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Tag: Philippines

  • Jollibee terminates Dunkin’ Donuts franchise business in China

    Jollibee terminates Dunkin’ Donuts franchise business in China

    Filipino foodservice giant Jollibee Foods Corporation will end its operation of Dunkin’ in China after struggling to expand the business.

    The joint venture agreement with the US coffee and donut chain began in January 2015 with Jollibee planning to open more than 1,400 outlets over 20 years across select Chinese regions, including Beijing. However, Jollibee has only opened seven stores in total to date.

    Jollibee’s partner Jasmine Asset Holdings and the US-based Dunkin’ Donuts Franchising organization have terminated the partnership and the seven Beijing stores will now close, which could result in the US chain exiting the market altogether.

    Richard Shin, Jollibee’s Chief Financial Officer, said it was the right decision to ‘reallocate’ the company’s resources. He added that Dunkin’ was not a core Jollibee business in China, stating that the market is more accustomed to tea than coffee.

    The Chinese branded coffee shop market presents an attractive opportunity for international brands, but a sustained period of trading restrictions since the start of the pandemic and a nationwide zero-Covid policy have impeded sales growth for businesses.

    In its third quarter reporting, US coffee chain Starbucks said its Chinese revenues fell 16%.

    However, the Seattle-based company predicts a turnaround in fortunes in its second-largest market, targeting a 50% increase in Chinese outlets to reach 9,000 locations in the country by 2025.

    Jollibee continues to scale its brands across China but will now focus on building its Taiwanese restaurant chain Yonghe King and porridge shop Hong Zhuang Yuan. The two brands currently have 418 and 55 stores respectively.

    Despite ending its association with Dunkin’, Jollibee retains two coffee businesses. The company acquired US-based The Coffee Bean & Tea Leaf for $350m in 2019 and also operates Vietnamese coffee chain Highlands Coffee.

    According to Jollibee’s second quarter results, shared in August 2022, The Coffee Bean & Tea Leaf achieved 16.5% revenue growth in the three months ended 30 June 2022 and operated 1,059 outlets.

    Highlands Coffee, which Jollibee highlighted in 2021 as ‘the fastest growing business in the Jollibee Group’, currently operates 525 stores.

    Jollibee also owns Taiwanese bubble tea brand Milksha, which has 269 outlets.

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  • Shein’s offline popup store debut in the Philippines

    Shein’s offline popup store debut in the Philippines

    Chinese fashion retailer Shein has opened its first pop-up store in the Philippines, seeking to build brand awareness in the market.

    An opening took place last week at Ayala Malls Manila Bay, featuring a fashion runway, partnerships with Alipay+ and its e-wallet partner GCash and Filipina actress Belle Mariano, its newly appointed local brand ambassador.

    Pureplay online retailer Shein was founded in 2008 by Chris Xu and is recognized for its low-cost clothing. The company currently has customers in more than 150 nations and markets worldwide.

    Statista reports that Shein accounted for 3.4 percent of desktop traffic in May of this year and was the most popular site in the global fashion and apparel category.

    Shein, which aims to surpass other fast-fashion retailers like Zara and H&M, does not have a permanent physical location but has amassed millions of customers worldwide thanks to its broad selection and low pricing.

    After Amazon, it is the second-most popular online buying destination for teenagers in the US. With more than 1.2 million downloads last year, the retailer ranked as the second most popular shopping app in the US App Store.

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  • Globe Deploys 252 More 5G-Ready Cell Sites on Philippines’ Southern Island

    Globe Deploys 252 More 5G-Ready Cell Sites on Philippines’ Southern Island

    Globe announced it has deployed 252 5G-ready cell sites on the Philippines’ southern island of Mindanao. The telco giant’s scaled-up deployment of 5G wireless technology across the country has yielded 933 cell sites in the first half of 2022.

    As of June 30, Globe’s 5G network had reached 85.8% of key cities in Visayas and Mindanao and 96.6% in the National Capital Region in terms of 5G outdoor coverage.

    Data showed a steady hike in 5G usage in Mindanao, particularly in Davao City, which almost tripled in June from the January figures. Likewise, hefty increases were registered in June by Cagayan de Oro and the town of Libona.

