Globe Telecom CEO Carl Raymond Cruz Talks Business Strategy
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Let's pivot back and have a look at Southeast Asia, specifically the Philippines and the changing guard there, the country's largest telco. Our market cap on your screens is Globe. Share price down about 70%. Hardly been a good year, certainly, overall for markets, just to put that into context. Joining us now is Carl Raymond Cruz, officially appointed the CEO at Globe at the company's annual stockholders meeting, just in fact, which I believe just concluded.

Couple of minutes back. Good morning and thanks for taking the time to speak with us. How was your first AGM? Good morning. First of all, thank you for having me in this show. The first AGM went well. We had a seamless annual stockholders meeting. So hopefully it bodes well for the future of Globe, what lies ahead for all of us.

Alright, now what everyone is, I guess, thinking, and I'm sure you've entertained the question as well, Carl, since the announcement, what are your initial priorities now for the company? Well, I will spend a disproportionate amount of time listening to the organization, engaging consumers, and really trying to bring a sharper customer mindset.

I think coming from my years of experience in the FMCG industry and having worked in a number of markets which are slightly similar, some are probably more volatile than the Philippines, there's a sense that the demand is really driven by a very heavy consumer sector. So hopefully my training to obsess about what the consumer wants and act on it fast will do well for my new journey at Globe.

I'm sure your training with consumers will pay off. But what are you hearing then in terms of the concerns of a recession or the concerns about tariffs and the impact on inflation? How might that potentially feed into the demand from consumers?

Well, obviously it has impacted consumer purchasing power. While I think the economy of the Philippines is going through, coming back to normalcy, where inflation is actually going down and GDP stable at about 5-6%.

It is up to key players such as Globe to make sure that we actually accelerate consumer demand for telco and our products. The good thing about the Philippines, it's the fastest growing digital economy in Southeast Asia, and this bodes well for us.

And the Philippines having, of course, a very young population that are already online bodes well again for the future of Globe because our future customer base is now online and actually growing.

This is also coming against the backdrop though of maturing core telco business for Globe. Overall, what is that going to mean in terms of the strategy you're going to deploy to fire revenues, profits? Correct. So, you know, in my first 90 days of onboarding, I looked at what made Globe successful.

And one of the key success factors of the organization, besides, of course, having a great engaged set of employees and having a great culture, is the fact that everyone in the organization is obsessed with the customers. So moving forward, while a lot of people think that the industry is mature, opportunities actually abound. I'll give you one example. In the Philippines, site density is actually not that good.

I think we have about close to 5,000 users per site. When you compare that to Thailand with half the population, they're only at about 1,500 to 2,000 users at site level. So while people will say it's a mature market, yes it is, but opportunities abound in terms of future revenue growth. Right, and Kyle, well, speaking of since you brought up revenue growth, I mean, I think you guys cleared in the last calendar, I'm just trying to rack my brain,

I think it was 180 billion that's local currency in revenues last year. The last few years have seen low to mid single-digit revenue growth. Are you happy with that rate of growth? You're absolutely correct, David. So it's about low to single-digit. The guidance will remain to be low to single-digit at this point in time. While we re-pivot in terms of looking at how we are positioned in the mobile segment,

and getting a bit more aggressive in the broadband segment and also enterprise or B2B. That guidance as of now remains, but moving forward, the ambition is to actually be the largest, most profitable, and most admired telco operator in the Philippines. And for us to attain that, we need to get to a stronger position in both the fiber market and as well B2B.

What kind of CAPEX are we talking for you to be able to put yourself in a position to realize those objectives? So our CAPEX would still be at the healthy level. We're clearing about 32-34% in terms of CAPEX productivity. But at the same time, bulk of that will be put on and spent on obviously data. Because as I said, the Philippines,

is the fastest growing digital economy in Southeast Asia, in the sub-region. And therefore, to my mind, very clearly, based on what I've seen so far, Globe is best positioned to actually ensure that we benefit from that uptake. At the same time, of course, we're seeing...

We're of course seeing a lot of market volatility in the meantime. Markets are looking forward as well to the GCash IPO. That timeline and what we can potentially expect in terms of size, what more can you tell us about this?

Well, you know, everyone, it's all hands on deck to actually get GCash to be a push button ready for an IPO. Tentative timing would be anywhere between the last quarter of the year or the first half of next year. So all hands are on deck to make sure that it's going to be the most successful offering in the Philippine market.

And obviously, from what you guys know, the valuation the last time it was valued is at US$5 billion. We do expect, based on certain assumptions, that hopefully it could be better than that. How much better are we looking at here? Well, I'm not in a position, but based on what the analysts are saying, it could definitely be higher. I just don't want to comment on a figure right now, David.

Right. I think Ernest, your predecessor mentioned, I think we spoke to him a few weeks ago, he said he was happy with at least eight. But I realize and I acknowledge that there are lots of moving parts, including, by the way, I think your separate conversations that you guys are having with the exchange and the minimum float.

and what have you. Once it's listed, and let's say, just for conversation's sake, it's listed before the end of the year, to your point, early next year, what role will you play specifically and Globe play in terms of running that specific business?

So, Globe will remain to be the largest shareholder of Mint or GCash. And of course, we have to maintain an arm's length relationship with GCash because they also serve, for example, other players in the industry. So, I will be playing a coordinating role with Ernest and the team led by Martha to make sure that we continue to lead the digital and financial inclusion in the Philippines.

in exciting times ahead both for Cortelco at Globe and as well for Fintech at GCash. David and April.

Yeah, and thank you for taking the time to come and share some of your upcoming plans. Congratulations on a successful first AGM. Really going to keep a close watch on how you're going to steer the business going forward. Thanks so much again. Carl Raymond Cruz, CEO of Globe Telecom. How can you grow your business from idea to industry leader? Bring your vision to life with smart business buying tools and technology from Amazon Business.

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