Globe Telecom, Inc. (GLO) Earnings Call Transcript & Summary

2021 analyst briefing of Globe Telecom. Allow me to introduce our management panel for today's briefing. We have Mr. Ernest Cu, President and Chief Executive Officer; Ms. Rizza Maniego-Eala, Chief Financial Officer; Atty. Froilan Castelo, General Counsel; Mr. Darius Delgado, Head of Consumer Mobile Business; Mr. Peter Maquera, Senior Vice President for the Enterprise Group; Mr. Joel Agustin, Head of Network Planning and Engineering; and Ms. Martha Sazon, President and CEO of Mynt. Mr. Cu will present the highlights of company's performance for the first 9 months of 2021; to be followed by Mr. Delgado, who will discuss the performance in greater detail. Afterwards, Mr. Agustin will provide updates on our network. After which, Ms. Sazon will discuss the latest developments concerning Mynt and GCash. Then we will return to Mr. Cu, who will discuss developments of select subsidiaries and ventures; followed by Mr. Maquera, who will provide recent updates surrounding ICT. Finally, Ms. Maniego-Eala will present the financial results. We will then open the Q&A session beginning with the questions sent via e-mail to [email protected] prior to the start of the briefing, to be followed by additional questions also sent via e-mail during the course of the presentation. We'll now hand over the virtual floor to Mr. Cu. Thank you.

Thank you, Jomari. Good afternoon, and thank you to everyone joining us today. I'm pleased to report sustained improvement in our top line with service revenues growing 4% year-on-year to PHP 113.6 billion. This is on the back of robust performance of data services. Notwithstanding the reimposition of hard lockdowns in August, third quarter registered a 1% improvement in revenue to PHP 38.1 billion, which is also our second highest reported revenue to date. This also marks the second time quarterly revenue has reached PHP 38 billion after the record pre-pandemic revenue of PHP 38.4 billion in the fourth quarter of 2019. Bolstered by revenue performance, EBITDA likewise improved by 1% to PHP 56.9 billion, equivalent to a 50% EBITDA margin. Quarter-on-quarter, EBITDA improved by 2% to PHP 19.5 billion, with EBITDA margin unchanged at 51%. Finally, net income for the period grew 13% year-on-year to PHP 18 billion. On the other hand, third quarter net income declined by 14% quarter-on-quarter to PHP 4.9 billion, weighed down by higher depreciation costs and nonoperating expenses. I'm also pleased to announce that our Board of Directors approved the fourth quarterly dividend of PHP 27 per share. On an annualized basis, this represents 74% of full year core -- 2020 core net income. I now turn you over to Darius to discuss our performance in greater detail.

Thank you, Ernest. As mentioned, our top line performance was driven by data-related products and services, which now account for 80% of gross services revenues. Mobile data revenue grew 8% to PHP 57.9 billion and now contributes more than half of gross service revenues. More and more, our subscribers are turning to mobile data for their needs in lieu of traditional mobile voice and SMS services. Mobile data traffic for the period grew by 55% to 2,730 petabytes from just 1,762 petabytes reported last year. Similarly, we also see mobile data monthly ATPUs growing by 52% year-on-year to 8.4 GBs. Mobile data users are currently at 38.3 million, up 9% year-over-year. Total mobile subscriber base also continues to grow, up 7% year-on-year, driven by increased take-up of our prepaid brands. Home broadband, on the other hand, posted 15% year-on-year growth to PHP 22.4 billion, driven by the heightened demand for high-speed Internet connection. With activity now largely centered in the home, customers are clamoring for faster speeds and stable connections. Corporate data likewise posted double-digit growth of 11% year-on-year to PHP 10.4 billion as businesses also pivot towards digital transformation. This was driven by strong demand and growth in the ICT space, particularly in cloud and cybersecurity services. Now I would like to provide some color on the home broadband front or segment. Compared to a year ago, broadband subscribers grew 7% to 3.7 million, led by a robust 32% increase in fixed wired connections. Quarter-on-quarter, on the other hand, posted an 11% decline, driven by the fixed wireless segment serving a significant number of subscribers in the third quarter, representing customers who have since moved on to a more consistent fiber connection. This is reflective of the shift in habit we observed last year, where our HPW product became an off-the-shelf measure before moving on to a more permanent solution. Furthermore, the HPW subscribers we have churned out have not been active and as such, have not been continuing -- contributing to our top line for the past 12 months. Our results show that despite the reduction in subscribers, the fixed wireless segment still grew quarter-on-quarter and year-on-year with total broadband revenue reaching a record high PHP 7.9 billion. We believe the current count of fixed wireless subscribers in our network now better reflect our active base who prefer to be under wireless network. Thus, we believe churn should normalize back to second quarter levels next quarter. Our customers' growing preference for faster and more reliable connections was the main catalyst of last year's strategic pivot, which saw us accelerating our FTTH builds. As of September this year, we have already surpassed our full year rollout target and laid down over 1 million FTTH lines. I am also happy to report that the pivot to fiber has already generated returns for the company as we reported a nearly 170% increase in fiber revenues and a 240% increase in fiber subscribers year-on-year, allowing us to gain significant ground in this growing market. Here at Globe, we are focused on enabling and empowering our customers through better value propositions, relevant content offerings, reliable self-service platforms and more. We continue to delight our customers with the latest and best products, promos and services. We collaborate with content partners, the likes of WeTV, iQiyi, Viu, HBO GO and more recently, discovery+, to bring Filipinos more relevant content. And with our 2-in-1 entertainment box that is Globe Streamwatch and affordable fiber plans and promos, accessing and enjoying content has never been easier. Furthermore, to better support the growing digital lifestyle, we've upgraded our digital channels and launched the New GlobeOne, which aims to consolidate the customer experience into one easy-to-use and accessible app. These are just a few of our many efforts to enable our customers' digital lifestyles. And with that, I end my portion of the presentation, and I now turn you over to Joel, who will accordingly provide updates on our network.

