the market. This can be seen by the way their
products and services are being offered to target specific segments. Each segment has its
own brand and marketing strategies in place. The pricing of the said products is within the
industry average but still requires improvement especially on promo mix. The brands being
offered for each segment are as follows.
113
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o Globe Postpaid and Globe business for Upper Segment
o Globe Prepaid for middle segment
o TM for lower segment
It is also important to note that the telecommunications industry in the Philippines is

effectively becoming a duopoly with the acquisition of Digitel by the PLDT group and the
ongoing acquisition of Bayantel by Globe Telecoms. The company is very well positioned in
the telecommunication industry in the country as it is one of the two big players. Also, the
total market share of the company, in terms of revenues, grew from 34.67% in 2013 to
36.68% in 2014 and registered a 5 year CAGR of 12.17%.
Having sub-distributors in key areas around the Philippines is effective for the Globe
Telecoms as it enables the company to serve more and far reaching customers. Also, having
retailers at the sari-sari store level enables the company to reach individual subscribers
more efficiently. This kind of distribution strategy enables the company to save cost as this
model requires very little expense from them. The only tradeoff is that they are required to
give up revenues and give it to the said sub-distributors. To complement this, the company’s
internal sales organization is also structured to have a wide reach and to be easily
accessible by its subscribers. The company has stores strategically positioned in high traffic
places like malls and city centers.
When it comes to advertising and promotions, the company’s advertising and

promotions is quite effective and brand visibility is quite good. This is due to high advertising
and promotion expenses of the company. Marketing is one of the highest contributors to the
company’s total operating expenses. Advertising and promotions amounts to around Php8
billion in 2014 or 19.33% of the company’s total operating expenses. This is due to the fact
that the company hires professional marketing experts from various industries to spearhead
its various marketing initiatives.
But one of the key issues that Globe Telecoms is currently facing is its poor product
quality and customer service. This can be seen by the rising customer complaints against
the company and the ongoing senate hearing against telecommunication players are a sign
of bad quality, not only by the company, but the industry as a whole.
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iii. FINANCE / ACCOUNTING AUDIT
In terms of financial standing, Globe Telecoms is strong in its activity ratios, more
specifically its total assets turnover ratio, compared to the industry. The company’s total
assets turnover is 0.55 compared to 0.47 for the industry.
Subsequently, the company is quite weak on its liquidity and leverage ratio. This is
mainly due to the high capital requirements of the telecommunication industry. Compared to
the industry, Globe telecoms has a current ratio 0.77 compared to the industry’s 0.65 and a
long term debt-to-equity ratio of 1.08 compared to 0.97 for the industry.
Even if the company has a weak rating on its liquidity and leverage ratios, the
company may still be able to raise both short term and long term capital if needed, as its
liquidity and leverage ratios are still near the industry average. The company has a current
ratio of 0.77 against the industry’s 0.65, its quick ratio is 0.57 compared to the industry’s
0.48, debt-to-equity ratio of the company is 2.29 compared to the industry’s 2.27 and the
company has a long term debt-to-equity ratio of 1.08 compared to the industry’s 0.97. Also,
the company has a good brand and constant stream of revenues needed to pay up for the
short term debt if needed.
But when it comes to current internal funds, the company still has a sufficient working
capital. Even if the company has a current ratio lower than 1, which is 0.77, it is still higher
compared to the industry average of 0.65. Also, AR turnover is at 5.78 which means that the
current assets can be replenish every 63.15 days. This is still near the industry’s AR turnover
average of 5.82.
The company also has a reasonable capital budgeting policies as its amount of
leverage is still within reasonable levels, even if the telecommunications industry requires a
large amount of capital. The key for the company is to properly manage its liabilities and
avoid defaulting. Key to this is the company’s Chief Financial Officer which is Mr. Alberto M.
de Larrazabal, who has been with the company since 2006. Mr de Larrazabal had more than
twenty years of extensive finance experience. He used to be the Head of Consumer sector
for JP Morgan HK, CFO of San Miguel Corp and CFO of Marsman Drysdale Corp. before
joining the company.
iv. OPERATIONS AUDIT
When it comes to operations, Globe Telecoms has various facilities on all provinces
in the Philippines. These are strategically located to provide its customers the needed
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products and service of the company. The company has over 6,500 cellsites nationwide
which is strategically positioned to provide the optimal coverage to its customers.
In order to maintain this network infrastructure, the company has a department

(Facilities Management Department or FACMAN) whose job is to routinely maintain the said
facilities and equipments nationwide. The company also employs several sub-contractors
that help manage the company’s support facilities like air-conditioning units, towers, land and
buildings for possible insect infestation and preventive maintenance. Also, the company has
support agreement with key product suppliers for technical support and escalation if
equipment issues are outside the expertise of the company’s engineers. The company’s
employees are also technically competent as they are the pioneer in GSM technology in the
Philippines. They are also the first full 3G enabled network in the country and are also the
first in the country to offer LTE technology to its customers.
When it comes to inventory management, the company does not have a supply of
finished goods as the company does not provide any actual tangible products to its
customer. The company only provides the telecommunication service so no significant level
of inventory is available. The only inventories that the company has are for spare parts and
equipments needed to maintain its telecommunication network infrastructure.
Globe Telecoms does not necessarily need inventory control for its products as they
have a very low level of product inventory, most of which are just mobile phones and
modems needed to deliver its service to customers. But the company has a department
designated to handle spare parts of its equipments but for highly technical parts, the
designated technology suppliers are the ones task to provide for it.
v. RESEARCH AND DEVELOPMENT AUDIT
Globe Telecoms does not have a Research and Development department as most of
the technologies that the company uses are supplied by vendors who specialize on the said
technologies. This is due to the fact the development of new technologies for the
telecommunication industries are highly technical, requires a very large amount of capital
and various patents and trademarks are already imposed on the said technologies that it is
not economical for Globe Telecoms to internally develop such technologies.
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vi. COMPUTER INFORMATION SYSTEMS AUDIT
Information systems are quite important and widely used in Globe Telecoms, given
the fact that the company is in the forefront of the information technology development of the
Philippines, the company requires all employees to understand the benefits IT systems have
in their everyday lives. The company is also implementing a paperless way of doing all
business transactions by utilizing its IT business infrastructure. This was being pushed by
top management to make the company paperless and more efficient. Almost all approvals,
transfer of assets, request, and other business transactions in the company are done online
using the company’s IT business infrastructure.
The company also has a very competent Chief Information Officer that heads all the
company’s IT initiatives; he is Henry Rhoel R. Aguda. Before joining Globe Telecoms, Mr.
Aguda was the CTO of GSIS, Group CITO of Digitel, VP for APAC at Nextel
Communications, and also held key executive positions at Bayantel, Fujitsu Philippines and
Computer Information Systems Inc. He was also the 2010 ASEAN CIO of the Year for the
Government Sector. Also, most of the IT strategists of the company have long experience in
the IT environment of various competitors. Some of them even are the ones that created the
IT infrastructure of rival firms.
Globe Telecoms also manages its IT infrastructure regularly. The data in the
company’s information system are updated real-time. Various email and SMS alerts are also
sent to designated approvers to inform them of the information updates and the needed next
course of action from them. Also, backups and cleanups of the company’s IT systems are
performed regularly by its IT department. Security is also very important at Globe Telecoms,
all IT business platforms in the company are password protected, even employee computers
are password protected which are also automatically triggered to let all users change their
passwords every month for security. Various upgrades and system patches are also
routinely and regularly done by its IT group to ensure the reliability of the company’s IT
infrastructure.
Also, the company’s IT group ensures that the user interfaces of the company’s IT
infrastructure are user-friendly and can easily be understood with proper instructions and
directions on various parts of the system. There is also an IT helpdesk that employees can
call for assistance on more complex issues. Various trainings and workshops are also
conducted before an IT system is put in production and various manuals and instruction
guides are available online for user references.
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3) KEY FINANCIAL ANALYSIS
i. GLOBE TELECOMS SALES ANALYSIS BY PRODUCT
All the product categories of Globe Telecoms are growing except for the fixed-line
voice segment which registers a CAGR of -0.24%. The main contributor to the company’s
total revenues, which are the mobile voice and SMS segment, are still growing at a CAGR of
8.53% and 10.32% respectively but at a slower rate compared to the company’s total growth
of 12.17%. The products with the highest CAGR are mobile data and broadband which have
a CAGR of 24.20% and 21.89% respectively. Below is a table of total sales values for each
product and a graph from 2010 up to 2014.
2010 2011 2012 2013 2014 CAGR

In Pesos
SALES
VALUE
Moblie
24,998,000,000 25,752,000,000 32,446,000,000 32,367,000,000 34,684,000,000 8.53%
Voice
SMS 19,491,000,000 21,552,000,000 26,552,000,000 28,794,000,000 29,079,000,000 10.52%
Mobile
6,013,000,000 6,648,000,000 8,191,000,000 11,603,000,000 14,306,000,000 24.20%
Data
Fixed Line
2,816,000,000 2,570,000,000 2,665,000,000 2,605,000,000 2,789,000,000 (0.24%)
Voice
Fixed Line
3,488,000,000 3,792,000,000 4,167,000,000 4,691,000,000 5,480,000,000 11.96%
Data
5,748,000,000 7,496,000,000 8,721,000,000 10,440,000,000 12,687,000,000 21.89%

Broadband
Total 62,554,000,000 67,810,000,000 82,742,000,000 90,500,000,000 99,025,000,000 12.17%
% Sales
Moblie
39.96% 37.98% 39.21% 35.76% 35.03% (3.24%)
Voice
SMS 31.16% 31.78% 32.09% 31.82% 29.37% (1.47%)
Mobile
9.61% 9.80% 9.90% 12.82% 14.45% 10.72%
Data
Fixed Line
4.50% 3.79% 3.22% 2.88% 2.82% (11.06%)
Data
Fixed Line
5.58% 5.59% 5.04% 5.18% 5.53% (0.19%)
Voice
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9.19% 11.05% 10.54% 11.54% 12.81% 8.66%
Broadband
Total 100.00% 100.00% 100.00% 100.00% 100.00%
Relevance to the Firm
The company’s main sources of revenues, which are the mobile voice and SMS
products, are slowing in growth. This means that the company should look for, invest and
gain significant market share in the high growth areas of the industry. Also, the company
must be able to efficiently channel the revenues from the high contributor products to be
invested in the development of products and services from the high growth areas of the
business.
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ii. GLOBE TELECOMS SALES ANALYSIS BY SEGMENTS
The company’s postpaid and upper segment of subscribers posted the strongest
growth rates in the previous years, posting a CAGR of 16.47% from 2010 to 2014. The
company’s prepaid segment continues to grow posting a CAGR of 7.38% but slower
compared to the company’s average CAGR of 10.02%. Also, the company’s lower segment
also posted strong growth with a CAGR of 13.67% but purchasing power of this segment is
not as strong as that of the upper segment but this might still be a good source of revenues
for the company. Below are graphical and tabular representations of the company’s sales
revenue by segment.
2010 2011 2012 2013 2014 CAGR

In Pesos
SALES
VALUE
Upper
21,847,185,990 23,769,126,264 31,730,589,756 36,224,439,284 40,207,196,600 16.47%
Segment
Middle
25,898,588,352 27,461,279,232 29,592,255,600 30,179,258,172 30,079,483,200 3.81%
Segment
Lower
12,773,286,624 14,173,122,960 16,498,645,200 18,985,414,020 21,327,029,916 13.67%
Segment
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Total 60,519,060,966 65,403,528,456 77,821,490,556 85,389,111,476 91,613,709,716 10.92%
% Sales
Contribution
Upper
36.10% 36.34% 40.77% 42.42% 43.89% 5.01%
Segment
Middle
42.79% 41.99% 38.03% 35.34% 32.83% (6.41%)
Segment
Lower
21.11% 21.67% 21.20% 22.23% 23.28% 2.48%
Segment
Total 100.00% 100.00% 100.00% 100.00% 100.00%
2010 2011 2012 2013 2014 CAGR

In Pesos
SALES
VALUE
Postpaid 21,847,185,990 23,769,126,264 31,730,589,756 36,224,439,284 40,207,196,600 16.47%
Prepaid 38,671,874,976 41,634,402,192 46,090,900,800 49,164,672,192 51,406,513,116 7.38%
Total 60,519,060,966 65,403,528,456 77,821,490,556 85,389,111,476 91,613,709,716 10.92%
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% Sales
Contribution
Postpaid 36.10% 36.34% 40.77% 42.42% 43.89% 5.01%

Prepaid 63.90% 63.66% 59.23% 57.58% 56.11% (3.20%)
Total 100.00% 100.00% 100.00% 100.00% 100.00%
Globe Telecoms is well positioned to take advantage of the growing postpaid and
upper segments as they are the number one player in the postpaid segment of the industry.
The key factor for the company is to be able to provide good customer service to its current
customers and at the same time get more subscribers from this segment by offering good
quality products and services and effectively market the said products and services.
iii. GLOBE TELECOMS GROSS PROFIT ANALYSIS
The main sources of the company’s gross profit are still mobile voice and SMS,
which is contributes 39% and 32% to the company’s total gross profit in 2014. The main
concern is that the CAGR of the 2 main revenue sources are slowing down to 8.54% and
8.27% compared to the company’s total CAGR of 10.95%. The company’s fixed-line voice
product is the only negative performer which posted a -5.60% CAGR.
Mobile data and broadband products, on the other hand, are the products that offer
good sources of growth in gross profit in the future. They are currently just 15.98% and
11.67% of the total gross profit of the company but the 2 have a high CAGR of 35% for
mobile data and 18% for broadband. Below is a graphical and tabular representation of the
company’s gross profit performance from 2010 to 2014.
2010 2011 2012 2013 2014 CAGR

