ENTITY’S OBJECTIVES, STRATEGIES AND RELATED BUSINESS RISKS

OBJECTIVES

Globe, one of the country's leading telecommunications providers, aspires to enhance and facilitate
Filipinos' digital lives so that they can have more options, solve challenges, and explore different time to
experience life. Globe achieves this by concentrating on its customers, digitizing businesses, establishing
the network of choice, and empowering its people. Globe continues to assist all of its stakeholders and
offers amazing digital lifestyle channels to Filipinos and all stakeholders.

STRATEGIES

With CAPEX reaching a record high of 51 billion dollars in 2019, Globe continues to invest in the
Philippines to assist Filipino families and businesses prosper. Globe's projects in 2019 will be focused on
improving customer experience and improving its digital offering:

 ACCELERATE NETWORK ROLL-OUT

o Accelerating builds of wireless sites to catch up on demand, increasing wired footprint
to address serviceability.
 INCREASE HOUSEHOLD PENETRATION
o Laying the groundwork for owning the home through innovative products and services,
right channel play, and strategic network migration.
 DEVELOP ICT CAPABILITIES
o Establishing Globe as a trusted digital transformation partner of large and small
enterprise customers by providing compelling ICT services.
 HABITUATE AND MONETIZE
o Sustaining gains in data habituation by protecting the customer base and through
programs to acquire quality customers through content.
 CREATE NEW AND PROFITABLE REVENUE STREAMS
o Unlocking value in digital technology, lifestyle, and entertainment through
complementary plays with core telco products.
 AGILE WORKFORCE
o Building an agile organization with a deeper understanding of the customer to allow us
to be more responsive to customer needs.

BUSINESS RISKS

1. The real price of currency - Foreign currency exchange rates are one of the most serious risks to
telcos, according to 76 percent of study respondents. Currency rate fluctuations have an impact
on everything from final payments to international suppliers to long-term acquisition strategy
investments and budgeting. In BDO's polls, this risk routinely rates high. However, as compared
to previous years' surveys, there was a significant drop this year. Foreign currency rates were
highlighted as a concern by 93 percent of telcos in 2017, up from 82 percent in 2016 and 81
percent the year before. This could be a sign of communications service providers' (CSPs)
success with proactive risk management techniques after last year's geopolitical surprises and
 instability. Despite this, market instability brought on by political turbulence is still a concern for
telecom executives.
2. Competitive threats - Many CSP markets are saturated, and 76 percent of respondents
expressed anxiety about new competitors or increased competition. Because there is little to no
new consumer base left to target, telcos are fighting for the same clients.
3. Money matters - As firms' credit profiles get more complex and negative, some lenders may be
hesitant to accept large loans. Telecommunications, on the other hand, has always required a
large investment in order to generate a large profit.
4. Interest rates - Because telecommunications stocks are intricately connected to interest rates,
any rate fluctuation is swift and often severe. If interest rates fall, for example, investors will
typically sell their bonds and move their money to high-yielding industries such as
telecommunications. Price, on the other hand, comes before a fall because any rate hike could
drive them to swing back just as quickly.
5. Inability to take advantage of new business models - While IoT revenue is becoming less reliant
on connection, the average revenue per user (ARPU) for cellular IoT remains low. To properly
commercialize 5G-enabled IoT offerings as they become more widely available, new business
models that mix connectivity with apps and services will be required. Another driver of business
model innovation is the advent of private 5G networks for businesses. Retail and wholesale
business models are growing more prominent, as are "network-as-a-service" enterprises that
take advantage of telcos' technical skills and spectrum assets.
6. Inability to adapt to changing regulatory landscape - Following the pandemic, regulatory and
legislative concerns have shifted, with a focus on consumer protection, the digital divide, and
network equipment supply chains. The emphasis varies by location, and the maturity of sector
regulation in developed and developing countries is vastly different. The lack of predictability is
most obvious in the field of spectrum releases, where auction timings and reserve prices are
unknown. Newer ideas such as spectrum sharing and "set-asides" for private networks, on the
other hand, have sparked debate.