Thank you, Darius. As of September, we have built 1,080 cell sites, a significant 82% improvement versus the 593 sites we put up last year. We have also upgraded almost 13,000 mobile sites for better speeds, capacity and coverage of our mobile network, which contributed to a mobile consistency score of 76.64 in the third quarter, an improvement versus the 75.98 in the second quarter. NCR, in particular, recorded a mobile consistency score of over 80%, already at par with global benchmarks. Additionally, I would also like to highlight our efforts across the 8 key regional cities of Bacolod, Cagayan de Oro, Cebu, Davao, Iloilo, Lapu-Lapu, Malay and Mandaue. Our targeted upgrades have brought LTE congestion levels to an all-time low, while LTE download speeds and consistency scores show significant improvement in the last 9 months. For 5G, we have expanded over 1,900 sites nationwide and have reached 95% outdoor coverage in NCR. 5G coverage has also reached at least 70% coverage in key cities in Visayas and Mindanao. I am also happy to share that our 5G rollout efforts have been recognized by Opensignal in their 5G Global Impact awards 2021. The award recognizes the top 30 operators with the greatest improvement in the categories of download speed, upload speed, games experience and video experience. Globe was recognized as 1 of the top 10 operators worldwide for 5G uplift in both download and upload speed, with over 700% increase in download speed and over 200% increase in upload speed. Globe was also the #1 most improved in the games experience category with an uplift of 65.2%, while the global average stands at just 8.2%. For video experience, Globe ranked second globally with an uplift of 32.8% against the global average of 8.8%. That ends my portion, and I now turn you over to Martha, who will discuss the latest developments in Mynt and GCash.