    Nationwide, Globe saw a 73.4% increase in 5G data traffic from January to June this year.

    “We continue to invest in the latest mobile technologies like 5G as part of our commitment to bring better mobile experiences that can uplift the lives of our customers no matter where they are in the country,” said Darius Delgado, head of Globe’s consumer mobile business.

    So far, Globe has already spent more than half, or 50.5 billion pesos, of its 89 billion-peso budget for capital expenditures this year. It was used to build new cell sites, upgrade existing sites to 4G/LTE, accelerate the rollout of 5G connectivity and ramp up the fiberization of Filipino homes nationwide, as part of Globe’s commitment to the United Nations Sustainable Development Goals.

    By the end of the first half of 2022, the number of devices serviced by Globe’s 5G network had increased by 52.6%, to 2.7 million, from 1.62 million in January.

    Globe 5G has fiber-fast download speeds of up to 156.84 Mbps (nationwide average) and even higher in Metro Manila at 167.63 Mbps on average as of May this year. These speeds peak at 342.7 Mbps nationwide and 347.2 Mbps in the capital region.

  • Mitsukoshi to land its first Philippines department store this year

    Mitsukoshi to land its first Philippines department store this year

    Isetan Mitsukoshi Holdings is set to open the first Mitsukoshi department store in the Philippines by the end of this year under a partnership with local property developer Federal Land.

    The four-storey lifestyle store, located in Manila’s business district Bonifacio Global City, will host about 120 merchants.

    Targeting younger, middle-class customers, Mitsukoshi is theming the store the “Next Manila Lifestyle” and will offer a range of products from Japan across cuisine, fashion, and cosmetics categories.

    Customers can purchase food from Japanese-inspired restaurants in basement 1, while cosmetics and beauty salon services are on the ground floor.

    The second floor will offer Japanese dining options and a selection of International food choices, along with Japanese homewares and accessories – and will be home to premium retail brands’ stores. The third floor is dedicated to wellness and enjoyment.

    Statista estimates the value of the Philippines’ retail sales at US$53.6 billion last year and predicts that during the next four years spending will increase to $68.71 billion.

    The Covid-19 pandemic has encouraged many Filipinos to move online to shop. As at May 2020, according to Statista, 41 per cent of respondents claimed they made more online purchases due to the epidemic in the Philippines. However, 63 per cent of respondents to a subsequent study in June of last year said they were likely to visit a mall in the upcoming six months.

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  • Ikano Retail posts record revenue growth

    Ikano Retail posts record revenue growth

    Ikano Retail has recorded its highest turnover yet for the financial year to August 31, reaching US$1 billion across the five markets in which it operates Ikea stores – Malaysia, Singapore, Thailand, the Philippines and Mexico, equivalent to 41.2 per cent year-on-year growth.

    The increased sales were driven by the return of visitors to physical stores after two years of Covid-19 disruptions. CEO of Ikano Retail, Christian Roejkjaer, said there were 113 million visits to the group’s stores and shopping centres.

    In Malaysia, where the group operates four shopping centres, the company recorded $361.8 million in sales. Meanwhile, in the Philippines, where earlier this year it opened the world’s largest Ikea store in Pasay City, turnover reached $113.6 million.

    Sales in Singapore and Thailand reached $255.4 million and $276.6 million respectively.

    “Our shelves were not fully stocked as we would have liked it and our costs went way up,” said Roejkjaer. “Still, we are leading our markets for affordable, quality home furnishing solutions – and our customers appreciate that.’’

    The retailer is also accelerating its expansion plan after the easing of Covid-19 restrictions, planning to open its first compact city-centre concept store in Thailand later this year at The Emsphere, along with its third Mexico store.

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  • SIM Cards Must Now Be Registered With Telcos in the Philippines

    SIM Cards Must Now Be Registered With Telcos in the Philippines

    Mobile phone users in the Philippines must now register their SIM cards with their telecom provider after the country’s President, Ferdinand Marcos Jr., signed into law the SIM Card Registration Act.

