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Tag: Abysmal

  • SM Group to Divest from Data Centre Business Amid Rising Power Costs in the Philippines

    SM Group to Divest from Data Centre Business Amid Rising Power Costs in the Philippines

    Philippine conglomerate SM Investments Corp., a prominent player in the Sy family business empire, has announced its strategic decision to exit the data centre sector. The company plans to divest its interest in YCO Global Cloud Centres, a move that has raised eyebrows in the industry.

    High Costs Prompt Strategic Shift

    SM Investments’ president and CEO, Frederic C. DyBuncio, pointed to the country’s soaring electricity prices and their relatively small stake in YCO as significant factors influencing this exit. Just a year ago, the company increased its investment in YCO from 10 percent to 18 percent, making this recent withdrawal a notable turnabout. “Right now, we are not really focused on data centres because, from our perspective, power costs are very expensive. The small minority we have in the data centre business, we’ll probably sell that eventually,” DyBuncio revealed in comments reported by the Philippine Star.

    Shifting Preferences in the Data Centre Landscape

    As the market dynamics evolve, DyBuncio highlighted that major global hyperscalers are increasingly favoring locations like Malaysia and Vietnam. These countries present not only lower power expenses but also a reduced risk of natural disasters, making them more attractive for large-scale data operations. It’s a classic case of “the grass is always greener”—but in this instance, it’s clearly rooted in more affordable energy and operational stability.

    A Glimpse into YCO’s Operations

    YCO Global Cloud Centres specializes in developing and operating sustainable, carrier-neutral data centres across the Philippines. Its focus on creating eco-friendly infrastructure shows promise, and while SM Investments steps back, the future of the company may yet remain bright in a region that increasingly demands digital solutions.

    Questions & Answers

    What led SM Investments to exit the data centre business?
    SM Investments decided to move away from the data centre sector primarily due to high electricity costs in the Philippines and their relatively small stake in YCO Global Cloud Centres.

    How significant was SM Investments’ previous investment in YCO?
    Just a year prior to its exit announcement, SM Investments increased its stake in YCO from 10 percent to 18 percent, highlighting a rapid shift in strategy.

    Why are major hyperscalers choosing Malaysia and Vietnam over the Philippines?
    Major hyperscalers prefer Malaysia and Vietnam due to their lower power costs and reduced risks of natural disasters, making these countries more appealing for data centre operations.

  • Abysmal start Zero Pay pilot in South Korean

    Abysmal start Zero Pay pilot in South Korean

    The Seoul city government’s smartphone-based payment-program pilot posted an abysmal track record in its first full month of service, data showed Wednesday.

    In a bid to help relieve small merchants of burdensome credit card fees, the municipality began the trial run of the “Zero Pay” service in late December, enabling users to pay for purchases card-free and receive tax benefits.

    About 8600 purchases totalling 199 million won (US$177,000) were settled via the Zero Pay system in January, according to the data provided to Rep. Kim Jong-seok of the main opposition Liberty Korea Party by the Financial Supervisory Service.

    The number of settlements came to a mere 0.0006 per cent of the 1.56 billion purchases made using credit, debit and prepaid cards, with the value reaching only 0.0003 per cent of the total 58.1 trillion won.

    As of the end of January, slightly over 46,600 small shops and businesses were taking part in the pilot payment service.

    Watchers attributed Zero Pay’s poor record to the small number of participating merchants and customers’ unwillingness to change their payment habits.

    Eleven commercial banks, including all major lenders, joined the test service, which the Seoul city government plans to formally launch after this month.

    Nine more banks are slated to take part in the Zero Pay system, and the municipality will recruit convenience stores and other franchise stores to join.

    Under the system, money is transferred from a consumer account to that of a merchant when the consumer scans the merchant’s QR code with a smartphone using the existing apps of commercial banks or online payment platforms.

    Following its formal launch, the central government plans to gradually expand the service to other parts of the country by offering tax breaks and eliminating related regulations.

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