Thank you, Joel. Good afternoon, everyone. I'm happy to share with you exciting updates about Mynt and the sustained growth of GCash. We continue to embed GCash in the everyday lives of our users, which has cemented our status as the undisputed leader. We have gained the trust of over 51 million Filipinos across the country. That's around 70% of Filipino adults with a GCash account. We sustained leadership in this space against the 41 million registered users of the competition. Based on the third-party platform App Annie, GCash remains the #1 finance app in the country, with active users 5x that of other banking apps and 4x that of direct competition vis-a-vis other wallets. We also note that our users spend 3x more frequently and 9x longer on the GCash app versus others. We also see high user engagement with our app being used on average more than 2.5x a day by our active users and daily log-ins and daily active transactions peaking at 23 million and 15 million, respectively. With more frequent transactions as of today, we have actually already reached our initial 2021 GTV prediction of PHP 3 trillion. We are tracking to end 2021 with over PHP 3.5 trillion GTV. Lastly, you may recall how we reported positive EBITDA and NIAT in the month of June 2021 during the last Globe briefing. We're proud to report that we now have recorded 4 straight months of profitability, as we continue to create avenues towards sustainable economics delivered through pervasiveness and scale, optimized monetization of our products and prudent cost management. This is a significant milestone for us. GCash is now one of the very few fintech companies in the world who has proven that it can make money. While there is an observed increase of players in this space, we are confident in our continuous growth given these stats, our milestones and how GCash is so deeply ingrained in the daily lives of Filipinos. As we continue to expand our network today, GCash users get to interact with the largest digital ecosystem, comprising over 4 million digital touch points for our users. Our merchant and social seller base has grown to over 3.9 million, a 4.1x increase year-on-year. In addition, users have access to a wide network of over 94,000 cash-in, cash-out agents and can pay everything from utilities to government services to over 1,000 partner billers. Moreover, GLife, our curated in-app e-commerce platform, continues to accelerate the shift of Filipinos towards a more digital lifestyle. GLife banners trustworthy merchants on our platform across various industries like food, lifestyle, gaming. Going beyond shopping and lifestyle, we also give users access to e-government partners and health services marketplace. Currently, we have over 250 trusted brands on our platform and a number that keeps growing day by day because of our ability to use data analytics and increased conversion rate of brand promos which is best-in-class. In a country with a large unbanked and underserved population, GCash provides every Filipino with a full suite of accessible financial services, a list of products that keeps on growing. Our GSave and GInvest products help our users grow and manage their money. GSave continues to provide one of the best savings interest rates in the country and now has PHP 10.3 billion assets under management. GInvest democratized investment for our users by providing easy access to local and even global funds. We now have 77% market share of the total UITF accounts in the country. We continue to add more affordable products to our GInsure platform. Now we have a total of 11 different offerings, with the recent launch of online shopping and vehicle insurance products. Around 1/3 of total new insurance policies in the country are conducted through our platform. Lastly, we continue to transform the lending landscape through GCredit and GLoan. GCredit has provided users access to a personal credit line and has already disbursed a total of PHP 21 billion worth of loans live to date. GLoan, our newest lending product, has enabled preapproved users to borrow as much as PHP 25,000 instantly and pay over 12 months at low interest rates. We're encouraged by the early results as we see strong user availment and best-in-class repayment rates for the product. We believe in the power of our lending products differentiated more so by our proprietary trust and credit scoring platform in GScore. And this is a space that we are heavily focusing on in the months ahead. Lastly, as reported at the start of this month, Mynt secured over $300 million in fresh capital from new investors and existing shareholders at a post-money valuation of over $2 billion. Attracting world-class investors, the funding round was led by Bow Wave; New York-based private equity and venture capital firm, Insight Partners; and global investment firm, Warburg Pincus. Moreover, Globe, Ayala, Amplo and Itai Tsiddon also participated in the round. We are proud to be recognized as the country's first tech unicorn and a double unicorn at that, validating Mynt as the definitive fintech investment in the Philippines and quite possibly in the region. Our ability to attract more world-class investors at this high valuation is proof of our market leadership in our position as the national champion and how we are able to make digital financial services a part of the daily lives of Filipinos, leading to the successful execution of our vision of finance for all. And that ends my segment. We, at GCash, are excited to deliver even more accessible, affordable and easy-to-understand digital services to make more Filipinos' everyday lives better. I now turn you back to Ernest, who will give updates on 917Ventures and Kickstart and Globe reaching an exclusivity agreement with ST Telemedia Global Data Centres.

Thank you, Martha. It's really exciting to witness GCash grow into the double unicorn status that it is today, and we aim to see the same across our various ventures. We're seeing excellent top line performance across the 917Ventures portfolio companies as they continue to deliver relevant digital solutions to customers and even more value to the digital ecosystem. And these are just the highlights. 917Ventures continues to bring in new innovations like EdVenture, KodeGo or KodeGo in the insurance space, BentaTV in the e-commerce space, M360 and Inquiro in the business solutions space and many more forthcoming. Our corporate venture capital firm, Kickstart, recently scored another exit from True Digital Group's acquisition of Zap Group, a locally based loyalty platform for -- a loyalty program platform. They also recently welcomed into their portfolio TreeDots, the first food surplus marketplace in Asia that is creating a vertically integrated supply chain with the B2B marketplace and a social commerce feature for group buying by consumers. TreeDots started in 2017 and went through the Grab Ventures Velocity program launched in Singapore, and it has since expanded to Malaysia. To further reinforce our efforts to transform into a digital platform, I am pleased to share that Globe has signed an exclusivity agreement with ST Telemedia Global Data Centres for the carve-out of Globe's data center business. This potential partnership with a leading data center operator forms part of Globe's long-term strategy to create a top-tier data center business. We envision this transaction to be a multiyear growth driver that will complement and transform into a digital -- our -- will complement our transformation, rather, into a digital platform this time into the B2B space. This is after the success in the B2C area with GCash. In recent years, the country has been seeing a surge in demand for data center capacity, driven by the accelerated digital adoption of Filipinos as well as the current push for data localization and edge computing. We are likewise seeing interest in the country from hyperscalers content and high -- and digital media companies, as the Philippines begins to be seen as a viable, alternative regional hub on the back of its regional or attractive geographical location as well as the heightened geopolitical tensions and regulatory restrictions happening in neighboring countries. We believe we are still at the nascent stage of this market, and Globe is well positioned to capture a significant portion of this growth. As part of this transaction, we are carving out 6 commercial data centers with a nationwide footprint amounting to about 1,500 racks and up to 35 megawatts of power capacity with the midterm expansion potential of up to 45 megawatts. We are likewise including a 3-hectare vacant lot that could potentially be developed into a world-class data center campus. This portfolio, backed by STT's expertise, will allow us to shape the industry and become a larger player in the ICT space. The transaction is expected to take the form of a JV or joint venture, with Globe to remain a significant shareholder post transaction. Although we are approaching the final stages of this deal, this is very much an ongoing discussion with no guarantee of a definitive transaction. But rest assured, we will update the market with more information as this deal develops. These are truly exciting times ahead, and I'd like to turn you over to Peter, who will now discuss the other opportunities in the ICT landscape. Peter?