    According to the official dispatch, the new measure aims to promote accountability in the use of SIM cards and help law enforcement to track those involved in crimes committed through mobile phones.

    Under the new law, all public telecommunications entities or direct sellers must require the SIM card user to show a valid identification document with a photo.

    The registered SIM card details will not be disclosed unless the user authorizes access to his information.

    Law enforcement agencies that conduct probes on purported crimes committed through phones may also submit a written request to telco firms to disclose the details of the SIM card holder.

    The two telecom giants in the Philippines, Globe Telecom and PLDT Group, had previously expressed support for this measure, saying they would be helping the government in preventing crimes committed electronically.

    The law consolidates the bills approved by the House of Representatives and the Senate.

  • Globe’s ‘Historic’ Subsea Cable Project to Be Completed by April 2023

    Globe’s ‘Historic’ Subsea Cable Project to Be Completed by April 2023

    Globe has announced that it has landed fiber optic cable in eight provinces within just two months, on track to complete the landmark project by April 2023.

    The $150-million Philippine Domestic Submarine Cable Network (PDSCN), the longest domestic subsea cable project in the Philippines, has landed in Lucena City, Boac in Marinduque, Calatrava in Romblon, Placer in Masbate, Iloilo City, Bacolod City, Roxas City and most recently, the tourist island of Siargao in Surigao del Norte.

    “This is a historic subsea cable project that will bring better connectivity and data capacity to several communities who rely on communications for their day-to-day needs, including education, work and livelihood,” announced Globe Group President and CEO Ernest Cu.

    The sites are among 33 landing points of PDSCN, which has a total cable distance of about 2,500 kilometers. The project commenced in July and is set to finish covering all sites by April next year.

    “Despite disruptive weather events this wet season, our PDSCN project has been touching down its landing points as planned, bringing reliable fiber connectivity to remote and underserved areas,” said Arlene Jallorina, vice president for strategic infrastructure investments for Globe Business, Enterprise Group.

    The project kicked off in July at the Subic Bay when Globe, Infinivan, Inc. and Eastern Communications, along with Japanese vendor partner Kokusai Cable Ship Co., started transporting fiber optic cable manufactured by global firm Nexans to the landing points across the country.

    The project is seen to deliver connectivity crucial to the country’s recovery from the pandemic, as it will support the government, education, business and even recreational needs for reliable communication facilities.

    Further cable landings will be made in the coming months, including in Mactan, Cebu and Boracay, Aklan. Fiber connections will be activated thereafter.

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  • Philippines Re-elected as ITU Council Member

    Philippines Re-elected as ITU Council Member

    The Department of Information and Communications Technology (DICT) has announced that the Philippines was re-elected to the International Telecommunications Union (ITU) Council on October 3 in Bucharest, Romania.

    One hundred and ninety-three member states of the ITU selected 48 states to lead the Council. The Philippines is among the 13 states selected from Region E (Asia and Australia), along with Australia, Bahrain, China, India, Indonesia, Japan, Korea, Kuwait, Malaysia, Saudi Arabia, Thailand and the United Arab Emirates.

    Represented by DICT, the agency said that the country commits to working towards the fulfillment of the ITU’s mandate to make the digital future inclusive and more accessible for everyone, especially in developing countries.

    “The DICT looks forward to working with all our stakeholders both in the public and private sectors to attain our common aspirations of a digitally empowered Philippines. As a country, we are very eager to take an active part in building a better digital future for all as our commitment under the Bucharest Declaration,” DICT Secretary Ivan John Uy said as he addressed the nation’s win in the ITU Council.

    DICT Undersecretary Jocelle Batapa-Sigue assisted in the country’s successful bid for re-election and will be representing the Philippines until the end of the Plenipotentiary Conference on October 14, 2022

    “To us in government, it may be just work, but for others, it may mean their lives, their food, their education, their health. Let’s help the world in the next four years with every [bit of] knowledge, every sharing we can share. The PH is blessed to stand among nations and have a voice in the next four      years. Let us show the world that DICT is a government agency of global standards. Let us use this seat, this voice to help build a better digital future,” Batapa-Sigue asserted.