In Pesos
GROSS
PROFIT
Mobile
24,857,088,000 30,801,276,333 32,287,368,000 32,165,247,667 34,500,167,667 8.54%
Voice
SMS 21,028,238,000 27,619,276,333 26,393,368,000 28,592,247,667 28,895,167,667 8.27%
Mobile Data 4,194,938,000 4,794,276,333 8,032,368,000 11,401,247,667 14,122,167,667 35.45%
Fixed Line 3,458,757,000 3,702,337,000 4,092,847,667 4,688,403,333 5,478,188,333 12.18%
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Data
Fixed Line
(371,357,000) (1,990,161,000) (3,901,255,333) (5,424,740,667) (4,947,099,667) (91.05%)
Voice
Broadband 5,148,376,000 6,950,406,000 8,158,944,667 9,124,488,333 10,315,448,333 18.97%
TOTAL 58,316,040,000 71,877,411,000 75,063,641,000 80,546,894,000 88,364,040,000 10.95%
% Gross
Profit
Contribution
Mobile
42.62% 42.85% 43.01% 39.93% 39.04%
Voice
SMS 36.06% 38.43% 35.16% 35.50% 32.70%
Mobile Data 7.19% 6.67% 10.70% 14.15% 15.98%
Fixed Line
5.93% 5.15% 5.45% 5.82% 6.20%
Data
Fixed Line
(0.64%) (2.77%) (5.20%) (6.73%) (5.60%)
Voice
Broadband 8.83% 9.67% 10.87% 11.33% 11.67%
TOTAL 100.00% 100.00% 100.00% 100.00% 100.00%
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The company’s possible future gross profit contributors are the mobile data and
broadband products for its high future growth potentials. While the company still has a safe
source of current gross profit in its mobile voice and SMS products, it has a slower growth
rate due to the saturation of the said product segments. The company must also minimize its
exposure to the fixed-line voice as it is deducting to the total gross profit of the company
even if they cannot get away with the said service as they are mandated by law to provide it
by its telecommunication license.
iv. GLOBE TELECOMS OPERATING EXPENSE ANALYSIS
Below is a table of Globe Telecom’s operating expenses and its corresponding

growth rate year-on-year from 2010 up to 2014.
2010 2011 2012 2013 2014 CAGR

In Pesos
Operating
Expenses
Staff Costs 5,088,990,000 5,809,831,000 6,426,592,000 7,473,499,000 8,665,757,000 14.23%
Selling,
advertising and 4,268,843,000 4,756,425,000 6,440,554,000 7,014,729,000 8,000,982,000 17.01%
promotions
Professional
and other
3,587,635,000 4,214,284,000 5,193,217,000 5,966,481,000 6,653,441,000 16.70%
contracted
services
Utilities,
supplies and
other 3,338,608,000 3,804,762,000 4,260,773,000 4,399,110,000 4,481,830,000 7.64%
administrative
expenses
Repair and
3,272,514,000 3,522,778,000 3,672,038,000 3,656,671,000 4,099,986,000 5.80%
maintenance
Rent 2,808,906,000 2,830,382,000 3,153,505,000 3,534,975,000 4,116,372,000 10.03%
Insurance and
security 1,701,258,000 1,381,633,000 1,330,648,000 1,383,294,000 1,439,942,000 (4.08%)
services
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Taxes and
1,175,417,000 1,380,270,000 1,595,842,000 2,055,909,000 1,787,694,000 11.05%
licenses
Courier,
delivery and
984,274,000 1,116,181,000 1,055,375,000 1,320,112,000 1,486,356,000 10.85%
miscellaneous
expenses
Others 465,659,000 487,917,000 473,867,000 514,059,000 650,517,000 8.72%
Total 26,692,104,000 29,304,463,000 33,602,411,000 37,318,839,000 41,382,877,000 11.59%
2010 2011 2012 2013 2014

In %
Operating Expenses
Staff Costs 19.07% 19.83% 19.13% 20.03% 20.94%
Selling, advertising and promotions 15.99% 16.23% 19.17% 18.80% 19.33%
Professional and other contracted services 13.44% 14.38% 15.45% 15.99% 16.08%
Utilities, supplies and other administrative
12.51% 12.98% 12.68% 11.79% 10.83%
expenses
Repair and maintenance 12.26% 12.02% 10.93% 9.80% 9.91%
Rent 10.52% 9.66% 9.38% 9.47% 9.95%
Insurance and security services 6.37% 4.71% 3.96% 3.71% 3.48%
Taxes and licenses 4.40% 4.71% 4.75% 5.51% 4.32%
Courier, delivery and miscellaneous expenses 3.69% 3.81% 3.14% 3.54% 3.59%
Others 1.74% 1.66% 1.41% 1.38% 1.57%
Total 100.00% 100.00% 100.00% 100.00% 100.00%
2010 2011 2012 2013 2014

Growth / Decline
Operating Expenses
Staff Costs - 14.16% 10.62% 16.29% 15.95%
Selling, advertising and promotions - 11.42% 35.41% 8.91% 14.06%
Professional and other contracted services - 17.47% 23.23% 14.89% 11.51%
Utilities, supplies and other administrative
- 13.96% 11.99% 3.25% 1.88%
expenses
Repair and maintenance - 7.65% 4.24% (0.42%) 12.12%
Rent - 0.76% 11.42% 12.10% 16.45%
Insurance and security services - (18.79%) (3.69%) 3.96% 4.10%
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Taxes and licenses - 17.43% 15.62% 28.83% (13.05%)
Courier, delivery and miscellaneous expenses - 13.40% (5.45%) 25.08% 12.59%
Others - 4.78% (2.88%) 8.48% 26.55%
Total Growth / Decline - 9.79% 14.67% 11.06% 10.89%
The top contributors to the company’s operating expenses are its staff cost, which
mostly compose of its employees salaries, selling, advertising and promotions, and
professional and other contracted services which posted a CAGR of 14.23%, 17.01% and
16.70% respectively. Even if the said expenses cannot be avoided, the company must
closely monitor the said expenses and see if it is really getting the actual returns needed in
incurring the said expenses.
v. LIQUIDITY RATIOS
KEY
Singtel’s COMPANY'S INDUSTRY
TYPE 2014 2013 2012 COMPETITORS'
Average AVERAGE AVE.
AVE.
Current
Ratio 0.77 0.65 0.74 0.76 0.69 0.53 0.65
Quick
Ratio 0.57 0.41 0.41 0.73 0.45 0.39 0.48
The company’s liquidity ratios in 2014 are slightly better than its key competitor but
not that better compared to Singtel. Its current ratio in 2014 is higher than its key competitor;
this is due to high accounts payable and accrued expenses of the key competitor. It is also
worth noting that the biggest contributor to the current asset account of each company is
accounts receivables. Also both Globe Telecom's and its key competitor's quick ratio is
almost the same level.
Possible Strategy
Globe Telecoms can further improve this ratio by cutting its accounts payable which
is the highest contributor to its current liabilities. Also, the company can improve on the
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collection period of its receivables by shortening it so that more liquid assets can become
available and also minimizing the risk of default in its receivables.
vi. LEVERAGE RATIOS
KEY
AVE.
Debt to
total
0.70 0.74 0.69 0.39 0.69 0.69 0.70
assets
ratio
Debt to
equity 2.29 2.82 2.24 0.65 2.26 2.24 2.27
ratio
Long
term debt
1.08 1.40 1.10 0.3 1.09 0.86 0.97
to equity
ratio
The leverage ratios of Globe Telecoms in 2014 are still at par with the
telecommunication industry in the Philippines and its key competitor’s average. But if
compared to the ratios of Singtel, we can see a big difference in financial standing. The high
average leverage ratio of the industry is justified given that the telecommunications industry
is a capital extensive industry.
The company's Debt to Asset ratio in 2014 is higher than the safety standard of 0.50
which means that the company is employing more leverage in its business. But those levels
are still within the industry and its key competitor’s average. Also, the company’s Debt to
Equity ratio shows that for every one equity of the company, there is an equivalent 2.29 debt.
This is quite high and above the safe level of 1:1 ratio. The company’s long term debt to
equity ratio is also high. The said ratio shows that for every 1 equity of the company there is
a corresponding 1.08 long term debt which shows that most of Globe Telecom's liabilities
are coming from long term debts. This is quite high compared to the 0.97 ratio of the industry
and 0.86 for its key competitor. The said figures are understandable given the fact that
telecommunications industry requires a high capital requirement.
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Finally, the times-interest earned of Globe Telecoms in 2014 shows that the interest
that the company pays is 9.33 times its EBIT. This level is still within the industry range.
Possible Strategy
Globe Telecoms must closely monitor its leverage ratios as this might be a big
source of expense if not controlled properly. The company must be able to manage and trim
down its accounts payables which a big contributor to this ratio next to long term debt. Also,
the company can still improve on this ratio given that the current fiscal environment in the
Philippines offers low interest rates. It is critical that the company must improve this ratio to
lower its risk from financial fluctuations in the future.
vii. ACTIVITY RATIOS
KEY
AVE.
Inventory
3.35 2.81 3.70 69.58 3.23 3.64 3.50
turnover
Fixed
Assets 0.84 0.82 0.82 1.52 0.79 0.86 0.85
turnover
Total
Assets 0.55 0.57 0.56 0.43 0.55 0.38 0.47
turnover
AR
5.78 6.26 7.14 4.74 6.56 5.86 5.82
turnover
Average
collection 63.15 58.32 51.11 77.03 56.05 62.27 62.71
period
The activity ratios of Globe Telecoms in 2014 are still within the industry’s average,
and surprisingly even better than that of Singtel, especially in the average collection period,
but some improvements can still be done in order for the company to improve its financial
position and subsequently, gain a competitive edge from its competitors.
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The company's inventory turnover is lower compared to its key competitor which
means that inventories are not used up more often. This is quite good because
telecommunication industry is a service industry and most of the inventories of this industry
are from spare parts which shows that equipments are rarely impaired compared to its
competitors. The company’s fixed assets turnover is also within the industry level which
shows that the company is using the useful life of its fixed assets as efficiently as its
competitors. Also, the company’s total assets turnover ratio is higher than its key competitor
which shows that the company is utilizing its total assets more efficiently than its key
competitor. And finally, the company's AR turnover and average collection period still close
to the industry and its key competitor’s average.
Possible Strategy
Globe Telecoms can still improve on its activity ratios by lowering the inventory levels
to minimize cost and improve efficiency. Also, the company must improve its receivable
collection period as receivables takes the bulk of its current assets and is less liquid
compared to cash and minimize the possible impact of bad receivables to the company and
improve liquidity.
viii. PROFITABILTIY RATIOS
KEY
AVE.
Gross profit
89.67% 89.54% 91.12% - 90.52% 92.00% 90.84%
margin
Operating
41.42% 40.56% 42.00% 30% 43.70% 50.60% 46.01%
profit margin
Net operating
12.72% 4.99% 7.78% 21.7% 9.79% 19.94% 16.33%
margin
Return on
7.32% 2.98% 4.54% 9.3% 5.58% 7.80% 7.56%
total assets
Return on
stockholders' 24.08% 11.40% 14.71% 15.3% 17.60% 25.30% 24.69%
equity
Earnings per SGD
100.36 37.22 51.38 65.68 157.51 128.94
share 22.87
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The profitability ratios of Globe Telecoms in 2014 is lower compared to the industry
and its competitors average, but still one of the highest in Philippines. The company’s profit
margin is quite high, but lower than its key competitors profit margin. This high profit margin
is common on the telecommunication industry as its provided services rely mostly on
existing equipment infrastructure already in place with very minimal actual goods being sold.
Another important thing to note is that operating expense is one of the biggest
expenses of the telecommunication industry. Globe Telecoms still has a higher operating
profit margin compared to its key competitor which means that the company is controlling its
operating expenses better than its key competitor.
Also, the company's net operating margin is significantly lower compared to its key
competitor and is in a declining rate. The high net operating margin of its key competitor is
due to the fact that it is getting more revenues from its non-core businesses.
The return on assets of Globe Telecoms is lower compared to its key competitor due
to the fact that its key competitor is getting more revenues from other non-core businesses.
The company’s return on equity is lower compared to its key competitor but is still quite at a
respectable level due to the fact that its competitor are getting more revenues from other
non-core businesses and the high leverage the company has compared to its key
competitor.
When comparing to the performance of Singtel, a key thing that was noted is that a
telecommunication company can still be profitable even if you invest heavily in making the
quality of the products and services that the company offers to its customers the best in the
world.
Finally, earnings per share of Globe Telecoms is at a declining pace due to the
saturation of its key product segments but the company’s 2014 price to earnings ratio is
higher compared to key competitor which means investors are putting more premium and
confidence to the stocks of Globe Telecom compared to its key competitor's stock.
Possible Strategy
Due to some legal restraint on the industry when it comes to raising prices, Globe
Telecoms can improve on its profitability ratios by getting more subscribers and utilize the
company’s assets and talents more efficiently to increase sales. Also, finding a strategy that
can improve its revenues by investing and getting more market share on product segments
with high future growth potentials and minimizing the advertising and promotion cost as
those are the major contributor to cost of sales. The company can also improve on this by
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streamlining and improving its business processes and minimize redundant functions and
cutting the hierarchical level of the company as staff cost is one of the biggest contributors to
its operating expenses.
Also, Globe Telecoms must be able to find a strategy that can improve its net
operation margin by improving on its core business, and not through diversifying to other
revenue streams like its key competitor. Also, the company must also watch its debt level as
this might improve the company’s return on equity in a wrong way as increasing the level of
debt of a company also increases its return on equity.
Finally, better earnings growth compared to its key competitor is one of the biggest
reasons for this higher premium that outside investors put on the company’s stock. Globe
Telecoms must be able to maintain this high growth in earnings in the future to maintain, or
even improve, on its price to earnings ratio.
ix. GROWTH RATIOS
KEY
TYPE 2014 2013 2012 2011 COMPETITORS'
AVE.
Sales 8.51% 10.06% 20.79% - 1.56%
Net income 176.67% -29.39% -31.36% - -3.84%

