Globe Telecom Inc., a leading telecommunications company in the Philippines, is gearing up to establish a large data center to meet the growing demand for data storage and to mitigate geopolitical risks. By capitalizing on this opportunity, Globe aims to enhance its technological capabilities and diversify its revenue sources. This move highlights the company’s transition from a traditional telecom into a technology firm as it explores new avenues for growth and innovation.
Details of the data center
The new data center, set to be the largest in Globe, will be located in Quezon City and will encompass an impressive gross floor area of over 83,000 square meters across four buildings. This significant scale underscores Globe’s commitment to expanding its data center capabilities and meeting the increasing demand for robust and secure data storage solutions. By investing in this infrastructure, the company aims to position itself as a key player in the data center market, capable of providing reliable services to both domestic and international clients.
Competition in the market
Currently, PLDT Inc. leads the data center race in the Philippines, operating ten data centers that account for about two-thirds of the domestic industry’s market share. Globe Telecom seeks to narrow this gap by establishing its largest data center and enhancing connectivity and data capacity. With the new facility, Globe hopes to strengthen its position in the market, attract more customers, and gain a larger share of the data center industry.
Future expansion plans
In addition to establishing its largest data center, Globe has plans to create two additional landing stations in underserved areas. These landing stations will significantly enhance connectivity and data capacity, thereby addressing the digital divide in remote and underdeveloped regions. The company believes that by improving connectivity in these areas, it can foster economic growth, drive innovation, and provide equal access to digital services for all Filipinos.
Attracting hyperscalers to the Philippines
Globe Telecom is confident that the Philippines can emerge as an attractive alternative for hyperscale companies, such as cloud service providers and technology giants. The country’s improved connectivity, increased data center capacity, and potential limitations in Singapore, as well as geopolitical concerns in Hong Kong, make it a desirable location for hyperscalers. By positioning itself as a key player in the data center market, Globe aims to attract these companies and stimulate further economic growth and digital innovation in the Philippines.
Ownership structure
Globe Telecom is backed by significant shareholders, including Singapore Telecommunications Ltd., which owns approximately 47% of the company’s common shares, and Ayala Corp., which holds around 31%. This ownership structure reflects the shared commitment and support for Globe’s expansion plans and underscores the confidence of these major shareholders in the company’s strategic vision and growth potential.
GCash as a growth driver
In recent years, Globe Telecom has been betting on its mobile wallet service, GCash, to propel its growth and diversify its revenue sources. GCash has gained significant traction in the market, offering Filipinos a convenient and secure way to perform digital transactions. Globe is now considering the possibility of an initial public offering (IPO) for GCash within the next one to two years. However, there is no rush for GCash to go public as the company can secure funding from private sources, given the substantial interest from potential investors.
Market response
Upon the announcement of the new data center, Globe Telecom shares experienced a 2.4% decline on Friday. However, in morning trade, the shares rebounded with a 2.1% increase, indicating the market’s recognition of the significance of Globe’s strategic moves. Investors and analysts view the expansion of Globe’s data center capabilities as a positive step towards driving future growth and increasing the company’s competitiveness in the telecommunications and technology sectors.
Globe Telecom’s plan to establish its largest data center underscores the company’s commitment to technological innovation and expansion. By capitalizing on the growing demand for data storage and mitigating geopolitical risks, Globe aims to strengthen its position in the market and attract hyperscale companies to the Philippines. Additionally, the company’s focus on GCash reflects its endeavor to diversify its revenue sources and provide digital financial services to Filipinos. With the backing of significant shareholders and a strategic vision for growth, Globe Telecom is poised to embark on an exciting journey of transformation and expansion in the telecommunications and technology sectors.