Thank you, Ernest, and good afternoon, everyone. One industry that will benefit greatly from the improvements of digital infrastructure will be the ICT industry, which is expected to grow 36% from PHP 64 billion in 2020 to PHP 87 billion in 2024, and this will be led by cloud and cybersecurity. Similar to how the pandemic accelerated the digital adoption of consumers, it also accelerated the digital adoption of businesses. This pandemic has shown that the importance of digitalization in ensuring business continuity and operational efficiency to not only survive but to thrive in this digital economy. In a recent survey of business leaders, 94% cited cloud as a top priority and 86% cited cybersecurity. I'm happy to say that Globe is well positioned to capture a significant share of this growth. From our expanded telco infrastructure to our strategic partnerships, Globe now has a formidable end-to-end portfolio in ICT that includes connectivity, cloud, cybersecurity, IoT, big data and business applications. Globe is in a strong place to be the trusted adviser in every business' digital journey. Next slide, please. We're already reaping the benefits from our ICT investments. Our ICT portfolio has grown 40% year-to-date, led by 87% in cloud, 93% in cybersecurity and 69% in business applications. The brands of our investments are being noticed. Our cloud company, Cascadeo, was recently cited in the Gartner Magic Quadrant for its expertise in public cloud transformation. Third pillar is the leading partner of Salesforce.com for customer relationship management, and Yondu is the preferred e-commerce platform developer. To demonstrate ICT's synergy with our core connectivity, note that 76% of our top enterprise customers today more than -- buy more than 5 services from us and 70% buy ICT and connectivity. This has translated to an increase in our average revenue per account of 12%. At this time, I'd like to turn you over to Rizza, our Chief Financial Officer, for the financial highlights. Thank you very much.

Thank you, Peter, and good afternoon to everyone. Year-on-year, service revenues grew by 4% and to PHP 114 billion, while quarter-on-quarter, service revenues improved by 1% to PHP 38 billion. Operating expenses and subsidy also rose year-on-year but still left room for EBITDA to improve by 1% to close to PHP 57 billion. EBITDA margin for the 9-month period is at 50%, in line with our full year guidance. Sequentially, third quarter OpEx and subsidy remained flat against the second quarter, leading to a 2% improvement in EBITDA and a 51% EBITDA margin. Net income came in close to PHP 18 billion, a 13% improvement year-on-year, still benefiting from the impact of the tax law where we made adjustments in the first quarter. On the other hand, quarterly net income recorded a 14% decline to PHP 4.9 billion. Now looking more closely at our operating expenses. Year-on-year, we reported higher spend across most expense items in line with the growing business and expanding network. Staff costs are up 16% year-on-year from higher headcount, while service and other expenses grew by PHP 1.4 billion or 11% mostly from higher cloud services, professional fees and subscriber line installation services. Other expenses also included an increase in spectrum fees. Network costs are likewise up by PHP 1.4 billion, mostly driven by increased utility charges from higher power generation and electricity consumption of our growing network. Repairs and maintenance also contributed to rising costs, driven by higher spend per subscriber line maintenance to serve the growing customer base. Marketing and subsidy grew 9% year-on-year from increased spending on ads and marketing programs as well as from higher commissions from acquisitions. Provisions, on the other hand, posted a 28% decline coming from last year's high base, which included the accumulated uncollected receivables from subscribers affected by the pandemic. This, coupled with a 4% growth in revenue, fully covered for the 7% increase in operating expenses, resulting in an improvement in EBITDA to PHP 57 billion. Now below EBITDA, depreciation costs are up by PHP 2.6 billion or 10% year-on-year, in line with our ongoing network expansion and heightened CapEx spend, while nonoperating costs and taxes are still benefiting from the impact of CREATE in the first quarter. On a quarterly basis, we see the more pronounced effect on rising depreciation charges, driving net income down 14% to PHP 4.9 billion. Nonoperating expenses likewise increased due to higher interest expense, though I'm pleased to note that this was partially offset by an increasing net share in gains from our joint ventures. As of end September, we recorded cash CapEx of PHP 65.4 billion, surpassing full year 2020 spend by 8%. This also represents 86% of our full year CapEx guidance of PHP 76 billion. Similar to previous periods, majority of spend was for data-related initiatives as we continue to build out our network to improve our services. And as Darius and Joel mentioned earlier, our extensive rollout efforts have led to significant improvements in our broadband and mobile networks. We hope to keep this pace going through the last few weeks of the year and well into 2020. I'm also pleased to share again that last October, we once more tapped into the international capital markets and successfully raised $600 million through the issuance of a 5-year U.S. dollar-denominated senior perp capital securities. These securities shall be accounted for as an equity instrument in our books with a distribution rate of 4.2% payable semiannually. The transaction represents the tightest pricing for an equity accounted senior step-up perp from the Philippines during the pandemic and the second tightest ever. The transaction also joins other Philippine equity issuers as the largest size raised in a single tranche under this structure. The success of this transaction is a reflection of global investors' confidence in Globe as a business, and we're pleased to have further strengthened the group's position in the capital markets. The net proceeds from the issuance will be used to finance largely CapEx. On to our balance sheet, our cash reserves at the end of September has declined versus December 2020 levels, mostly due to the heightened CapEx spending as well as the redemption of our nonvoting preferred shares last August. And to facilitate funding, we also drew down some long-term loans, which increased our gross debt level to PHP 207 billion. Despite the elevated debt level, we are still within our prescribed covenants. Gross debt to equity is at 2.6x, and gross debt-to-EBITDA is at 2.9x, all well within our covenants as mentioned earlier. Ernest also shared that our Board recently approved the dividend declaration of PHP 27 per share. This is payable on December 10 with a record date of November 25. This concludes my report. I will now turn you over -- I will now turn the floor over to Jomari for the question-and-answer portion of our briefing. Thank you.