Earnings per share
169.64% -27.56% -30.35% - -3.76%
Dividends per share 75 67 65 62 69
The growth ratios of Globe Telecoms in 2014 are better compared to its key
competitors as almost all of the key factors for this ratio grew. On the other hand, the key
competitor’s growth ratios declined. The company’s sales grew by 8.51% but slower in
growth compared to previous years due to the saturation of its key product segments. But
the said growth rate is still faster compared to its key competitor. The company’s net income
also grew faster than its key competitors due to the strong performance of almost all
business units of the company in 2014. Subsequently, the growth in earnings per share and
the dividends given by the company to its shareholders in 2014 was due to higher net
income in 2014.
Possible Strategy
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In terms of growth ratios, Globe Telecoms performed well in 2014. The key is
sustaining the said growth rates in the future in order to gain the undisputable leadership in
the telecommunications industry in the Philippines. The company must be able to find a
strategy that can improve this by investing and getting more subscribers and market share
on product segments with high current and future growth potentials.
IX. INTERNAL FACTOR EVALUATION (IFE)
1) STRENGTHS AND IMPORTANCE WEIGHT
STRENGTH 1: Prestigious Brand Name (Strategic Positioning, CPM)
This factor was given the lowest importance weight of 7% as brand prestige is
important to customers only if goes with quality and reliability, most especially now that
customers are asking more value for their money and the subscribers in the Philippines are
comparing the quality of the products and services they provide to other ASEAN countries.
Brand prestige will only matter to customers if the products and services provided by a
specific telecommunication company also had a high quality.
STRENGTH 2: Large Postpaid Market Share (Company Sales Analysis)
This was given a moderate importance weight due to the fact that even if you have
the largest market share of this segment, subscribers can switch to other providers if they
are not satisfied with the quality your products and services. Market share might be
important because it gives you an edge when it comes to brand loyalty and word of mouth,
but this can go away if quality and customer satisfaction is not satisfied.
STRENGTH 3: Complete Product & Service Portfolio Under One Brand and Company
(Company Sales Analysis, Company Introduction)
This factor was also given a moderate importance weight of all the strengths as this
factor deals with how the company can easily provide the products and services they
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specifically needs. Also, having just one brand for all the products and services enables the
company to let their products and services work together and support each one during
outages or restorations and makes packaging of promos easier.
STRENGTH 4: Modern Products & Services (7s Mckinsey)
This factor was given the highest weight of all the strengths as this factor deals with
how a specific telecommunication company was able to provide to its subscribers the most
modern and up-to-date products and services.
2) WEAKNESSES AND IMPORTANCE WEIGHT
WEAKNESS 1: Smaller Network Infrastructure Compared to Key Competitor (CPM)
This factor was given a satisfactory weight as this deals with how broad are the
network reach and the capacity that of a specific telecommunication company can handle.
WEAKNESS 2: Smaller Resources Compared to Key Competitor (Key Financial Ratios)
This factor was given a moderately high importance weight as it deals with how much
resources a specific player has that it can allocate and invest if a opportunity arises. The
thing that keeps this factor from getting the highest score is that there are other factors that
should still be considered before it can effectively allocate its resources such as demand and
customer satisfaction.
WEAKNESS 3: Poor Customer Satisfaction due to Corporate Hierarchy and lack of

Customer Service Skills of Employees (7s Mckinsey)
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This factor was given the highest score in importance weight as customers nowadays
demand better quality of service to telecommunication players with increasing complaints
due to this issue. This will be the critical deciding factor for a player to gain leadership in the
telecommunication industry especially now that comparisons with other ASEAN countries
are being done by subscribers.
WEAKNESS 4: Poor Network Reliabilty (CPM)
This factor was also given the highest score in importance weight as this also deals
with the quality of products and services a specific telecommunication company delivers to
customers.
WEAKNESS 5: High Level of Debt (Key Financial Ratio Analysis)
This factor was given a moderately high rating in importance weight as this factor can
hinder as specific player from exploiting potential future opportunities in the
telecommunication industry. This might also add to high expense for a specific company if
not managed properly.
WEAKNESS 6: Current Limited Number of Key Suppliers (7s Mckinsey)
This factor was given a low importance weight score as this factor deals with how a
specific player is highly dependent on a specific supplier to deliver for him the needed
products and services its customer requires. This might be critical in a way but the company
is still in control and can easily be remedied once problems occur by getting a new suppliers.
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3) STRENGHTS AND COMPANY RATINGS
STRENGTH 1: Prestigious Brand Name (Strategic Positioning, CPM)
Company Rating: 3
Globe Telecoms got a rating of 3 for this factor as its brand is well recognized, most
especially in the postpaid segment of the telecommunication industry in the Philippines. It
can be seen by the brand having the largest postpaid market share in the industry.
STRENGTH 2: Large Postpaid Market Share (Company Sales Analysis)
Company Rating: 3
Globe Telecoms got a rating of 3 for this factor as its postpaid brand has the biggest
market share in the postpaid segment. The company has around 2,262,257 postpaid
subscribers in 2014 while the Smart postpaid brand has around 1,040,221 and finally the
Sun Cellular brand has around 1,725,227 subscribers.
STRENGTH 3: Complete Product & Service Portfolio Under One Brand and Company
(Company Sales Analysis, Company Introduction)
Company Rating: 4
Globe Telecoms got a rating of 4 for this factor as the company has all its product
and services under one brand. Not unlike its key competitor that has a 2 separate company
for mobile and another for the fixed line segment.114
STRENGTH 4: Modern Products & Services (7s Mckinsey)
Company Rating: 3
Globe Telecoms got a high rating of 3 for this factor as the company has one of the
most technologically advanced networks in the Philippines. Also, the company currently
embarking on a network modernization program and they are also the first
114
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telecommunication company that has a full 3G capability and has the largest LTE network in
the country.115
4) WEAKNESSES AND COMPANY RATINGS
WEAKNESS 1: Smaller Network Infrastructure Compared to Key Competitor (CPM)
Company Rating: 2
Globe Telecoms got a rating of 2 for this factor as the company has a smaller
network infrastructure compared to its main competitor which might hinder the company to
provide a better service to its customers.116
WEAKNESS 2: Smaller Resources Compared to Key Competitor (Key Financial Ratios)
Company Rating: 2
Globe Telecoms got a rating of 2 for this factor as the company has smaller total
assets that it can utilize compared to its key competitor. The company’s total assets in 2014
amounted to just Php179,506,952,000, while its key competitor’s total assets amounted to
Php436,295,000,000.
WEAKNESS 3: Poor Customer Satisfaction due to Corporate Hierarchy and lack of

Customer Service Skills of Employees (7s Mckinsey)
Company Rating: 2
Globe Telecoms got a rating of 2 for this factor because the current training programs
of the company is focus more on leadership and management. There should be more focus
on providing better customer satisfaction to its customers. Also, the company’s corporate
hierarchy does not give top management a clear visibility of what really is happening on the
ground which tends to slow down the resolution of customer issues which subsequently
decreases customer satisfaction. This is critical especially now that the quality of the
products and services they provide are being compared to other ASEAN countries which are
way better that theirs.
115
116
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WEAKNESS 4: Poor Network Reliability (CPM)
Company Rating: 2
Globe Telecoms got a rating of 2 for this factor because downtimes and service
interruptions are common for the company’s products and services as seen by the low
customer satisfaction they are getting. Also, its internet speed is below the ASEAN regions
average.117
WEAKNESS 5: High Level of Debt (Key Financial Ratio Analysis)
Company Rating: 2
Globe Telecoms got a rating of 2 for this factor due to the fact that the company has
a higher level of long-term debt compared to its key competitor. The company’s long-term-
debt-to- equity ratio in 2014 stands at 1.08, while its key competitor’s long-term-debt-to-
equity ratio is at 0.85.
WEAKNESS 6: Current Limited Number of Key Suppliers (7s Mckinsey)
Company Rating: 2
Globe Telecoms got a rating of 2 for this factor as the company has a small number
of key suppliers, namely Huawei and Alcatel, which provides the bulk of the products and
services it needed to provide the needed services to its customers.
5) INTERNAL FACTOR EVALUATION (IFE) MATRIX
Firm's
Importance Weighted
Internal Factor Source Rating
Weight % Score
(1 to 4)
Strengths
Strategic
S1: Prestigious Brand Name 7% 3 0.21
Positioning / CPM
117
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Company Sales
S2: Large Postpaid Market Share 9% 3 0.27
Analysis
Company Sales
S3: Complete Product & Service Portfolio Under Analysis /
9% 4 0.36
One Brand and Company Company
Introduction
S4: Modern Products and Services 7s Mckinsey 11% 3 0.33
Total 36%
Weaknesses
W1: Smaller network infrastructure Compared to

CPM 9% 2 0.18
Key Competitor
W2: Smaller Resources Compared to Key Key Financial Ratio

11% 2 0.22
Competitor Analysis
W3: Poor Customer Satisfaction due to Corporate
Hierarchy and lack of Customer Service skills of 7s Mckinsey 13% 2 0.26
employees
W4: Poor Network Reliability CPM 13% 2 0.26
Key Financial Ratio

W5 High Level of Debt 11% 2 0.22
Analysis
W6: Current Limited Number of Key Suppliers 7s Mckinsey 7% 2 0.14

Total 64%
Grand Total 100% 2.45
6) CONCLUSION
Globe Telecoms got a 2.45 rating in IFE. This is in line with the company’s current
market position. Even though it has a satisfactory rating it is still one of the top players in the
telecommunication industry in the Philippines due to other external factors especially the
difficulty of entering the said industry.
Key to the company’s future success is creating a culture wherein customer

satisfaction is the central strategy but sadly this is where Globe Telecoms, and even other
players, lacks in. They already have one of the most modern network in the country and has
a wide array of products and service it can offer to its customers, what they lacks is service
stability and addressing key customer concerns.
Another key thing for Globe Telecoms to closely monitor is its current financial
position. The company should be able to manage its debts and liabilities properly. As this
140 | P a g e
might be a critical factor in its capacity to take advantage of future growth opportunities in the
telecommunication industry in the Philippines.
Overall, Globe Telecoms can greatly improve its market position if only the company
will listen more to its customers.
X. STRATEGY FORMULATION
1) STRENGTHS, WEAKNESSES, OPPORTUNITIES, THREATS (SWOT) MATRIX
STRENGTH OPPORTUNITY STRATEGIES
STRENGTHS OPPORTUNITIES
S1: Prestigious Brand Name O1: Growth of the country's BPO and business
S2: Large Postpaid Market Share sector due to GDP growth
S3: Complete Product & Service Portfolio Under O2: Current finance environment suitable for
One Brand and Company investments
S4: Modern Products and Services O3: E-commerce Growth
O4: Duopoly with no substitute industry
O5: Strong Growth in the upper income
segment
O6: Growth on demand and development of
new technologies in broadband
 SO1: Globe can create flexible product mix that can fit the different needs of growing
businesses. (S1, S3, S4, O1, O3, O5 and O6)
 SO2: Globe can leverage more its brand to get the best loan terms to lenders to be
able to invest on key growth areas of the industry. (S1, S2, O2 and O4)
 SO3: Globe can offer more shares to the public via PSE to fund its investments on
better quality of segments with future strong growth potential. (S1, S2, O2 and O4)
 SO4: Globe can invest more on better service quality and customer retention
programs to attract more customers from the strong upper income segment growth.
(S1, S2, S3, S4, O2, O5)
 SO5: Globe can tap banks and other financial market and use its brand reputation to
get good rates to refinance its loans and improve the company’s financial position.
(S1, S2, O2 and O4)
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 SO6: Globe can create new product mix that specifically targets the upper income
segment of the industry. (S1, S2, O2 and O4)
 S07: Globe can invest on marketing and promos to get more share of the high
growing upper income segment (S1, S2, S3, S4, O2, O4 and O6).
 SO8: Globe can invest on developing new broadband products to get more market
share of the growing broadband segment (S1, S2, S3, S4, O2, O4 and O6).
STRENGTH THREAT STRATEGIES
STRENGTHS THREATS
S1: Prestigious Brand Name T1: Calamity related risks

S2: Large Postpaid Market Share T2: Growth of cheap voice and data messaging
S3: Complete Product & Service Portfolio Apps
Under One Brand and Company T3: Ongoing senate inquiry and legal
S4: Modern Products and Services proceedings against the industry
T4: Saturation of major product revenues
streams
T5: Decline in the prepaid segment
 ST1: Globe can shift its marketing and investment focus more from mobile voice and
SMS to mobile and broadband internet. (S1, S2, S3, S4, T2, T3 and T4)
 ST2: Globe can put better programs for subscriber retentions for its postpaid
subscribers to minimize the impact of the declining prepaid segment to its bottom-
line.(S1, S2, T4 and T5)
 ST3: Globe can take advantage of its modern and complete product portfolio to
interoperate and create back-up technologies once calamities hit and therefore
minimize the impact to its costs. Eg: using the mobile network to be a back-up for
fixed-line or broadband if the latter goes down and vice versa. (S3, S4 and T1)
 ST4: Globe must not look at the ongoing senate inquiry as a threat but as a medium
in which the company can voice out and expose its concerns to lawmakers about
various red tapes and bureaucracy in the local and national government that hinders
the company to provide better services to its customers. (S1 and T3)
 ST5: Globe can put better promos for its postpaid subscribers to minimize the impact
of the declining prepaid segment to its bottom-line.(S1, S2, T4 and T5).
 ST6: Globe can invest more on developing over-the-top (OTT) technologies to be
able to enter the mobile apps and digital market industry (S1, S2, S3, S4, T2 and T4)
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WEAKNESS OPPORTUNITY STRATEGIES
WEAKNESSES OPPORTUNITIES
W1: Smaller network infrastructure Compared O1: Growth of the country's BPO and business
to Key Competitor sector due to GDP growth
W2: Smaller Resources Compared to Key O2: Current finance environment suitable for
Competitor investments
W3: Poor Customer Satisfaction due to lack of O3: E-commerce Growth
customer service skills of employees O4: Duopoly with no substitute industry
W4: Poor Network Reliability O5: Strong Growth in the upper income segment
W5: High Level of Debt O6: Growth on demand and development of new
W6: Current Limited Number of Key Suppliers technologies in broadband
 WO1: Globe can retain more revenues from the strong postpaid segment, wherein
they are the leading player, and other strong growth areas and put the said revenues
to be invested to develop its network infrastructure. (W1, W2, W5, O1, O3, O4, O5
and O6)
 WO2: Globe can get strategic partners that have good resources to in invest in the
company to strengthen Globe’s resources to be able to invest more to improve its
network infrastructure, network reliability and subsequently customer satisfaction.
(W1, W2, W3, W4, W5, O2 and O4)
 WO3: Globe can tap the country’s financial markets to refinance its high interest
bearing loans and obligations given the country’s current good investment
environment to improve the company’s financial position. (W2, W5 and O2)
 WO4: Globe can tap the country’s financial markets to get resources to improve its
network reliability. (W1, W2, W3, W4, O1, O2, O3, O4, O5 and O6)
 WO5: Globe can also utilize other suppliers of its products and services instead of
the current focused number of suppliers to minimize the company’s risk of over-
reliance to a small number of suppliers. (W6, O2 and O4)
 WO6: Globe can tap the country’s financial markets to get resources to invest in
segment of the industry with strong future growth potentials. (W1, W2, W3, W4, O1,
O2, O3, O4, O5 and O6)
 WO7: Globe can tap the country’s financial markets to get resources to hire people
and train its employees to have better customer service skills and to be customer
centric. (W1, W2, W3, W4, O1, O2, O3, O4, O5 and O6)
WEAKNESS THREAT STRATEGIES
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WEAKNESSES THREATS
W1: Smaller network infrastructure Compared to T1: Calamity related risks