    The DICT is expected to lead the country’s involvement in discussions and decision-making that will significantly affect the member states’ digital agenda. The Department also enjoins the support and collaboration of government agencies to achieve its goals as a Council member.

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  • Jollibee plots Tim Ho Wan expansion in China

    Jollibee plots Tim Ho Wan expansion in China

    Philippine fast food chain operator Jollibee Foods on Wednesday said it will inject over $60 million into its dim sum chain, Tim Ho Wan, to expand in mainland China, where strict COVID-19 lockdowns have battered the restaurant industry.

    Jollibee, which aims to join the likes of McDonald’s and Yum Brands as one of the world’s largest quick-service restaurant companies, has seen its business rebound as economies reopen. But recovery in China has hit a snag due to President Xi Jinping’s zero-COVID strategy, which relies on lockdowns and wide-scale testing to fight outbreaks.

    Yet Jollibee remains upbeat about its prospects in China, announcing fresh funding for Titan Dining, the fund that owns the Michelin-starred Tim Ho Wan chain.

    Jollibee owns 90% of Titan Dining and will raise its committed capital in the fund to 315 million Singapore dollars ($217 million) from SG$225 million in November, the company said.

    The fresh capital, Jollibee said, will mainly fund Tim Ho Wan’s store expansion and capital requirements.

    Jollibee Foods aims to open 100 Tim Ho Wan branches in mainland China in the next four years. It currently has 11 stores there, mostly in Shanghai.

    Jollibee Foods had over 6,300 branches worldwide under more than a dozen brands, as of August. The company regards China as one of its three key markets. The others are the U.S. — where it has taken over Los Angeles-based Coffee Bean & Tea Leaf and Denver-based Smashburger — and the Philippines, where the company started out as an ice cream shop before becoming an industry leader that outsells McDonald’s in the country.

    Before investing in Tim Ho Wan in 2018, the company had built other businesses in China, such as Yonghe King, a Taiwanese food-inspired restaurant famous for its freshly prepared soy milk, and Hong Zhuang Yuan, which serves congee and other hot dishes. Yonghe King and Hong Zhuang Yuan have 410 and 54 branches, respectively.

    But the pandemic has hit the restaurant industry hard and a recovery in China has been derailed by the government’s continued reliance on strict lockdowns.

    In its latest quarterly report ended June, Jollibee reported record systemwide (franchised and company-owned stores) sales of 73.1 billion Philippine pesos ($1.24 billion), up 44.8% on the year. But while most of its business units expanded during the quarter, China sales fell 28% “due to COVID-related restrictions” that forced the company to temporarily shut some stores.

    Even before the pandemic, China has not always been an easy market for Jollibee, which was founded by company Chairman Tony Tan Caktiong, who was born to emigrant parents from Fujian province.

    In 2017, the company closed over a dozen hot pot outlets after selling its stake in a beef noodle chain as part of a restructuring the previous year. In 2015, the company announced plans to open more than 1,400 Dunkin’ Donuts shops in China over 20 years under a franchise deal, but it had only opened seven outlets as of June.

  • Shell Philippines to open Adidas and Starbucks stores in its gas stations

    Shell Philippines to open Adidas and Starbucks stores in its gas stations

    Pilipinas Shell Petroleum, the publicly listed Philippine arm of Shell Plc, plans to have retail shops and restaurants in a third of its gasoline refilling stations by 2025 as its seeks to boost revenues beyond fuel.

    That could drive non-fuel retail earnings to grow at least 15% a year and build an income stream that provides a quarter of sales, CEO Lorelie Quiambao Osial said in a Bloomberg interview. Shell wants 550 of its 1,300 to 1,400 stations in the Philippines in 2025 to have retail offerings that range from convenience stores to restaurants and shops like Jollibee, McDonald’s, Starbucks and Adidas.

    “We are transforming what you’d normally call petro retail stations into mobility destinations,” said Osial. “Before it’s motorists-driven. Now, it’s something for the passengers to enjoy as well.”