Thank you, Rizza. Before we begin with the question-and-answer session, we'd also like to acknowledge the presence of Tek Olaño, Mynt's Chief Financial Officer, who will be joining as a panelist.

We'll now begin the question-and-answer session. Our first set of questions come from German de la Paz from Abacus Securities. First question -- the first set of questions refer to Mynt actually. The first question is, "I understand that GCash's GTV is expected to surpass PHP 3 trillion this year. May I ask what percentage of this value does GCash actually derive revenue from?"

We do not explicitly disclose the cuts of the GTV. But to answer the question, we have continuously improved use case diversity among our users, growing from 2.3 to, as of end December 2020, to 2.5 use cases as of today. More than that, over 82% of our users are habituated into revenue-generating use cases. We also want to point out not to discount the non-revenue-generating use cases and GTV as this brings value in different forms. These use case, P2P included, are important components for our user journeys towards habituation into other use cases as well as forms part of the foundation, among other data points, for a robust proprietary scoring and trust platform.

Okay. Thanks for that. The second question is, "What is management's forecast when it comes to the growth rate of GCash's gross transaction value in the next 5 to 10 years?"

Again, we do not disclose forward-looking statements. What we like to emphasize though is that PHP 3 trillion GTV has already been reached as of today. And we are forecasting to end the year at more than PHP 3.5 trillion GTV.

And the third and final question is, "What is GCash's EBITDA margins?"

Again, we do not disclose our EBITDA and EBITDA margin. We recorded 4 straight quarters of positive EBITDA and net income, that I can say.

Four straight months, Martha. Four straight months.

Sorry, 4 straight months. GCash is now one of the very few fintechs -- fintech companies in the world who has proven that it can make money. However, the strategy remains to scale and grow through to our vision of financial inclusion.

Okay. Thank you very much, Martha and Tek. The next set of questions come from Arthur Pineda of Citi. Perhaps we'll start off first with mobile just for a change. "Mobile appears to have trended slower versus PLDT in the third quarter, which is surprising considering Globe's stronger postpaid position. Was there any escalation in competitive intensity?"

I'll handle that question. So thanks for that question. I think more than competitive pressures, the decline in mobile revenues in the third quarter is largely attributed to the reimposition of community lockdowns, specifically last August and September. So as you know, our brands are the most vulnerable to mobility restriction given higher broadband penetration among the base. For prepaid brands, for example, we saw a decline in both spend and loaders, mostly from the segment who offload usage to broadband connection at home and also from the financially constrained segment, whose incomes are highly affected by lockdowns. Similarly, on the postpaid side of the business, we've been challenged to sustain [indiscernible] revenues since the start of the pandemic, as a large majority of our postpaid base already have broadband connection. However, once the economy eases up, we will get more ARPUs from such base, which is what we've seen happen in similar occasions in the past. And also, as you've noticed, our 5% increase in mobile data traffic quarter-on-quarter affirms that we have quality subscribers who stay with us and who continue their usage amidst the lockdowns. And we've seen this spend and loader base recovery already happened starting October. And last but not the least, just to emphasize, we have not lowered price nor increased data allocations in our offers that would have impacted yields in the third quarter.

Okay. Thank you, Darius. The next question is on broadband. "Global peers have significantly increased broadband line build targets for 2021. How do you see your net adds trending into the fourth quarter of this year and first quarter of next year? Do you Globe as being able to keep pace with PLDT and Converge?"