Key Competitor T2: Growth of cheap voice and data messaging
W2: Smaller Resources Compared to Key Apps
Competitor T3: Ongoing senate inquiry and legal proceedings
W3: Poor Customer Satisfaction due to lack of against the industry
customer service skills of employees T4: Saturation of major product revenues streams
W4: Poor Network Reliability T5: Decline in the prepaid segment
W5: High Level of Debt
W6: Current Limited Number of Key Suppliers
 WT1: Globe can partner with smaller industry players to have them as backup if
calamities brings Globes network down. (W1, W2, W3, W4, W5 and T1)
 WT2: Globe can effectively allocate more resources to key growth areas, cut on
unnecessary costs and make its cash flow more efficient to minimize the impact on
profits of substitute cheap voice and data Apps and saturation of major revenue
streams. (W2, W5, T2, T4 and T5)
 WT3: Globe can improve customer support and marketing by in-house trainings,
managerial focus and support to make the business more efficient and increase
customer satisfaction and at the same time on cost. (W2, W3, T2, T4 and T5)
 WT4: Globe can utilize the current senate hearings as a medium to expose to the
lawmakers unnecessary costs incurred by the company due to redtapes and
bureaucracy. (W2, W3, W4, W5, T3, T4 and T5)
 WT5: Globe can also include contingencies in its budget if current cases filed to the
company might materialize and add to the company’s expenses. (W2, W5, T3, T4
and T5)
 WT6: Globe can get more suppliers that can offer better rates to minimize its
dependence to a limited number of suppliers. (W2, W5, W6, T2, T4 and T5)
GROUPING OF SWOT STRATEGIES
Market Penetration Strategies
SO1: Globe can create flexible product mix that can fit the different needs of growing
businesses. (S1, S3, S4, O1, O3, O5 and O6)
SO2: Globe can leverage more its brand to get the best loan terms to lenders to be able to
invest on key growth areas of the industry. (S1, S2, O2 and O4)
SO3: Globe can offer more shares to the public via PSE to fund its investments on better
quality of segments with future strong growth potential. (S1, S2, O2 and O4)
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SO4: Globe can invest more on better service quality and customer retention programs to
attract more customers from the strong upper income segment growth. (S1, S2, S3, S4, O2,
O5)
SO6: Globe can create new product mix that specifically targets the upper income segment
of the industry. (S1, S2, O2 and O4)
S07: Globe can invest on marketing and promos to get more share of the high growing
upper income segment (S1, S2, S3, S4, O2, O4 and O6).
ST1: Globe can shift its marketing and investment focus more from mobile voice and SMS to
mobile and broadband internet. (S1, S2, S3, S4, T2, T3 and T4)
ST2: Globe can put better programs for subscriber retentions for its postpaid subscribers to
minimize the impact of the declining prepaid segment to its bottom-line.(S1, S2, T4 and T5)
ST5: Globe can put better promos for its postpaid subscribers to minimize the impact of the
declining prepaid segment to its bottom-line.(S1, S2, T4 and T5).
WO6: Globe can tap the country’s financial markets to get resources to invest in segment of
the industry with strong future growth potentials. (W1, W2, W3, W4, O1, O2, O3, O4, O5 and
O6)
WO7: Globe can tap the country’s financial markets to get resources to hire people and train
its employees to have better customer service skills and to be customer centric. (W1, W2,
W3, W4, O1, O2, O3, O4, O5 and O6)
WT3: Globe can improve customer support and marketing by in-house trainings, managerial
focus and support to make the business more efficient and increase customer satisfaction
and at the same time on cost. (W2, W3, T2, T4 and T5)
Product Development Strategies
SO8: Globe can invest on developing new broadband products to get more market share of
the growing broadband segment (S1, S2, S3, S4, O2, O4 and O6).
ST3: Globe can take advantage of its modern and complete product portfolio to interoperate
and create back-up technologies once calamities hit and therefore minimize the impact to its
costs. Eg: using the mobile network to be a back-up for fixed-line or broadband if the latter
goes down and vice versa. (S3, S4 and T1)
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WO1: Globe can retain more revenues from the strong postpaid segment, wherein they are
the leading player, and other strong growth areas and put the said revenues to be invested
to develop its network infrastructure. (W1, W2, W5, O1, O3, O4, O5 and O6)
WO2: Globe can get strategic partners that have good resources to in invest in the company
to strengthen Globe’s resources to be able to invest more to improve its network
infrastructure, network reliability and subsequently customer satisfaction. (W1, W2, W3, W4,
W5, O2 and O4)
WO4: Globe can tap the country’s financial markets to get resources to improve its network
reliability. (W1, W2, W3, W4, O1, O2, O3, O4, O5 and O6)
ST6: Globe can invest more on developing over-the-top (OTT) technologies to be able to
enter the mobile apps and digital market industry (S1, S2, S3, S4, T2 and T4)
Cost Management Strategies
SO5: Globe can tap banks and other financial market and use its brand reputation to get
good rates to refinance its loans and improve the company’s financial position. (S1, S2, O2
and O4)
ST4: Globe must not look at the ongoing senate inquiry as a threat but as a medium in which
the company can voice out and expose its concerns to lawmakers about various red tapes
and bureaucracy in the local and national government that hinders the company to provide
better services to its customers. (S1 and T3)
WO3: Globe can tap the country’s financial markets to refinance its high interest bearing
loans and obligations given the country’s current good investment environment to improve
the company’s financial position. (W2, W5 and O2)
WT2: Globe can effectively allocate more resources to key growth areas, cut on
unnecessary costs and make its cash flow more efficient to minimize the impact on profits of
substitute cheap voice and data Apps and saturation of major revenue streams. (W2, W5,
T2, T4 and T5)
WT4: Globe can utilize the current senate hearings as a medium to expose to the lawmakers
unnecessary costs incurred by the company due to redtapes and bureaucracy. (W2, W3,
W4, W5, T3, T4 and T5)
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WT5: Globe can also include contingencies in its budget if current cases filed to the
company might materialize and add to the company’s expenses. (W2, W5, T3, T4 and T5)
Horizontal Integration Strategies
WO5: Globe can also utilize other suppliers of its products and services instead of the
current focused number of suppliers to minimize the company’s risk of over-reliance to a
small number of suppliers. (W6, O2 and O4)
WT1: Globe can partner with smaller industry players to have them as backup if calamities
brings Globes network down. (W1, W2, W3, W4, W5 and T1)
WT6: Globe can get more suppliers that can offer better rates to minimize its dependence to
a limited number of suppliers. (W2, W5, W6, T2, T4 and T5)
2) STRATEGIC POSITIONING AND ACTION EVALUATION (SPACE) MATRIX
FINANCIAL STRENGTH (FS) RATINGS
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Smaller Resources Compared to Key Competitor 4
High Level of Debt 3
Efficient asset utilization compared to key competitor 5
High level of recievables 3
Total 15
Average 3.75
INDUSTRY STRENGTH (IS)
E-commerce Growth 6
Strong Growth in the upper income segment 6
Growth on demand and development of new technologies in broadband 4
Duopoly with no substitute industry 6
Growth of cheap voice and data messaging Apps 3
Saturation of major product revenues streams 3
Decline in the prepaid segment 3
Total 31
Average 4.43
ENVIRONMENTAL STABILITY (ES)
Growth of the country's BPO and business sector due to GDP growth -2
Current finance environment suitable for investments -1
Calamity related risks -3
Ongoing senate inquiry and legal proceedings against the industry -3
Total -9
Average -2.25
COMPETITIVE ADVANTAGE (CA)
Prestigious Brand Name -2
Large Postpaid Market Share -1
Complete Product & Service Portfolio Under One Brand and Company -3
Modern Products and Services -2
Smaller network infrastructure Compared to Key Competitor -3
Poor Customer Satisfaction due to Corporate Hierarchy and lack of
customer service skills of employees -5
Poor Network Reliability -5
Current Limited Number of Key Suppliers -3
Total -24
Average -3.00
CONCLUSION
X - Axis (CA average + IS average) 1.43
Y- Axis (ES average + FS average) 1.5
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As seen on the results of the SPACE matrix, Globe Telecoms is on the Aggressive
quadrant. This shows that the company is in a good position to use its internal strengths to
overcome its internal weakness, avoid external threats and most important of all, take
advantage of external opportunities in the telecommunication industry in the Philippines.
Also, some recommended strategies are Market Penetration, Market Development, Product
Development, Integration and Diversification.118
3) BOSTON CONSULTING GROUP (BCG) MATRIX
Brand
Brand Leader Relative Market
Brand Sales %
Name Market Market Market Growth
Value Profit
Share Share Share Rate
Share
Mobile Voice 0.39 0.61 0.64 6% 32,367,000,000 40%
SMS 0.38 0.62 0.61 1% 28,794,000,000 36%
Mobile Data 0.45 0.55 0.82 26% 11,603,000,000 14%
Fixed-line Voice 0.06 0.90 0.07 6% 2,605,000,000 6%
Fixed-line Data 0.22 0.58 0.38 3% 4,691,000,000 -7%
Broadband 0.51 0.51 1.00 24% 10,440,000,000 11%
As can be seen on the results of the BCG matrix, Globe Telecoms must minimize its
exposure to its fixed-line voice and fixed-line data segments as these products and services
118
Strategic Management Concepts and Cases 13th Edition, David, Fred
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is in the dog quadrant and does not offer any good potential for future growth and revenues
for the company. These products even add to the cost of doing business for the company.
Also, the company must be vigilant on its exposure to mobile voice and SMS
segment of the industry even though those products are still profitable, as they are in the
cash cow quadrant and slowly moving to the dog quadrant. What the company can do is to
allocate the profits it can earn from the said products to be invested in products with strong
potentials for future growths like Mobile Data and Broadband.
Finally, Globe Telecoms must allocate resources its current from high revenue but
declining products and/or get funds from outside sources to be invested in broadband and
mobile data segment of the company as these segments shows strong growth potentials in
the future as can be seen in the BCG matrix that those products are in the star quadrant.
4) GE MCKINSEY MATRIX
INDUSTRY ATTRACTIVENESS
Mobile Mobile Fixed-line Fixed-line

SMS Broadband
Voice Data Voice Data
Importa
Rating
Rating
Rating
Rating
Rating
Factor nce Weight Weight Weight Weight Weight Rating Weight

Weight ed ed ed ed ed ed
Score Score Score Score Score Score
Industry
15% 2 0.3 2 0.3 3 0.45 1 0.15 2 0.3 4 0.6
Growth
Industry
20% 4 0.8 4 0.8 4 0.8 1 0.2 2 0.4 3 0.6
Size
Competit
ion 15% 4 0.6 4 0.6 4 0.6 3 0.45 3 0.45 3 0.45
Intensity
Industry
Profitabil 20% 4 0.8 4 0.8 3 0.6 1 0.2 2 0.4 3 0.6
ity
Ease of
Entry / 30% 4 1.2 4 1.2 4 1.2 4 1.2 4 1.2 4 1.2
Exit
Total
100% 3.70 3.70 3.65 2.20 2.75 3.45
Score
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BUSINESS UNIT STRENGTH
Mobile Mobile Fixed-line Fixed-line

SMS Broadband
Voice Data Voice Data
Importa
Factor nce
Rating
Rating
Rating
Rating
Rating
Rating
Weigh Weigh Weigh Weigh Weigh Weigh
Weight ted ted ted ted ted ted
Score Score Score Score Score Score
Superior
Customer
25% 3 0.75 4 1 2 0.5 3 0.75 2 0.5 2 0.5
Satisfactio
n
Reliable
Products
25% 3 0.75 4 1 2 0.5 3 0.75 2 0.5 2 0.5
and
Services
Competitiv
15% 3 0.45 4 0.6 2 0.3 3 0.45 3 0.45 2 0.3
e Promos
Technologi
cally
Advance
20% 4 0.8 3 0.6 4 0.8 2 0.4 2 0.4 4 0.8
and
Innovative
Products
Large
Customer 15% 4 0.6 3 0.45 4 0.6 2 0.3 2 0.3 3 0.45
Base
Total
100% 3.35 3.65 2.70 2.65 2.15 2.55
Score
DATA TABLE
Brand Others Business

Industry
Name Market Market Unit
Attractiveness
Share Share Strength
Mobile Voice 3.35 3.70

0.39 0.61
SMS 3.65 3.70
0.38 0.62
Mobile Data 2.70 3.65
0.45 0.55
Fixed-line Voice 2.65 2.20
0.06 0.90
Fixed-line Data 2.15 2.75
0.22 0.58
Broadband 2.55 3.45
0.51 0.51
GEM CHART
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Based on the GE Mckinsey Matrix, both Fixed-line Voice and Fixed-line Data are in
the hold quadrant but the said products contribute only a small part of Globe’s total
revenues. On the other hand, the SMS and Mobile Voice the biggest contributor to Globe’s
total revenues. Both of which are in the grow quadrant. Also, the Mobile Data and
Broadband products are on the grow quadrant.
In the coming years, both Fixed-line Voice and Fixed line data should be on the
liquidate quadrant as this products offer little future revenue and growth potential for the
company. While the SMS and Mobile Voice are expected to be at the hold quadrant in the
future as this products are already on its saturation phases. But on the other hand, Mobile
Data and Broadband will still be on the grow quadrant as this products have strong future
growth potentials.
In order to further grow and meet desired goals, more investment should be made on
the Mobile Data and Broadband Segment of Globe Telecoms. A good strategy is to allocate
the profits generated from the Mobile Voice and SMS segments of the company to be
invested on the Mobile data and Broadband segments of the company. Also, less exposure
should be made on the fixed-line voice and fixed-line data segment of the company.
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Based on the given results of the GEM chart, the recommended strategies that the
company can implement are Backward, Forward and Horizontal Integration, Market
Penetration, Market Development and Product Development.
5) GRAND STRATEGY MATRIX
Future Market Growth: Slow
The telecommunication industry in the Philippines is slowing down. This can be seen
by the slow CAGR of 3.86% the whole industry registered in the last 5-yrs compared to the
Philippine GDP growth of 6.1% in 2014. The industry is also is expected to just register a
CAGR of 1.34% in the next 3 years compared to the forecasted GDP growth of the country
of 6% - 7% until 2018.
Competitive Position: Strong
Globe Telecoms has a strong competitive position in the telecommunication industry

in the Philippines as it its one of the key players in the country’s duopolistic
telecommunication industry. It is also the second when it comes to market share and
subscribers, and is the leading player in the postpaid segment of the industry.
Also, the difficulty of entering the telecommunication industry due various factors like
government licenses and fees needed, high capital requirements and highly technical skills
needed prevents new competitors from entering the market.
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Globe Telecoms is situated in quadrant IV wherein there is slow market growth in the
industry while the company is in a strong competitive position. The recommended strategies
to be implemented are Concentric Diversification, Horizontal Diversification, Conglomerate
Diversification and Joint Ventures.
6) IE MATRIX
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Based on the IE Matrix results, Globe Telecoms is in the 5th quadrant wherein the
recommended strategy is a “hold and maintain” position. The recommended strategies for
this quadrant are Market Penetration and Product Development.
7) SUMMARY OF STATEGIES
STRATEGY OPTIONS SWOT SPACE IE GE GRAND BCG TOTAL