    Pilipinas Shell’s push to grow its non-fuel revenue while aggressively expanding its gas stations gained focus after it closed its refinery in 2020 and shifted to buy fuel supplies from abroad. The refinery’s closure made earnings more predictable and freed up resources to fund projects with higher yields, like building up its gas station footprint. Currently, a quarter of revenue is from non-fuel retail, Osial said.

    The five-year strategy, which started in 2021, costs about 3 billion pesos ($52.3 million) to 4 billion pesos annually. It calls for adding between 40 to 60 stations a year, to bring Pilipinas Shell’s network to up to 1,400 outlets and five mid-range oil terminals by 2025. The plan is a bet on rising personal income and petroleum demand in the Philippines, and expectations that the country’s “low motorization rate” will catch up with other markets, Osial said.

    Pilipinas Shell has also added electric-vehicle charging points at some of its stations in anticipation of a growth in EV use in the Philippines.

    Among the country’s biggest gasoline retailers, which also include Chevron Corp.’s local unit and the nation’s sole refiner Petron Corp., Shell Pilipinas has been making the biggest push into diversifying away from fuel in its gasoline stations since 2021, said Astro del Castillo, managing director at First Grade Finance Inc., an investment advisor and consultancy firm.

    “It could double this segment by 2025 considering that it’s just starting to aggressively penetrate this market,” he said.

    To further diversify income from fuel, Pilipinas Shell also plans to have 900 of its gas stations in 2025 provide oil change and car maintenance services, said Osial, who helped build Shell’s gas business when the global oil company returned to Iraq in 2013 and was tapped in 2021 to take charge of its Philippine retail operations.

    “There will be more offers on the non-fuel space,” Osial said. “Customer behavior is changing and it’s still evolving.”

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  • PLDT to Start Construction Of Two Major ICT Projects by Year End

    PLDT to Start Construction Of Two Major ICT Projects by Year End

    PLDT Group announced that it will inaugurate the construction of its fourth cable landing station and the initial construction phase of the Asia Direct Cable (ADC) system by the end of the year.

    The two additional major ICT infrastructure projects follow the group’s build-out of the Philippines’ largest hyperscaler data center and the activation of Jupiter, the fastest international cable direct to the US and Japan.

    “After the successful launch and activation of Jupiter, PLDT hopes to lead the country to become the best Transpacific cable hub in Asia, as we work on delivering additional subsea cables and new cable landing stations in 2024,” said former PLDT VP and Technology Advisor for Enterprise Victor Aliwalas.

    The cable landing station in Baler, Aurora, to be completed by 2024, will supplement PLDT’s international gateway on the northern and eastern borders. The ADC cable, meanwhile, is expected to be completed by the end of 2023 and is strengthening the country’s data links in Asia.

    “Apart from the DC and the International connectivity, PLDT is also leading the charge on 5G rollouts and domestic fiber rollouts on top of all the other platforms to significantly increase the country’s take up of digitalization. We are not focusing on just one or two pillars, we are building out the entire ecosystem to work as a whole. We need a full working and energized system to support this hyperscale initiative and PLDT is determined to put together everything to be the strongest hyperscale player in the country, to establish and promote the Philippines as a hyperscale destination,” Aliwalas added.

    PLDT has been working closely with government agencies, including the Department of Trade of Industry and the Department of Information and Communications Technology (DICT), in positioning the Philippines as the next hyperscaler hub in the Asia Pacific, as the country transforms into a globally competitive and digitally empowered nation.

    “We believe that the hyperscalers industry will be the next growth engine of the Philippines. We are keen on helping hyperscalers cloud services and start-up ecosystem in the Philippines,” Aliwalas further noted     .

    DICT Secretary Ivan John Uy also recognized the crucial role of ICT in the social-economic development of the country, saying, “the value of information and communications technology or ICT is encompassing. It is necessary in every aspect of life, business, education, and in advancing our general scientific understanding.”

    “We still have a lot of improvement on key strategic areas such as digital infrastructure buildup to achieve the President’s goal of a digitally transformed Philippine government. Hence, it’s important for us to address the gaps that hinder our drive towards inclusive growth and innovation, especially the long-standing gap in the development of digital connectivity nationwide. And indeed, we want to work hand in hand with our partners to achieve this goal,” he added.