Okay. Sorry, I'll answer that question, too. So we -- again, we don't -- similar to Mynt, we don't provide forward-looking statements. But at the minimum, we are expecting our momentum to further escalate into quarter 4 this year in both migration and new acquisitions of fiber, translating to sustained net adds, growing more in step with our growth in our fiber builds also as we increase operational efficiencies and expedite automation of processes internally.

Thank you, Darius. The third question is on Mynt. The question reads, "Mynt's latest capital raise valued asset at USD 2 billion. Can you share the basis on how this asset was valued? There seems to be significant variance between what the Street may be pricing in versus the value in which VCs are attributing?"

Well, the valuation was a negotiated output across Mynt, the shareholders and the new investors considering various factors and methodologies. We do not disclose the multiples of the transaction but believe they are consistent with the other transactions in the market. But please do note that the current valuation is based actually on negotiations with investors that was closed in June 2021. Since then, we also believe that we have continued to scale with the value likely to have improved over that time. Since then, we've already proved that we can make money earlier than expectations as well as sustained user growth. With the continued growth in our users and as we track to PHP 3.5 trillion in gross transaction value, we believe we are on pace to continue to increase our valuation backed by the results we have seen.

Okay. Thanks, Martha. The next set of questions -- well, the next question actually comes from Miguel Ong of Papa Securities. "Just want to ask the margin if they can't provide guidance and outlook for GCash, such as the target number of users." And his second point, I think, was asked earlier, gross transaction value for next year.

I think I've answered -- similar to my answer to the previous question, we do not disclose those numbers or guidance for next year's view, but we'll do so in appropriate time. But for this year, we anticipate to end our GTV with around PHP 3.5 trillion.

Thank you, Martha. The next set of questions come from Rachelleen Rodriguez of ATR Kim Eng. The first question is on CapEx, actually. "What is the forecasted CapEx for 2022?"

We do not have our guidance for 2022 at this time. We will be ready for our guidance, not only in CapEx, but in other metrics for next year by Feb in our next briefing.

Okay. Thank you, Rizza. The next question again is on Mynt. "On your PHP 3 trillion target GTV for GCash, can you share where majority of the growth is coming from? And what are the largest components of GCash's GTV?"

Again, we do not explicitly disclose the cuts of the GTV, but suffice it to say that almost all use cases are growing significantly and actually exponentially. So the growth is broad-based across the various use cases.

Okay. Thanks for that, Martha. There's also a follow-up question on -- there's a third question again on Mynt. "What is the current ownership of Globe in Mynt given the recent fundraising?"

So with the entry of...

Globe -- Go ahead, Martha.

Okay. So with the entry of the new investors, Globe and Ant will each be diluted to around 35% from 40%. Bow Wave and Ayala will hold 14% and 5%, respectively, and the new investors collectively will hold around 11% of the company.

Okay.

If I may just add to Martha's answers, so Globe's ownership is close to 35.5%. And we are still -- or we are now the largest -- single largest shareholder of Mynt after this transaction.

Okay. Thank you, Martha and Rizza. The next set of questions come from Ranjan Sharma of JPMorgan. The first question is, "What is the impact of DITO on data prices? And how much market share have they gained?"

So firstly, we don't do price downs as we want to preserve industry value while delivering still what matters most to our customers. So the DITO pricing hasn't really affected our own pricing. On the market share, what we just know is that they have achieved 4 million cumulative subs to date. However, we are not privy to the revenue generation of this customer base as they have no disclosures yet on their DITO performance. But from a submarket share point of view, they will be around 2% to 3% based on their latest announcement, but subs are not necessarily the best metric as the market in the Philippines is a share-of-wallet game, given very high penetration rates already in mobile today.

Darius, maybe I can add something as well. I think I've stated before that subscriber share, very much to what Darius said, has not been a good indicator. At Globe, it's a leading indicator, but it's not the resulting -- it doesn't result in much market share. It can be easily manipulated, or it can be easily increased by simply creating very aggressive same distribution promos. Now the real proof in the pudding is if the customers will use and pay for the service, and that's what really Globe is focused on. If the market remembers, Globe deemphasized subscriber count measurements way back in 2010. And we have pivoted the company to focusing on the one aspect that truly matters and given the CapEx game that telco is involved in, and that is revenue. If you cannot produce your revenue number and only thing you can show is subscribers, then really, there's no way to measure the business at this stage.

Thank you, Ernest. Thank you, Darius. Next question is on Mynt. "How does Mynt see the impact of other fintech companies now that there is an introduction or the recent introduction of the BSP's QR PH in the Philippines?"

Well, based on what happened in other markets when they instituted the standard interoperable QR, it dramatically increased QR payment adoption. So we are seeing that the total cashless market will increase in the Philippines, which is a positive sign for GCash, given our dominance in this space. We're fully supportive of this initiative as we see the opportunities it can bring to open more doors to -- for Filipinos adapt digital payments safety and conveniently into their daily routines.