Forward Integration x x x 3
Backward Integration x x x 3
Horizontal Integration x x x x x 5
Market Penetration x x x x x 5
Market Development x x x 3
Product Development x x x x x 5
Concentric Diversification x x x 3
Conglomerate Diversification x x x 3
Joint Venture x 1
Retrenchment / Cost Improvement x x 2
Divestiture x 1
Liquidation 0
Based on the result of the summary of strategies above, the best strategy that Globe
Telecoms can consider should come from Horizontal Integration, Market Penetration and/or
Product Development as those strategy options got the highest total score of all the strategy
options on the table.
8) QUANTITATIVE STRATEGIC PLANNING MATRIX (QSPM)
Market Product Horizontal

KEY FACTORS Penetration Development Integration
WEIGHT AS TAS AS TAS AS TAS
Opportunities
Growth of the country's BPO and MSME
sector due to GDP growth 10% 4 0.4 4 0.4 4 0.4
Current finance environment suitable for
investments 12% 4 0.48 4 0.48 4 0.48
E-commerce Growth 10% 4 0.4 4 0.4 3 0.3
Duopoly with no substitute industry 8% 4 0.32 4 0.32 2 0.16
Strong Growth in the upper income segment 10% 4 0.4 4 0.4 3 0.3
Growth on demand and development of new
technologies in broadband 8% 4 0.32 4 0.32 3 0.24
Threats
Calamity related risks 6% 3 0.18 3 0.18 3 0.18
Growth of cheap voice and data messaging 10% 3 0.3 3 0.3 3 0.3
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Apps
Ongoing senate inquiry and legal proceedings
against the industry 6% 2 0.12 2 0.12 3 0.18
Saturation of major product revenues streams 10% 3 0.3 3 0.3 3 0.3
Decline in the prepaid segment 10% 3 0.3 3 0.3 3 0.3
Total Weight 100%
Strengths
Prestigious Brand Name 7% 4 0.28 4 0.28 3 0.21
Large Postpaid Market Share 9% 4 0.36 4 0.36 3 0.27
Complete Product & Service Portfolio Under
One Brand and Company 9% 4 0.36 3 0.27 2 0.18
Modern Products and Services 11% 4 0.44 3 0.33 2 0.22
Weaknesses
Smaller network infrastructure Compared to
Key Competitor 9% 3 0.27 4 0.36 4 0.36
Smaller Resources Compared to Key
Competitor 11% 3 0.33 2 0.22 3 0.33
Poor Customer Satisfaction due to high
corporate hierarchy and lack of customer
service skills of employees 13% 4 0.52 4 0.52 3 0.39
Poor Network Reliability 13% 3 0.39 4 0.52 4 0.52
High Level of Debt 11% 3 0.33 2 0.22 3 0.33
Current Limited Number of Key Suppliers 7% 2 0.14 3 0.21 3 0.21
Total Weight 100%
Sum Total Attractiveness Score 6.94 6.81 6.16
Based on the QSPM results above, the best strategy option that Globe Telecoms can
use is Market Penetration, which got a total attractiveness score of 6.94, followed by Product
Development, which got a score of 6.81 and finally Horizontal Integration, which got a score
of 6.16.
XI. CORPORATE OBJECTIVES, STRATEGIES, RECOMMENDATION AND ACTION
PLAN
1) RECOMMENDED COMPANY VISION STATEMENT
“To be the best and most-trusted telecommunications company that the nation
ever had by enhancing all its stakeholder’s lives by providing them the things that will
make them happy through technology in the span of 5 years together with the
country’s progress.”
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Parameter Yes / No Why
Does it clearly answer Globe Telecom’s new Vision statement now clearly states
the question: What do that the company wants to be the best and most-trusted
we want to become? telecommunications company by being a vehicle that
YES
enhances all its stakeholders lives and make them happy
through its core competency which is technology
Is it concise enough yet Globe Telecom’s new Vision statement now clearly states
inspirational? what kind of medium it will use to be the best and most-
YES
trusted brand that enhances people’s life which is
technology.
Is it aspirational? Globe Telecom’s new Vision statement now states that it
wants to enhance all its stakeholder's lives in parallel will
YES
the improving business environment of the country.
Does it give clear Globe Telecom’s new Vision statement now has a
indication as to when it YES timeframe which is 5 years which is also in parallel with the
should be attained? current high growth rate of the country.
2) RECOMMENDED COMPANY MISSION STATEMENT
“We will make our nation wonderful by providing to our customers advance
and reliable telecommunication technologies that can enhance their everyday lives
and at the same time create a culture of integrity, adaptability, and performance based
merit system like how a good employer should and care for the business just like how
an owner would.”
Parameter Yes / No If yes, which part of the statement
1. Customers YES The nation
2. Products & services YES Advance and reliable telecommunication technologies
3. Markets YES Telecommunication industry
4. Technology YES Advanced telecommunication technologies
5. Concern for survival, Care for the business like an owner would
YES
growth, profitability
6. Philosophy Culture of integrity, adaptability and performance based
YES
merit system.
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7. Self-concept Provider of advance telecommunication technologies
Culture of integrity
YES
Culture of adaptability
Culture of thinking like an owner
8. Concern for employees YES Performance based merit
9. Concern for nation Making the nation wonderful by providing advance

YES
building telecommunication technologies
3) RECOMMENDED STRATEGIC OBJECTIVES
Base on the results of the analysis done regarding the company and the
telecommunication industry, Globe Telecoms should focus on improving its customer
satisfaction and quality of the products and services it provides to its customers in order to
gain more subscribers and market share and subsequently, gain market leadership in areas
that offer strong growth potentials in the future.
Corporate Strategic Objectives: To gain market leadership in key areas of the

telecommunication industry that offer strong growth potentials in the future. This will
subsequently translate to a CAGR of 13% in sales revenues or Php156 billion in
annual sales revenues by 2018.
In order to reach total annual sales revenue of Php156 billion by 2018, Globe
Telecoms must be able to gain market leadership in areas of the telecommunication industry
in the Philippines that has strong future growth potentials. The areas of focus identified are
mobile data, broadband and the postpaid segments of the industry. This should be done
while not neglecting the current major revenue drivers of the company namely its mobile
voice and SMS segments.
Functional Strategic Objectives (Financial): To maintain or surpass the current CAGR in

Sales Revenue of 12.17%. This translates to 111Billion in 2015, 124Billion in 2016, 139
Billion in 2017 and 156Billion in 2018.
Globe Telecoms must be able to sustain and even surpass its current strong growth,
even if the current major sources of revenues in the telecommunication industry in the
Philippines are already in its saturation phase. In order to do this, the company should be
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able to gain a leadership in the key areas that offer strong growth potentials in the future
namely the mobile data, broadband and the postpaid segments of the industry. They may
also follow the best practices the other top telecommunication players in other ASEAN
countries, especially Singapore, to gain leadership in key growth areas of the industry.
Functional Strategic Objectives (Marketing): To get a total industry market share of

40.61% in 2015, 44.77% in 2016, 50% in 2017 and 54.79% in 2018. This can be done by
getting more high revenue subscribers in the postpaid segments and also getting the market
leadership, in terms of subscribers, in the mobile data and broadband segment of the
industry. The target is to get a 25% growth in number of postpaid subscribers and a 20%
growth in total subscribers by 2018 while lowering the postpaid and prepaid churn rate to
below 1% and 2% respectively.
In to gain market leadership in key strong areas by 2018, Globe Telecoms must be
able to attract more subscribers, especially high-income subscribers, in the future strong
growth segments of the industry namely mobile data, broadband and the postpaid segment,
and at the same time retain and get more subscribers to switch from the current high income
generating segments. They may also follow the best practices the other top
telecommunication players in other ASEAN countries, especially Singapore, to improve
customer satisfaction which will lower the company’s churn rate and also attract more
subscribers especially in key growth areas of the industry.
Functional Strategic Objectives (People): Globe Telecoms must improve on its customer
satisfaction and technical expertise in dealing with network reliability issues by having more
customer service and technical training to all its employees, hire new employees with good
customer service expertise, lower its corporate hierarchy by at least 1 level for better upper
management visibility, creating a clear escalation procedures and complaint prioritization
and easy and user-friendly survey and feedback forms and procedures that is regularly
reviewed by top management and tied to each employee’s KPI.
In order to attract more customers, especially the high income subscribers, Globe
Telecoms must improve its customer satisfaction by a mixture of better customer service and
reliable network. This can be achieve by better technical and customer service quality of its
staff and better upper management visibility of what is happening on the ground to make
decision making faster and more efficient.
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Also, a clear escalation, complaint prioritization, and an easy and user-friendly survey
and feedback forms and procedures that is regularly reviewed by top management and tied
to each employee’s KPI should be created to be able to regularly track the actual concerns
of the customers, most especially high-income customers from the postpaid segment. They
may also hire consultants from Singtel that can train the company’s employees about their
best practices in their company.
4) RECOMMENDED STRATEGIES
Strategy #1: Market Penetration: Globe can tap the country’s financial markets to get
resources to invest in segment of the industry with strong future growth potentials.
Globe Telecoms can tap the current good financial environment to invest on
improvement of the key areas of its business where there is a good potential for growth in
the future. This will not only minimize the impact of declining revenues from its current key
segments but also can be a good source of future revenues for the company. The key is not
to focus anymore on expensive cellsites, tower and facility construction but on equipments in
the core network infrastructure that adds speeds, capacity and redundancies to the
company’s existing cellsites. Equipments like additional fiber optics and transmission
equipments that are cheaper to implement, adds more capacity and redundancies, and will
be placed on existing company facilities to save cost, will greatly improve quality and at the
same time save on expense for the company. Below are the specific steps that can be done.
 Globe Telecoms will form a team. The members will consist of consultants
from the academe, leaders of consumer groups, high-income customers and
government. They will be accompanied by key employees and top
management from various groups within Globe Telecoms.
 .The main goal of the team is to 1)Identify the key concerns of its customers,
2)key locations of the key customers, 3)key locations that badly need
improvements and finally 4)actual improvement to be made.
 Once the locations are identified, additional core network and transmission
equipments on the said locations should be doubled.
 Target is to double the existing transmission speed, capacity and additional
redundancies for each of the key locations.
 The target is to have 5 key locations to be improved every month starting
2016.
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 If the capacity is not enough, the same procedure can be applied again the
next month until enough capacity is available.
 Target is to have a 20% increase in usage for each location which will
subsequently lead to a 20% increase in revenues for each key locations.
 Also, if there should be an increase of more than 50% in usage on a specific
key location, the said location will be upgraded again.
Strategy #2: Market Penetration: Globe can invest more on better service quality and
customer retention programs to attract more of the strong upper income segment growth.
By doing this strategy, Globe Telecoms will not only improve the company’s
customer satisfaction, it will also get more subscribers for the company. The following are
the identified key issues that the company had with regards to customer service.
 Too much hierarchy that leads to slow decision making and coordination with
each group.
 Due to this slow decision making and coordination, customer issues tend to
get stuck at the customer service department.
 No clear escalation procedures in place
 No clear ticket prioritization in place
 No clear time and SLA for each customer issues
 Survey and feedback forms from the customer tends to be not taken seriously
 Customer satisfaction has a light bearing in each employees KPI
Below are some of the recommendations to improve the customer satisfaction for the
Globe Telecom’s customers.
 Globe Telecoms will form a team. The members will consist of consultants
from the academe, leaders of consumer groups, high-income customers and
government. They will be accompanied by key employees and top
management from Globe Telecoms.
 .The main goal of the team is to 1)Identify the key concerns of its customers,
2)key locations of the key customers, 3)key locations that badly need
improvements and finally 4)actual improvement to be made.
 Once identified, Globe Telecoms will address the main concerns of its
customers
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 Then, to ensure customer issues will be addressed more efficiently in the
future, Globe Telecoms will impose clear escalation procedures and issue
prioritization to all customer complaints and their respective SLA and time of
restoration. Below are the recommendations.
Max Time of each Time can that be

Prioritization Description restoration updates on escalated to next
time issue level
Priority 1 Network wide outages 4 hrs every 30 mins every 1 hr
Priority 2 Service completely down 8 hrs every 1 hr every 2 hrs
Priority 3 Service up but with issues 12 hrs every 2 hr every 3hrs
Customer change
Priority 4 24 hrs 24 hrs every 24 hrs
requests
 For every escalation level, the customer will be able to directly speak to top
management which will enable the restoration of the said customer issue
faster and coordination with other groups easier. Below are the recommended
escalation points of contact.
Escalation
Point of contact
level
1 Supervisor
2 Manager
3 Group Manager
4 Director
 Once the last escalation level is reached and the customer issue is not yet
resolved, the customer will be provided and alternative action procedure or
will be entitled to a full reimbursement.
 The said escalation procedures, SLA and ticket prioritization is patterned to
the best practices being followed worldwide which is the IT Infrastructure
Library (ITIL). The said best practices are also being used by top
telecommunication companies not just in the ASEAN region but also
worldwide.
 Surveys and feedback forms will be sent to the customer that had an issue.
 The forms will let them rate the customer service they received from the
specific company employee.
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 This rating will regularly be reviewed by top management
 This will also be a big part of each employee grade in his/her KPI.
 Also, a customer service group will be formed that is dedicated to postpaid

and high-income customers.
 This group will proactively monitor, escalate and give heads-up to top
management, on behalf of the customer, if issues occur.
 This will ensure good customer service quality to this segment.
 Marketing campaigns will include these new customer service improvements

when selling this products and services to its customer most specifically the
average speed, promise reliability and uptime and the clear reimbursement
and alternative action procedures if SLAs are breached.
 Quarterly and Annual survey form will also be sent to high-income customers
to review if they are satisfied with the products and services of the company.
 Target of these strategies is to gain a 20% increase in total subscriber and a