    Last year, PLDT joined the multi-agency government initiative to support the priming of the country’s digital readiness to attract global hyperscalers expanding in Asia, including it as the sixth key sector and highlighting the strong government and private sector partnership to cement the foundation of the Philippine digital economy.

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  • Globe Deploys 933 5G Sites in 1st Half 2022

    Globe Deploys 933 5G Sites in 1st Half 2022

    Globe Telecom has announced that it has built 933 base stations in the first half of 2022 as part of its continued 5G rollout across the Philippines.

    Globe’s 5G network outdoor coverage has reached nearly 97% of the National Capital Region and 86% of key cities in Visayas and Mindanao.

    “Globe has been ramping up its rollout amid rising demand for 5G connectivity. The drive to build more and faster is fueled by our desire to deliver more improvements in our customer service experience that are consistent and reliable,” said Joel Agustin, SVP and head of network planning and engineering at Globe.

    As of end-June 2022, Globe has logged approximately 2.7 million devices on its 5G network.

    The telco giant is also accelerating its 5G roaming rollout to more countries in Asia, the Middle East and Europe to enable the connectivity experience for travelers and overseas Filipino workers.

    For data-related upgrades and expansion, Globe has already spent P50.5 billion out of its P89 billion capital expenditure allocation for 2022. The majority of the amount was used to build its fiber assets further, put up more cell sites, upgrade towers to 4G LTE and roll out 5G technology and in-building solutions.

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  • NOW Telecom’s Equity Restructuring Gets Nod

    NOW Telecom’s Equity Restructuring Gets Nod

    NOW Telecom Company has announced it was granted the approval of the Philippines’ Securities and Exchange Commission (SEC) for the increase of NOW Tel’s authorized capital stock, the quasi-reorganization of its equity and a stock split.

    Following the approval, the company increased the number of its authorized common shares from 14.59 million to 952.09 million and lowered its par value from Php100.00 per share to Php1.00 per share.

    Previously, the stockholders of NOW Corp approved the increase of the company’s stake in NOW Tel, for a total of Php600 million which was part of the proceeds from the placement received from the equity subscription of Velarde, Inc. to NOW Corp. The additional subscription from NOW Corp and other shareholders supported the increase in the authorized capital stock of NOW Tel.

    In addition, the SEC also certified the approval of the equity restructuring to fully expunge NOW Tel’s deficit as of December 31, 2020. The quasi-reorganization has allowed NOW Tel to eliminate its deficit, which will allow the company (NOW Tel) to declare dividends to its shareholders from its unrestricted retained earnings that may be generated subsequent to the quasi-reorganization.

    “This strategic initiative of NOW Tel is envisioned to support its growth plans. The three-step equity restructuring better positions NOW Tel for investors both domestic and foreign to participate in its equity. With the amended Public Services Act allowing up to 100% foreign ownership in public utility companies and this recent approval from SEC, NOW Tel can now proceed in its growth plans starting with its fundraising efforts including but not limited to tapping either the debt market or equity market, or both.” says Rene Rosales, NOW Telecom president and COO.

    Former President Rodrigo Duterte, in 2018, signed into law the proposed extension of NOW Tel’s franchise for another 25 years or until 2043.

  • Cebu Pacific boosts international flights

    Cebu Pacific boosts international flights

    Cebu Pacific, the country’s leading airline, continues to boost its international network as it adds flights to some of its top ASEAN destinations, namely Bangkok and Bali.

    Beginning Aug. 29, 2022, CEB will fly daily from Manila to Bangkok, coming from its current five-times-a-week frequency. By September, flights from Manila to Bali will also increase from thrice to five times weekly.

    The airline also intends to restart its Manila-Brunei flights by Sept. 1, starting with a twice-weekly frequency.

    “We are happy to keep growing our international network as we see an increasing demand for travel abroad, and as more destinations ease restrictions. It is exciting and encouraging to see more Filipinos travelling confidently in and out the Philippines, that is why we make sure we consistently provide convenient and affordable flight options to enable everyJuan to travel more for less,” said Xander Lao, CEB chief commercial officer.