Okay. Thank you, Martha. Again, the next set of questions are regarding Mynt, and these come from Rodd Vagilidad of BDO Securities. The first question is, "What are the near-term plans of Mynt for GCash considering its latest fundraising activity?"

Can you repeat the question again?

Yes. I'll repeat, "What are the near-term plans of Mynt for GCash considering its latest fundraising activity?"

Okay. So our focus is in growing GCash even further, the user base and the business itself. So 3 things that we're focusing on. First is lending. In the lending, we recently launched GLoan, and we are very encouraged by the turn out of that and the metrics that are happening now. So we will expand our lending business even further. And we're due to launch BNPL soon, probably this month, if not next month. And then -- so that lending business is a big space for us. We'll also be investing in platforms, and that is to expand our invest tech offering, whether it's crypto, it's global trading or local trading. We're aggressively looking at that as we see that financial services like credit -- lending and investment actually lead to financial inclusion. Thirdly, we'll go aggressive in further penetrating the base of the pyramid. So a lot of investment will go to that, whether it's regional play or down to the micro markets, a lot of plays in that space.

Okay. Thank you, Martha. Well, actually, the next question is regarding Globe's stake in Mynt following the latest funding round. And so this was already answered. We answered this earlier. So we'll proceed to the next set of questions from Mr. King De Mesa of RCBC Securities. The first question pertains to GOMO. "How many subscribers are in GOMO as of September 2021? Any plans on lowering prices in line with competition?"

So GOMO capped its anniversary month with more than 1 million subscribers, and its momentum has been sustained even amidst the lockdown, and it has generated higher ARPUs compared to our mainstream prepaid brand. So a lot of success on the GOMO side. And we are continuously launching innovations as we go along, intending to close the year with much better results. And to answer the question on the price downs, no, we don't do that.

Okay. Thank you, Darius. The next question pertains to broadband. "Can you give further or more color on why fixed wireless subscribers declined 17% Q-on-Q?" I think this was already discussed in the presentation. "I understand that some fixed wireless subscribers upgraded to fixed wired, although in absolute terms, it's roughly 560,000 Q-on-Q reduction in fixed wireless versus only 77,000 -- around 77,000 quarter-on-quarter increase in fixed wired." So I think that was already covered.

Okay. So no need to answer.

Yes. We can just refer King to the answer or to the part of the presentation later. Thank you. The third question is on FTTH. "What's the total FTTH subscribers and FTTH-only revenues as of 9 months 2021? How do these compare versus last year?"

So as also mentioned previously in my presentation, the fiber base actually grew 170% in terms of revenues year-on-year for the 9 months ending September 2021. And in terms of subscriber base, it has grown to 240% for the same period. Sorry, what's the last question?

The second part of the question is, "How do these compare versus last year?" But you already mentioned the year-on-year increase, so we're good.

Yes. Okay. Thank you.

Thank you, Darius. The next question comes from Arthur Pineda of Citi. Again, this is on broadband. "Do you expect to sustain the aggressive broadband capacity expansion targets into 2022 and 2023? Or should this taper off?"

Let me take that, Darius. So considering the momentum that we've established in our delivery this year and our delivery team already set up, we expect to sustain the aggressive broadband rollout into 2022, 2023 as there is still a lot of demand in the market that needs to served.

Okay. Thank you, Joel. The next 3 questions come from Rafael Limpingco of BPI. The first question is regarding Mynt. "What is Mynt's response to the recent news of the government announcement on the ramp-up of surveillance of fintech firms' operations?"

Maybe I can answer that. Actually we welcome it because we've been under the supervision of the BSP for some time. And I guess, given the popularity of e-money today, e-wallets and such, I think it's a welcome announcement that the government will be looking at all of the firms and monitoring and making sure that these firms do advantage the public and not -- and there are not some sort of scams. We saw a pretty high-profile company recently was found out to be operating without a license. And I think that is really good that they're ensuring that everyone is licensed and that everyone adheres and plays by the same rules because I think the public deserves quality entrants into the fintech circle, and we don't want anything to destroy the public's trust in fintech and e-wallets in general.

Thank you, Ernest. The next question is, again, pertaining to Mynt. "Is there any specific business or service line that Mynt is planning to focus on in the medium term?"

I think I've answered that in the previous question. One of the main focus really is financial services, of which lending is a big one. We are set to launch BNPL soon before the year ends. Also in the next -- in the medium-term expect expansion in the invest tech space, that is crypto and trading.

Okay. Thank you, Martha. The third question -- again, I think part of this was already addressed earlier because it's regarding -- the question is, "What are the main drivers of Mynt's revenues and costs?"

Yes, I've that question.