25% increase in total postpaid subscriber by 2018.
 Also, the target is to lower the total subscriber churn rate to 2% and total
postpaid churn rate to less than 1%.
resources to hire people and train its employees to have better customer service skills and to
be customer centric.
Customer satisfaction is one of the key areas of improvement for Globe Telecoms
and hiring and training the company’s employees with customer service skills will greatly
improve customer satisfaction and subsequently will increase the company’s subscriber
base and decrease the churn rate of the company. Below are few recommendations for the
company.
 Make a high customer service skill a as major factor in hiring new employees
 Hire industry experts on customer service into the company
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 Get individual consultants and companies to advise Globe Telecoms on how
to improve its internal business processes to be more focus on customer
satisfaction
 Consultants from top telecommunication companies in ASEAN, especially in
Singtel, and globally can also be hired to train employees with better technical
skills and the best practices being done globally.
 Conduct customer service trainings from internal and external sources.
 Empower management to be more involve in dealing with customer
complaints and issues.
5) RECOMMENDED DEPARTMENTAL PROGRAMS AND ACTIONS
resources to invest in segment of the industry with strong future growth potentials.
Department: Marketing Who When

Marketing will form a team to spearhead a study as to which areas or Chief Marketing 3rd quarter
segments should be prioritized in the investment. Officer 2015
Once target segment is finalized, marketing will work with Purchasing,
VP for 4th quarter
Network Operations and Finance to request for the needed
marketing 2015
equipments and budget for the said investment in the target segment.
Soft launch the improved services by free or trial access while the said
VP for 1st quarter
service are still being rolled-out by Network Operations so the
marketing 2017
customers will know the service already exist.
Once full-rollout is complete, Grand launch the said service VP for 1st quarter
improvement. marketing 2018
Department: Network Operations Who When

Network Operations will form a team to focus on service improvement Chief 4th quarter
and will recommend needed equipment and support for the said Operations 2015
improvement of the target segment assignment by Marketing. Officer
Finalize the team members, needed equipments and support. Chief End of 2015
Operations
Officer / VP of
Operations
Once the team and needed equipment and support is finalized, the Chief 1st quarter
new team will create the strategy of implementation and timelines and Operations 2016
will talk to designated teams needed for the said improvement. Officer / Leader
of the new team
Start of the actual implementation of strategy. New team 2nd quarter
2016 to 4th
quarter
2017
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Department: Finance Who When
Initially, Globe’s CFO needs to talk to Purchasing, Operations, Marketing and
VP for
Sales to see how much will it cost to rollout new and/or improved products 4rd quarter
finance
and services for the strong growth segments like mobile data and 2015
/ CFO
broadband.
Finalize the respected budgets for each assigned departments for the
rollouts in investments for the improvement of the services for the strong CFO End of 2015
growth segments.
Then, Globe’s CFO needs to spearhead talks with banks to see if they can
provide good rates on bank loans. Or they can issue corporate bonds with CFO /
1st quarter
lower returns to that given by the banks. If all this fails, they can tap the stock VP for
2016
market and issue additional shares to the public to finance the expansion finance
programs.
Issue the needed shares or finalize the needed loans from banks for 2nd quarter
CFO
issuance in 3rd quarter of 2016. 2016
Department: Purchasing Who When

Head of 1st quarter
Purchasing will get the final list of needed equipment
Purchasing 2016
Head of 1st quarter
Start of procurement of needed equipments
Purchasing 2016
Start of the actual implementation of strategy. Purchasing will be on Head of 2nd quarter
standby if further equipments will be needed by Network Operations Purchasing 2016
Strategy #2: Market Penetration: Globe can invest more on better service quality and
customer retention programs to attract more of the strong upper income segment growth.

Marketing will form a team to spearhead a study as to which areas or
Chief Marketing 3rd quarter
segments needs service improvement and offer strong potential growth in
Officer 2015
the future.
Chief Marketing
Network Operations and marketing will form a team to focus on service
Officer / Chief 4th Quarter
improvement and will recommend needed equipment and support for the
Operations 2015
said improvement of the target segment assignment by Marketing.
Officer
The created team will identify the areas of improvement and will
Head of the 1st quarter
recommend needed equipment, support and budget for the said
formed team 2016
improvement.
Implementation of the service improvement strategy created by the team
members. Members from marketing will closely monitor the impact on Head of the 3rd quarter
customer satisfaction and market share improvements and will also start formed team 2016
implementing programs for better customer satisfaction.
Department: Network Operations Who When

Network Operations and marketing will form a team to focus on
Chief Marketing
service improvement and will recommend needed equipment and 4th Quarter
Officer / Chief
support for the said improvement of the target segment assignment by 2015
Operations Officer
Marketing.
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Network Operations and marketing will form a team to focus on
Chief Marketing
service improvement and will recommend needed equipment and 4th Quarter
Officer / Chief
support for the said improvement of the target segment assignment by 2015
Operations Officer
Marketing.
The created team will identify the areas of improvement and will
Head of the 1st quarter
recommend needed equipment, support and budget for the said
formed team 2016
improvement.
Implementation of the service improvement strategy created by the
Head of the 3rd quarter
team members. Members from Network Operations group will
formed team 2016
spearhead the technical network improvements.

Finance will work together with the created team for the budget for the VP for Finance 1st quarter
team. 2016
Finance will source the needed fund internally, by bank loans, bonds VP for Finance / 2nd quarter
securities of mixture of all. CFO 2016
Issuance of financing instrument chosen. VP for Finance / End of 2nd
CFO quarter
resources to hire people and train its employees to have better customer service skills and to
be customer centric.
Department: Human Resource Who When

Human Resource, Marketing and Network Operations will create a
Head of Human 3rd quarter
team that will study the needed skills of their teams to improve
Resource 2015
customer satisfaction and Network Reliability.
Once needed skills are identified, Human Resource will source the
needed institutions, schools and educational companies to train Head of the 4th quarter
employees of the needed skills. Human Resource will also search for team 2015
applicants with the said skills.
Head of the End of 4th
Human Resource will send to Finance the needed budget for approval
team quarter 2015
2nd quarter
Head of the
Start of technical and customer satisfaction trainings 2016 – 4th
team
quarter 2016
Head of the 2nd quarter
Hiring of personnel with needed technical and customer service skills
team 2016

Human Resource, Marketing and Network Operations will create a team Head of
3rd quarter
that will study the needed skills of their teams to improve customer Human
2015
satisfaction and Network Reliability. Resource
2nd quarter
Head of the
Start of customer satisfaction trainings for marketing personnels 2016 – 4th
team
quarter 2016
Chief 4th quarter
Marketing will closely monitor the impact on customer satisfaction,
Marketing 2016 – 4th
Subscriber growth and Market Share.
Officer quarter 2017
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Finance will study the needed budget and will source the needed funds VP for 4th quarter
via internal cash, loans, bonds or issuance of securities. Finance 2015
Issuance of the needed financial instrument CFO / VP for 1st quarter
Finance 2016
Finance will closely monitor the impacts on financials of the trainings VP for 2nd quarter
being given to employees. Finance 2016 – 4th
quarter 2017
6) FINANCIAL PROJECTIONS
BASIS AND ASSUMPTIONS
 Upon implementation of the recommended strategies, it is expected that the total

sales revenues will have a CAGR raging from 13% on the high range to 9% on the
low range.
 A loan amounting to Php100 Million is also initially needed to finance the trainings
needed by employees and hiring of new employees and consultants to help improve
the quality of customer satisfaction of the company.
 Further equipments needed for the improvement of service will be financed by a mix
of the remaining funds from the Php100 Million loan, internally generated funds
retained from the previous year of operations which is roughly around 40% of the
previous year’s net income. Also, if necessary, issuance of new stock to the public
and/or strategic partners.
 Staff Cost, Marketing and Sales Cost and Professional Fees are also expected to
grow to around 20% from the current 14%, 17% and 16% respectively.
PROJECTED INCOME STATEMENT
High Range Projections
(in thousands) 2013 2014 2015f 2016f 2017f 2018f

REVENUES
Service revenues 90,500,137 99,024,604 111,897,803 126,444,517 142,882,304 161,457,004
Nonservice revenues 4,640,848 4,211,109 4,358,498 4,511,045 4,668,932 4,832,344
95,140,985 103,235,713 116,256,300 130,955,562 147,551,236 166,289,348
OTHER INCOME
Interest income 688,249 682,998 562,122 562,122 562,122 562,122
Gain on disposal of
64,333 101,159 131,797 131,797 131,797 131,797
property and equipment
Other income 475,246 470,647 559,258 559,258 559,258 559,258
1,227,828 1,254,804 1,253,177 1,253,177 1,253,177 1,253,177
COST AND EXPENSES
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General, selling and
37,318,839 41,382,877 47,613,904 54,919,034 63,506,623 73,616,338
administrative
Depreciation and
27,477,494 18,123,524 19,006,105 18,607,170 18,381,772 18,254,422
amortization
Cost of sales 9,953,106 10,661,344 13,326,680 16,658,350 20,822,938 26,028,672
Interconnect cost 9,280,229 8,429,934 8,856,491 8,856,491 8,856,491 8,856,491
Financing cost 2,911,785 2,565,706 2,604,954 2,604,954 2,604,954 2,604,954
Impairment losses 2,482,628 3,720,169 2,496,241 2,496,241 2,496,241 2,496,241
Equity in net losses of joint
79,959 224,257 103,786 103,786 103,786 103,786
ventures
89,504,040 85,107,811 94,008,161 104,246,026 116,772,804 131,960,904
INCOME BEFORE
6,864,773 19,382,706 23,501,316 27,962,713 32,031,609 35,581,621
INCOME TAX
PROVISIONS FOR
(BENEFITS FROM)
INCOME TAX
Current 4,995,416 5,879,878 6,232,671 6,606,631 7,003,029 7,423,211
Deferred (3,090,888) 130,636 (1,298,468) (1,298,468) (1,298,468) (1,298,468)
1,904,528 6,010,514 4,934,203 5,308,163 5,704,561 6,124,743
NET INCOME 4,960,245 13,372,192 18,567,113 22,654,550 26,327,048 29,456,879
Low Range Projections

REVENUES
Service revenues 90,500,137 99,024,604 107,936,818 117,651,132 128,239,734 139,781,310
Nonservice revenues 4,640,848 4,211,109 4,358,498 4,511,045 4,668,932 4,832,344
95,140,985 103,235,713 112,295,316 122,162,177 132,908,666 144,613,654
OTHER INCOME
Interest income 688,249 682,998 562,122 562,122 562,122 562,122
Gain on disposal of
64,333 101,159 131,797 131,797 131,797 131,797
Other income 475,246 470,647 559,258 559,258 559,258 559,258
1,227,828 1,254,804 1,253,177 1,253,177 1,253,177 1,253,177
COST AND EXPENSES
General, selling and
37,318,839 41,382,877 47,613,904 54,919,034 63,506,623 73,616,338
administrative
Depreciation and
27,477,494 18,123,524 19,006,105 18,607,170 18,381,772 18,254,422
amortization
Cost of sales 9,953,106 10,661,344 13,220,067 16,392,883 20,327,174 25,205,696
Interconnect cost 9,280,229 8,429,934 8,856,491 8,856,491 8,856,491 8,856,491
Financing cost 2,911,785 2,565,706 2,604,954 2,604,954 2,604,954 2,604,954
Impairment losses 2,482,628 3,720,169 2,496,241 2,496,241 2,496,241 2,496,241
79,959 224,257 103,786 103,786 103,786 103,786
ventures
89,504,040 85,107,811 93,901,548 103,980,559 116,277,041 131,137,928
INCOME BEFORE
6,864,773 19,382,706 19,646,945 19,434,796 17,884,802 14,728,904
INCOME TAX
168 | P a g e
PROVISIONS FOR
(BENEFITS FROM)
INCOME TAX
Current 4,995,416 5,879,878 6,173,872 6,482,565 6,806,694 7,147,028
Deferred (3,090,888) 130,636 (1,298,468) (1,298,468) (1,298,468) (1,298,468)
1,904,528 6,010,514 4,875,404 5,184,097 5,508,226 5,848,560
NET INCOME 4,960,245 13,372,192 14,771,542 14,250,698 12,376,576 8,880,343
 Service revenue is expected to increase by 13% for the high range projections and
9% for the low range projections.
 Non-service revenue is expected to maintain its current CAGR of 3.5%.
 Other income forecasted values are the average in past 4 years due to no significant
trend being expected. Also, the values in the past 4 years of the said item do not
show any stable value.
 General, Selling and Administrative Expense are expected to increase due to the
20% increase in Staff Cost, Selling and Marketing Cost and Cost from professional
and contracted services.
 Depreciation and Amortization values are based on the CAGR in the past 4 years.
 Cost of Sales is also forecasted to increase by 13% on the high range and 9% on the
low range due to the increase in service revenues.
 Interconnect cost, financing cost, Impairment losses and Equity in net losses of joint
ventures are also the average of the past 4 years as no trend and stable values are
found.
 Income Tax is also forecasted to increase by 13% in the high range and 9% on the
low range due to the increase in sales revenues.
PROJECTED BALANCE SHEET