    Fully vaccinated Filipinos flying to these three destinations are only required to present their proof of complete vaccination as Thailand and Indonesia have already eased its restrictions to easily allow tourists to enter.

    Apart from this, the airline also intends to increase its flights from Cebu to Seoul from twice weekly to a daily service by Sept. 9. On Sept. 23, flights to Nagoya from Manila will be daily from its current five times weekly.

    By Oct. 1, CEB’s Bali flights will increase to a daily service, while its flights to Hanoi and Taipei from Manila will both have one additional flight per week – from thrice to four-times-a-week for Hanoi, and twice to thrice weekly for Taipei.

    Coming home, boosted Filipinos no longer need to take a COVID test pre-departure. For more information, passengers may refer to CEB travel reminders page for the latest updates and complete travel guidelines to their destination.

    CEB continues to offer its guaranteed low fares to stimulate travel across its widest domestic network in the Philippines. It continues to implement a multi-layered approach to safety, while it operates with a 100 percent fully vaccinated crew, 95 percent of whom have been boosted.

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  • Globe Gains Approval to Sell 7,000 Towers

    Globe Gains Approval to Sell 7,000 Towers

    Globe announced that it received board approval to sell over 7,000 towers in what is to be the largest ever tower sale and leaseback deal in the Philippines.

    In a company disclosure, Globe said the tower assets offered for sale are comprised of 79% ground-based towers and 21% rooftop towers. The sale has been grouped into three distinct portfolios assigned to three different tower companies representing local and international groups.

    Globe said it expects to raise a significant amount of capital over the next few quarters by executing these transactions. Of the total proceeds, approximately 75% will be used to fund capital expenditures      to support ongoing network expansion and sustain industry-leading network consistency and reliability scores. The balance of 25% will be earmarked to cover 2023 debt servicing requirements.

    Globe said that this will significantly improve the overall health of its balance sheet and provide sufficient flexibility to properly compete in a dynamic market as well as further expand its digital ecosystem.

    As the biggest milestone of this initiative, Globe signed two sale and leaseback agreements for two portfolios consisting of 5,709 telecom towers and related passive telecom infrastructure for over 71 billion pesos.

    The first portfolio being sold consists of 2,180 telecom towers in Luzon, which will be acquired by MIESCOR Infrastructure Development Corp. (MIDC) for a total consideration of 26 billion pesos and be leased back to Globe for an initial period of 15 years. The first close for this portfolio is targeted      within the 3rd quarter of the year, with subsequent closings happening as and when closing conditions are met.  MIDC is a joint venture between investment firm Stonepeak and the country’s largest electric distribution utility company, Meralco.

    The second portfolio consisting of 3,529 towers will be sold to Frontier Tower Associates Philippines Inc. for 45 billion pesos and also leased back over an initial period of 15 years. The first closing target for this portfolio is set for the late third quarter, with subsequent closings happening as and when closing conditions are met.

    Globe is also in advanced discussions with one other tower company for the potential sale and leaseback of an additional ~1,350 telecom towers and related passive telecom infrastructure. This last portfolio is comprised of towers located in the Visayas and Mindanao islands. Globe expects to sign the sale and leaseback agreement with this tower company within the third quarter, with the first closing happening within the 4th quarter of the year.

    “These expanded long-term relationships with the tower companies show Globe’s commitment to help improve the Philippines’ internet condition, as well as our desire to have as many Filipinos enjoy the benefits of having access to reliable internet. We also believe that through these monetization efforts, Globe will be able to further improve overall operational efficiency, allowing us to serve our customers better, and supporting our goal of enabling the digital lives of Filipinos,” said Ernest Cu, Globe President and CEO.

    “We are very pleased with this landmark deal with Globe that marks a critical milestone in MIDC’s strategy to enter digital infrastructure space, which plays a pivotal role in driving economic growth and social well-being through digital inclusion. This also gives momentum to pursue more opportunities that will help us achieve our aspiration to become a trusted telco tower operator in the Philippines and eventually, a market leader in the digital infrastructure business,” MIDC Chairman, Ray Espinosa stated.

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