Globe sees higher profit this year

Ayala-owned Globe Telecom expects its recent tariff promotions and new services that saw drastic cuts in prices to its subscribers to drive the company toward increased profitability this year.

Globe president and chief executive officer Gerardo Ablaza said that while price reductions tend to have a negative impact on revenues, the company’s new offerings were able to stimulate increased activity.

"We are generating enough so that the increased volume more than makes up for the reduction in revenues arising from a cut-down in the unit price," he explained.

For the first time since Globe entered the cellular mobile phone service market, it reduced text messaging rates for its Handyphone brand from P1 to 90 centavos per message to all networks since April 16.

For its Touch Mobile-to-Touch Mobile SMS, the rate was reduced to 75 centavos per message, currently the lowest intra-network rate in the market.

Fierce rival Smart Communications responded by reducing its short message service (SMS) rates to 80 centavos per text on a promotional basis. Text messaging accounts for a sizable bulk of Smart’s service revenues.

Globe has also adopted a per second charging for calls made within the network compared to a fixed charge per minute, with less than a minute of call considered as a full minute before.

The company extended the per second charging program to the IDD arena with calls as low as $0.003 per second beginning last March 31 to 12 select countries and $0.007 for other destinations for all Globe and TM subscribers.

Globe has likewise made permanent its Unlimitxt program where for P15, a subscriber can send as many text messages as he wants to another Globe subscriber for a day.