ASSETS
Current Assets
Cash and cash equivalents 7,420,735 16,756,908 10,285,475 11,112,417 12,143,742 13,386,334
Recievables 15,200,923 17,860,750 16,183,839 17,485,004 19,107,758 21,062,933
Inventories 3,544,887 3,186,415 3,137,707 3,389,976 3,704,594 4,083,661
Derivative Assets 1,834 8,319 5,085 5,085 5,085 5,085
Prepayments and other current
9,462,823 8,929,671 9,071,790 9,071,790 9,071,790 9,071,790
assets
Assets classified as held for
0 0 389,161 389,161 389,161 389,161
sale
169 | P a g e
Total Current Assets 35,631,202 46,742,063 39,073,058 41,453,433 44,422,130 47,998,965
Noncurrent Assets
Property and Equipment 110,424,072 117,229,158 128,779,744 140,041,467 154,178,326 171,265,888
Investment Property 0 0 47,911 47,911 47,911 47,911
Intangible assets and goodwill 3,840,660 5,671,644 6,579,107 7,631,764 8,852,846 10,269,302
Deferred income tax assets 1,916,878 1,904,298 1,400,926 1,400,926 1,400,926 1,400,926
Derivative assets 553,562 580,224 566,893 566,893 566,893 566,893
Investments in an associate
162,754 450,717 261,416 261,416 261,416 261,416
and joint venture
Other noncurrent assets 6,549,805 6,928,848 6,063,795 6,063,795 6,063,795 6,063,795
Total noncurrent Assets 123,447,731 132,764,889 143,699,792 156,014,172 171,372,114 189,876,131
TOTAL ASSETS 159,078,933 179,506,952 182,772,850 197,467,605 215,794,244 237,875,095
LIABILITIES
Current Liabilities
Accounts payable and accured
39,486,830 47,526,559 34,947,507 34,947,507 34,947,507 34,947,507
expenses
Notes payable 5,219,900 - 3,010,187 3,010,187 3,010,187 3,010,187
Current portion of long-term
5,980,300 6,129,663 7,760,555 7,760,555 7,760,555 7,760,555
debt
Unearned revenues 2,759,644 4,609,967 3,086,664 3,086,664 3,086,664 3,086,664
Income tax payable 1,028,263 1,587,428 1,793,794 2,026,987 2,290,495 2,588,259
Derivative liabilities 219,694 94,809 189,596 189,596 189,596 189,596
Provisions 294,700 401,288 266,488 266,488 266,488 266,488
Liablilities directly associated
with the assets classified held 0 0 260,781 260,781 260,781 260,781
for sale
Total current Liabilities 54,989,331 60,349,714 51,315,572 51,548,765 51,812,273 52,110,037
Noncurrent Liabilities
Long-term debt 58,100,749 59,146,140 59,246,140 59,236,140 59,226,140 59,216,140
Deferred income tax liabilities 0 399 1,550,290 1,550,290 1,550,290 1,550,290
Derivative liabilities 0 0 15,848 15,848 15,848 15,848
Other long-term liabilities 4,349,602 5,473,033 7,498,055 10,272,336 14,073,100 19,280,147
Total noncurrent Liabilities 62,450,351 64,619,572 68,310,333 71,074,614 74,865,378 80,062,425
TOTAL LIABILITES 117,439,682 124,969,286 119,625,905 122,623,378 126,677,651 132,172,462
EQUITY
Paid-up capital 34,402,396 44,478,242 44,478,242 44,478,242 44,478,242 44,478,242
Cost of share-based payments 261,144 189,433 374,231 374,231 374,231 374,231
Other reserves (739,575) (977,853) (977,853) (977,853) (977,853) (977,853)

Retained earnings 7,715,286 10,852,478 19,276,959 30,974,240 45,246,607 61,832,647
Non-Controlling Interest 0 (4,634) (4,634) (4,634) (4,634) (4,634)
TOTAL EQUITY 41,639,251 54,537,666 63,146,945 74,844,226 89,116,593 105,702,633
TOTAL LIABILITIES AND
159,078,933 179,506,952 182,772,850 197,467,605 215,794,244 237,875,095
EQUITY

ASSETS
Current Assets
170 | P a g e
Cash and cash equivalents 7,420,735 16,756,908 10,281,902 10,969,920 11,698,027 12,439,687
Recievables 15,200,923 17,860,750 16,178,217 17,260,790 18,406,440 19,573,417
Inventories 3,544,887 3,186,415 3,136,617 3,346,505 3,568,623 3,794,876
Derivative Assets 1,834 8,319 5,085 5,085 5,085 5,085
9,462,823 8,929,671 9,071,790 9,071,790 9,071,790 9,071,790
assets
Assets classified as held for
0 0 389,161 389,161 389,161 389,161
sale
Total Current Assets 35,631,202 46,742,063 39,062,772 41,043,251 43,139,125 45,274,016
Noncurrent Assets
Property and Equipment 110,424,072 117,229,158 128,726,532 137,919,475 147,540,964 157,168,927
Investment Property 0 0 47,911 47,911 47,911 47,911
Intangible assets and goodwill 3,840,660 5,671,644 6,579,107 7,631,764 8,852,846 10,269,302
Deferred income tax assets 1,916,878 1,904,298 1,400,926 1,400,926 1,400,926 1,400,926
Derivative assets 553,562 580,224 566,893 566,893 566,893 566,893
Investments in an associate
162,754 450,717 261,416 261,416 261,416 261,416
and joint venture
Other noncurrent assets 6,549,805 6,928,848 6,063,795 6,063,795 6,063,795 6,063,795
Total noncurrent Assets 123,447,731 132,764,889 143,646,580 153,892,180 164,734,752 175,779,170
TOTAL ASSETS 159,078,933 179,506,952 182,709,353 194,935,431 207,873,877 221,053,186
LIABILITIES
Current Liabilities
Accounts payable and accured
39,486,830 47,526,559 34,947,507 34,947,507 34,947,507 34,947,507
expenses
Notes payable 5,219,900 - 3,010,187 3,010,187 3,010,187 3,010,187
Current portion of long-term
5,980,300 6,129,663 7,760,555 7,760,555 7,760,555 7,760,555
debt
Unearned revenues 2,759,644 4,609,967 3,086,664 3,086,664 3,086,664 3,086,664
Income tax payable 1,028,263 1,587,428 1,730,297 1,886,023 2,055,765 2,240,784
Derivative liabilities 219,694 94,809 189,596 189,596 189,596 189,596
Provisions 294,700 401,288 266,488 266,488 266,488 266,488
Liablilities directly associated
with the assets classified held 0 0 260,781 260,781 260,781 260,781
for sale
Total current Liabilities 54,989,331 60,349,714 51,252,075 51,407,801 51,577,543 51,762,562
Noncurrent Liabilities
Long-term debt 58,100,749 59,146,140 59,246,140 59,236,140 59,226,140 59,216,140
Deferred income tax liabilities 0 399 1,550,290 1,550,290 1,550,290 1,550,290
Derivative liabilities 0 0 15,848 15,848 15,848 15,848
Other long-term liabilities 4,349,602 5,473,033 7,498,055 10,272,336 14,073,100 19,280,147
Total noncurrent Liabilities 62,450,351 64,619,572 68,310,333 71,074,614 74,865,378 80,062,425
TOTAL LIABILITES 117,439,682 124,969,286 119,562,408 122,482,415 126,442,921 131,824,987
EQUITY
Paid-up capital 34,402,396 44,478,242 44,478,242 44,478,242 44,478,242 44,478,242
Cost of share-based payments 261,144 189,433 374,231 374,231 374,231 374,231
Other reserves (739,575) (977,853) (977,853) (977,853) (977,853) (977,853)

Retained earnings 7,715,286 10,852,478 19,276,959 28,583,030 37,560,970 45,358,213
Non-Controlling Interest 0 (4,634) (4,634) (4,634) (4,634) (4,634)
TOTAL EQUITY 41,639,251 54,537,666 63,146,945 72,453,016 81,430,956 89,228,199
171 | P a g e
TOTAL LIABILITIES AND
159,078,933 179,506,952 182,709,353 194,935,431 207,873,877 221,053,186
EQUITY
 Cash, receivables and inventory values are the average percentage of the said
values against total assets in the past 4 years.
 Derivative Assets, Prepayments and other current assets, Assets classified as held
for sale, Investment Property, Deferred income tax assets, Derivative assets,
Investments in an associate and joint venture, Other noncurrent assets, Accounts
payable and accrued expenses, Notes payable, Unearned revenues, Derivative
liabilities, Provisions and Liabilities directly associated with the assets classified held
for sale, Deferred income tax liabilities, Derivative liabilities, Paid-up capital, Cost of
share-based payments and Other reserves are the past 4 year average as no trend
and stable values are found.
 Intangible assets and goodwill values are based on its CAGR in the past 4 years of
16.5%
 Php100 Million is added on the average values of long-term debt in 2015.
 The increase in retained earnings values are around 60% of the previous year net
income
PROJECTED STATEMENT OF CASH FLOWS
(In Thousands)
CASH FLOW FROM 2013 2014 2015f 2016f 2017f 2018f
OPERATIONS
Income before income tax 6,864,773 19,382,706 23,501,316 27,962,713 32,031,609 35,581,621
Adjustments for:
Depreciation and
27,477,494 18,123,524 19,006,105 18,607,170 18,381,772 18,254,422
amortization
79,959 224,257 103,786 103,786 103,786 103,786
ventures
Impairment loss 26,312 110,238 2,496,241 2,496,241 2,496,241 2,496,241
Provisions for claims 88,333 137,185 93,948 93,948 93,948 93,948
Loss (gain) on derivative
59,282 (103,560) (11,562) (11,562) (11,562) (11,562)
instruments
Cost of share-based
50,000 31,841 184,798 0 0 0
payment
Interest Income (688,249) (682,998) (562,122) (562,122) (562,122) (562,122)
Interest Expense 2,091,915 2,326,171 2,174,293 2,174,293 2,174,293 2,174,293
Foreign exchange losses
486,308 (884) 55,697 55,697 55,697 55,697
(gains)
Gain on disposal of
(64,333) (101,159) (131,797) (131,797) (131,797) (131,797)
property
172 | P a g e
Operating income before
36,471,794 39,447,321 46,910,703 50,788,367 54,631,864 58,054,527
working capital
Changes in operating
assets and liabilities:
Decrease (incease) in:
Recievables (3,607,858) (3,240,009) 1,676,911 (1,301,165) (1,622,754) (1,955,175)
Inventories and supplies (1,468,350) 358,472 48,708 (252,269) (314,618) (379,068)
Prepayments and other
3,547,877 201,119 (142,119) 0 0 0
current assets
Other noncurrent assets 727,308 (275,508) 865,053 0 0 0
Increase (decrease) in:
Accounts payable 965,321 4,047,846 (12,579,052) 0 0 0
Unearned revenues 1,750,561 356,504 (1,523,303) 0 0 0
Other long-term liabilities 677,032 633,143 2,025,022 2,774,280 3,800,764 5,207,047
Cash generated from
39,063,685 41,528,888 37,281,923 52,009,214 56,495,256 60,927,331
operations
Income tax paid (5,103,438) (5,073,730) (5,733,315) (6,478,646) (7,320,870) (8,272,583)
Net cash flows provided
33,960,247 36,455,158 31,548,608 45,530,569 49,174,387 52,654,748
by operating activities
CASH FLOW FROM

INVESTMENTS
Additions to:
Property and equipment (28,999,480) (21,120,217) (11,550,586) (11,261,723) (14,136,860) (17,087,561)
Intangible Assets (101,956) (114,913) (907,463) (1,052,657) (1,221,082) (1,416,455)
Investments and advances (59,010) (548,000) 189,301 0 0 0
Interest received 771,868 786,531 562,122 562,122 562,122 562,122
Proceeds from loans
187,536 532,027 359,782 359,782 359,782 359,782
recievables
Proceeds from sale of
105,760 197,773 131,797 131,797 131,797 131,797
Proceeds from return of
- 62,944 - - - -
capital
Acquisition of subsidiaries - (12,251) - - - -
Net cash flow used in
(28,095,282) (20,216,106) (11,215,047) (11,260,679) (14,304,241) (17,450,316)
investing
CASH FLOW FROM

FINANCING ACTIVITIES
Proceeds from borrowings:
Long-term 16,695,035 7,000,000 100,000 (10,000) (10,000) (10,000)
Short-term 3,428,880 1,700,112 1,630,892 0 0 0
Repayments of borrowings
Long-term (13,613,525) (6,025,143) (10,816,250) (10,816,250) (10,816,250) (10,816,250)
Short-term (432,070) (6,917,068) (4,014,386) (4,014,386) (4,014,386) (4,014,386)
Payments of dividends to
stockholders
Common (8,876,764) (9,952,702) (11,093,463) (16,125,876) (16,686,043) (19,022,089)
Preferred (56,983) (26,457) (39,578) (39,578) (39,578) (39,578)
Issuance of non-voting
- 9,938,571 - - - -
preferred stock
Exercise of stock options 44,653 33,723 31,616 31,616 31,616 31,616
Interest paid (2,665,459) (2,693,173) (2,644,126) (2,644,126) (2,644,126) (2,644,126)
Net cash provided by
(5,476,233) (6,942,137) (26,845,295) (33,618,600) (34,178,767) (36,514,813)
(used in) financing
173 | P a g e
activities
NET INCREASE IN CASH 388,732 9,296,915 (6,511,734) 651,290 691,379 (1,310,380)

NET FOREIGN
EXCHANGE 272,248 39,258 36,728 36,728 36,728 36,728
DIFFERENCE ON CASH
CASH AT THE
BEGINNING OF THE 6,759,755 7,420,735 16,756,908 10,281,902 10,969,920 11,698,027
YEAR
CASH AT THE END OF
7,420,735 16,756,908 10,281,902 10,969,920 11,698,027 10,424,375
THE YEAR
(In Thousands)
CASH FLOW FROM 2013 2014 2015f 2016f 2017f 2018f
OPERATIONS
Income before income tax 6,864,773 19,382,706 19,646,945 19,434,796 17,884,802 14,728,904
Adjustments for:
Depreciation and amortization 27,477,494 18,123,524 19,006,105 18,607,170 18,381,772 18,254,422
Equity in net losses of associates 79,959 224,257 103,786 103,786 103,786 103,786
Impairment loss 26,312 110,238 2,496,241 2,496,241 2,496,241 2,496,241
Provisions for claims 88,333 137,185 93,948 93,948 93,948 93,948
Loss (gain) on derivative
59,282 (103,560) 11,562 11,562 11,562 11,562
instruments
Cost of share-based payment 50,000 31,841 184,798 0 0 0
Interest Income (688,249) (682,998) (562,122) (562,122) (562,122) (562,122)
Interest Expense 2,091,915 2,326,171 2,174,293 2,174,293 2,174,293 2,174,293
Foreign exchange losses (gains) 486,308 (884) 55,697 55,697 55,697 55,697
Gain on disposal of property (64,333) (101,159) (131,797) (131,797) (131,797) (131,797)
Operating income before working
36,471,794 39,447,321 43,079,457 42,283,574 40,508,181 37,224,933
capital
Changes in operating assets and
liabilities:
Decrease (incease) in:
Recievables (3,607,858) (3,240,009) 1,682,533 (1,082,573) (1,145,650) (1,166,978)
Inventories and supplies (1,468,350) 358,472 49,798 (209,888) (222,118) (226,252)
3,547,877 201,119 (142,119) 0 0 0
assets
Other noncurrent assets 727,308 (275,508) 865,053 0 0 0
Increase (decrease) in:
Accounts payable 965,321 4,047,846 (12,579,052) 0 0 0
Unearned revenues 1,750,561 356,504 (1,523,303) 0 0 0
Other long-term liabilities 677,032 633,143 2,025,022 2,774,280 3,800,764 5,207,047
Cash generated from operations 39,063,685 41,528,888 33,457,389 43,765,393 42,941,178 41,038,750
Income tax paid (5,103,438) (5,073,730) (5,530,366) (6,028,099) (6,570,627) (7,161,984)
Net cash flows provided by
33,960,247 36,455,158 27,927,023 37,737,295 36,370,550 33,876,766
operating activities
CASH FLOW FROM

INVESTMENTS
Additions to:
174 | P a g e
Property and equipment (28,999,480) (21,120,217) (11,497,374) (9,192,942) (9,621,490) (9,627,962)
Intangible Assets (101,956) (114,913) (907,463) (1,052,657) (1,221,082) (1,416,455)
Investments and advances (59,010) (548,000) 189,301 0 0 0
Interest received 771,868 786,531 562,122 562,122 562,122 562,122
Proceeds from loans recievables 187,536 532,027 359,782 359,782 359,782 359,782
Proceeds from sale of property
105,760 197,773 131,797 131,797 131,797 131,797
and equipment
Proceeds from return of capital - 62,944 - - - -
Acquisition of subsidiaries - (12,251) - - - -
Net cash flow used in investing (28,095,282) (20,216,106) (11,161,835) (9,191,898) (9,788,871) (9,990,717)
CASH FLOW FROM

FINANCING ACTIVITIES
Proceeds from borrowings:
Long-term 16,695,035 7,000,000 100,000 (10,000) (10,000) (10,000)
Short-term 3,428,880 1,700,112 1,630,892 0 0 0
Repayments of borrowings
Long-term (13,613,525) (6,025,143) (10,816,250) (10,816,250) (10,816,250) (10,816,250)
Short-term (432,070) (6,917,068) (4,014,386) (4,014,386) (4,014,386) (4,014,386)
Payments of dividends to
stockholders
Common (8,876,764) (9,952,702) (7,525,089) (10,401,382) (8,397,577) (8,356,574)
Preferred (56,983) (26,457) (39,578) (39,578) (39,578) (39,578)
Issuance of non-voting preferred
- 9,938,571 - - - -
stock
Exercise of stock options 44,653 33,723 31,616 31,616 31,616 31,616
Interest paid (2,665,459) (2,693,173) (2,644,126) (2,644,126) (2,644,126) (2,644,126)
Net cash provided by (used in)
(5,476,233) (6,942,137) (23,276,921) (27,894,106) (25,890,301) (25,849,298)
financing activities
NET INCREASE IN CASH 388,732 9,296,915 (6,511,733) 651,290 691,378 (1,963,249)
NET FOREIGN EXCHANGE
272,248 39,258 36,728 36,728 36,728 36,728
DIFFERENCE ON CASH
CASH AT THE BEGINNING OF
6,759,755 7,420,735 16,756,908 10,281,902 10,969,920 11,698,027
THE YEAR
CASH AT THE END OF THE
7,420,735 16,756,908 10,281,903 10,969,920 11,698,027 9,771,506
YEAR
XII. STRATEGY IMPLEMENTATION, EVALUATION, MONITORING AND CONTROL
1) RECOMMENDED BALANCE SCORECARD
i. STRATEGY MAP
175 | P a g e
Financial
In order for Globe Telecoms to achieve its Vision and its goal to be the undisputed
leader in telecommunication industry in the Philippines, the company must become first the
industry leader in total revenues by 2018. This can be done by hitting Php156 Billion in total
sales revenues by 2018 which translates to a CAGR of 13%.
Customer
In order to achieve the revenue goals, Globe Telecoms should become the
undisputed industry leader in subscriber base in all strong segments of the
telecommunication industry in the Philippines. To get there, the company should have a 25%
CAGR on the number of its postpaid subscribers and 20% on the number of total
subscribers. Also, the company should lower its postpaid churn rate to less than 1% and 2%
for its prepaid subscribers.
176 | P a g e
Internal Process
To support the goals listed above, Globe Telecoms network performance should also
become better. There should be an increase in 3G and 4G reliability to 90% and 95% by
2018. Also, the company’s network latency should decrease to 100ms for 3G and 50ms for
4G by 2018. And finally, the company’s download speed should increase to 15Mb/s for 3G
and 20Mb/s for 4G.
Learning and Growth
There should also be an increase in technical trainings of up to 30% of total trainings,

40% of total trainings for customer service and a decrease in corporate hierarchy of at least
1 level. Also, new hire requirements should include a good track record on customer service.
ii. OBJECTIVES AND INITIATIVES MATRIX
MEASURES /
OBJECTIVES TARGETS INITIATIVES
METRICS
Address customer concerns
to improve customer
CAGR of Sales satisfaction
Financial Sales Growth 13% or higher
Revenues Create strategic promo mix
that address customer
concerns
25% for Create strategic promo mix
Increase % Subscriber
postpaid, 20% that address customer
Subscriber Base growth
for total concerns
Customer
below 1% for Address customer concerns
% of monthly churn
Lower Churn Rate postpaid, 2% for to improve customer
rate
total satisfaction
Increase Data
% of Data Reliability 95%
Reliability
Invest on equipments that
Average latency in
Processes Decrease Latency 50ms increase network speed,
ms
capacity and reliability
Increase Download Average download
20Mb/s
Speed speed in Mb/s
Increase Technical
30% of total Conduct technical trainings for
competencies of % to total trainings
trainings employees
employees
Increase Customer
People 40% of total Hire people with required
Service skills of % to total trainings
trainings technical skills
employees
Decrease streamline the corporate
Average level of
corporate 4 levels hierarchy of management and
corporate hierarchy
hierarchy job functions
177 | P a g e
iii. PERFORMANCE MONITORING DASHBOARD
I. Financial Perspective
II. Customer Perspective
178 | P a g e
III. Internal Process Perspective
IV. People Perspective
179 | P a g e
2) CONTINGENCY PLAN
UPSIDE FACTORS
Upside Factor Proposed Action Plan

Strengthening of the peso against If this event happens, Globe Telecoms can refinance its
the dollar outstanding foreign debt.
Globe Telecoms can also avail of currency hedging facilities of
financial institution to minimize the risk of currency fluctuations in
the future.
Further stock market price Globe Telecoms can offer new securities to the public to finance its
increase future strategies if the stock market continues to hit all-time highs
in the future.
Further decline in interest rates Globe Telecoms can refinance its high-interest bearing loans and
securities with much cheaper loans if a further decline in interest
rate occurs.
DOWNSIDE FACTORS
Downside Factor Proposed Action Plan

Entry of new Telecommunication Globe Telecoms must improve on the quality of the products and
company with strong foreign services it is currently offering. This should be at par with other
partner Asian and ASEAN countries. This will not only shield the company
from treats that subscriber will transfer to the new
telecommunication player, but also will increase the company’s
current market share.
Weakening of the value of the Globe Telecoms can also avail of currency hedging facilities of
peso against the dollar financial institution to minimize the risk of currency fluctuations in
the future.
Natural Calamities that might Globe Telecoms must proactively put in place contingency and
impair Globe’s Equipments. restoration strategies and designated points of contact even before
the said calamities occur so that in a worst case scenario, they can
easily know who will be in charge of what and restorations will be
easier.
Event of war, rebellion or attacks Just like in natural calamities, Globe Telecoms must proactively put
from unlawful individuals. in place contingency and restoration strategies and designated
points of contact even before the said events occur.
Globe Telecoms must also establish early on as to whom should
they coordinate with from the government side if the said events
occurs.
Laws and legal proceedings Globe Telecoms must analyze and budget early on the possible net
enacted against the impact of the said laws and legal proceedings to its bottom line and
telecommunication company’s create possible financial strategies that they can do if the said
revenues. events occur.
180 | P a g e
Incoming change in the country’s Globe Telecoms must create strategies that is independent from
leadership due to the 2016 government support and can still be implemented if no
elections. governmental support is available.
Cybercrime attacks Globe Telecoms must put in place strong cyber security systems
that can deter such attacks.
Globe Telecoms should also develop routine backups of all its
important cyber resources so restoration can easily be done if cyber
attacks happen.
Defaulting suppliers Globe Telecoms must increase its number of critical technology
suppliers so that in an event a supplier defaults, they can easily
switch to new suppliers.
Price falls of the country’s stock Globe Telecoms must save resources early on so that in an event of
market fall of its prices in the stock market they can put stock buyback
activities to increase its shareholder value.
Increase in interest rates Globe Telecoms should refinance its current expensive debt with
long term debts with cheaper rates so that if interest rates go up
they are already safe.
Long power outages Globe Telecoms can put generator sets for its critical facilities or
harness renewable sources of energy like solar and wind to become
backup sources of power if long power outages occur.
Development of new cheaper Globe Telecoms must early on diversify its sources of revenues to
Apps mitigate the effect of new cheaper apps to its revenues.
NTC disapproval of Globe-Bayantel Globe Telecoms can also put strategies that can make Bayantel
Merger profitable and grow even if they will be separate entities from
Globe Telecoms.
181 | P a g e
XIII. APPENDIX
GLOBE TELECOMS
FINANCIAL STATEMENTS
182 | P a g e
PLDT FINANCIAL STATEMENTS
183 | P a g e

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ATENEO GRADUATE SCHOOL OF BUSINESS

MBA STANDARD PROGRAM

STRATEGIC MANAGEMENT PAPER

GLOBE TELECOMS INC.

Professor Edgar Juan Surtida III, MBA

STRAMA S07 (SY 2014 – 2015)

Molave Erik G. Nazaret

June 22, 2015

II. COMPANY INTRODUCTION ............................................................................................. 7

1) AREAS OF OPERATIONS AND HEADQUARTERS ........................................................... 8

2) SHAREHOLDERS STRUCTURE ...................................................................................... 8

3) MANAGEMENT TEAM ................................................................................................. 9

4) CONGLOMERATE MAP AND SUBSIDIARIES ............................................................... 10

5) SIZE IN 2014 REVENUES ............................................................................................ 12

6) NUMBER OF EMPLOYEES .......................................................................................... 12

7) MARKETS COVERED .................................................................................................. 13

8) MARKET POSITION AND MARKET SHARE.................................................................. 13

9) PRODUCTS AND SERVICES PORTFOLIO ..................................................................... 15

10) DISTRIBUTION STRATEGY AND CHANNEL PARTNERS ............................................... 16

III. RESEARCH DESIGN AND METHODOLOGY ..................................................................... 17

IV. CORPORATE VISION, MISSION AND CORE VALUES....................................................... 18

1) VISION, MISSION STATEMENT & CORE VALUES OF GLOBE TELECOMS .................... 18

2) EVALUATION OF GLOBE TELECOMS VISION STATEMENT ......................................... 19

3) EVALUATION OF GLOBE TELECOMS MISSION STATEMENT AND CORE VALUES ...... 20

1) MACRO ENVIRONMENTAL ANALYSIS........................................................................ 21

i. ECONOMIC FACTORS ................................................................................................ 21

ii. SOCIAL / CULTURAL FACTORS ................................................................................... 33

iii. POLITICAL / LEGAL FACTORS ................................................................................. 41

iv. ENVIRONMENTAL FACTORS .................................................................................. 45

v. TECHNOLOGICAL FACTORS ....................................................................................... 46

2) INDUSTRY AND COMPETITOR ANALYSIS ................................................................... 50

vi. PORTER’S FIVE FORCES ......................................................................................... 51

vii. INDUSTRY VALUE CHAIN AND WATERFALL CHART............................................... 56

ix. MARKET SIZE, SHARE AND GROWTH TRENDS ...................................................... 61

x. MARKET ANALYSIS .................................................................................................... 64

xi. MARKET FORECAST ............................................................................................... 79

VI. COMPARATIVE PROFILE MATRIX (CPM) ....................................................................... 83

1) CRITICAL SUCCESS FACTORS ..................................................................................... 84

2) BENCHMARKING VERSUS KEY COMPETITORS .......................................................... 87

3) COMPARATIVE PROFILE MATRIX .............................................................................. 92

VII. EXTERNAL FACTOR EVALUATION (EFE) ......................................................................... 93

1) OPPORTUNITIES AND CORRESPONDING IMPORTANCE WEIGHTS ........................... 93

2) THREATS AND CORRESPONDING IMPORTANCE WEIGHTS ....................................... 96

3) OPPORTUNITIES AND COMPANY RESPONSIVENESS................................................. 98

4) THREATS AND COMPANY RESPONSIVENESS .......................................................... 100

5) EFE MATRIX ............................................................................................................. 102

6) SUMMARY AND CONCLUSION ................................................................................ 103

VIII. INTERNAL FACTORS..................................................................................................... 103

1) MCKINSEY’S 7S FRAMEWORK ................................................................................. 103

i. STRATEGY ................................................................................................................ 103

ii. STRUCTURE ............................................................................................................. 105

iii. SYSTEMS .............................................................................................................. 107

iv. STYLE ................................................................................................................... 110

v. STAFF ....................................................................................................................... 110

vi. SKILLS .................................................................................................................. 111

vii. SHARED VALUES .................................................................................................. 113

2) COMPANY INTERNAL AUDIT ................................................................................... 114

i. MANAGEMENT AUDIT ............................................................................................ 114

ii. MARKETING AUDIT ................................................................................................. 115