Okay. Okay. Thank you. Actually, there are 2 other questions from Mr. Limpingco, but since we said earlier that we will be addressing a total of 3 questions per analyst, we will ask these later if time allows. The next set of questions come from Ken Anthony Gotianse of ATR Asset Management. The first question is, "Could you provide early statistics from the effect of MNP? Has it been positive for Globe? Or did more subscribers churn out?"

So more than a month post launch of inter-porting, we haven't really seen significant impact to churn in revenues despite aggressive MNP communications and launches by competition. So volumes are still very low. Unfortunately, we cannot give you the details, and very low both in terms of intenders and actual porters. To us, it is really a nonissue as we believe our customers are happy with Globe, and MNP is just about the number, and our relationships with our customers go way beyond that.

Okay. Thank you, Darius. The next question is on broadband. "Globe posted impressive fixed broadband fiber growth in 3Q. Moving forward, does this mean Globe will also be focusing on fiber moving forward? And what is your fiber household coverage?"

I'll answer the first part of the question. Definitely, given the reliability and consistency of the service and experience that FTTH as a technology can give the customers, definitely, we will pull out all the stops in 2022, the same way that we did in the back half of this year in terms of pushing more FTTH, acquiring more new intenders, even switchers and also migrating our legacy subscribers from ADSL fixed wireless onto fiber as well. And the last portion -- sorry, I keep on forgetting, but what's...

Yes, the second part of that question is, "What is your fiber household coverage?"

Can we say that? Joel, do you have numbers in mind?

I don't believe we have that and we cover that number. But based on national averages, I think penetration in Philippines should be around 20%, 25% at the moment. I'd like to comment further on what Darius has mentioned about our stance towards fiber. Fiber is what the public wants, and that's where we're going to be, given how customer-centric Globe is. So you can expect us to be ramping up our selling activities continuously. It has never been our aim to remain third place in FTTH for long. Of course, before we get there, we've got to build the facilities. And you can see Globe ramping up from building 50,000 lines in 2019, 600,000 lines in 2020 and now closing in on 1.3 million, 1.4 million lines in 2021. Without inventory, one cannot sell, right? And so now the work is all hands on deck to ensure that momentum in selling, momentum in migrating continues, and you can see the full effect of that in 2022.

Okay. Thank you, Darius and Ernest. Next question is on Mynt. I think this was already addressed by Martha earlier pertaining to changes made for Mynt to be able to become NIAT positive for 4 straight months. I think that was already addressed. So we'll move on to the next set of questions from German de la Paz of Abacus again. Well, the first question is, I think, was already addressed regarding Globe's stake, so we'll move on to the next question. Again, this was, I think, addressed earlier regarding home broadband, regarding the decline or quarter-on-quarter decline in broadband. So that was already addressed in the presentation and the previous answers by Darius. The next set of questions come from Faith Therese Raagas of BPI. Well, questions on Mynt have already been addressed, so we'll just refer again to the question -- I mean, rather to the answers given out earlier. Maybe the only question maybe that we can ask Martha and Tek is, "GCash is now being used by 48 million Filipinos."

51 million, Jomari.

Yes. "What do you foresee as a penetration rate by end of next year?"

Martha, do you want to go ahead? Or do you want me to...

Sure, answer it.

I think let me put it this way, we also did not forecast 51 million Filipinos by November, okay? But as you know, there's over 110 million Filipinos, and there's still a good proportion of them out there without access to financial services. There's also the young ones, who today are not yet part of that whole ecosystem that probably to sort of cement financial inclusion in their lives and financial education, they should be starting early. So that's another cohort that we can -- we'll be going after. And you will see, I think, a very nice increase again on top of the 51 million active -- not active, but registered users in the country today.

Okay. Thank you, Ernest and Darius. So next question, again, it comes from Arthur Pineda of Citi. "Why is Globe partnering with ST Telemedia and not Singtel, which has stated an intention to drive up its data center footprint in ASEAN?"

Well, maybe I can answer that, Jomari. The process with ST Telemedia and other potential partners, JV partners, started probably 6 to 9 months ago, way before the Singtel announcement of its intention to participate in the data center industry in the ASEAN. What I can say is that despite that announcement, Singtel has given their full support to Globe management to pursue the JVs that we have started discussions with. And we can take a look down the line if there's a role for our principal to play in the JVs that we put together. But for us, the partner right now that we're going to close to deal with is ST Telemedia. And moving forward, we will put all of our attention into building the data center JV with them.

Okay. Thank you, Ernest. Next set of questions come from Liew Shan Khiun of Principal Asset Management Berhad. "On wired broadband, how is the migration of copper to fiber? How many copper users are left? Shall we expect much higher net adds for fiber next year?"

Okay. So again, we cannot disclose most of the details. But at the minimum, to date, our third quarter wired base migration grew 15% versus the previous quarter in terms of total volumes. And we will not stop and continue further ramping up until we are able to migrate all of our ADSL customers by year-end, so we give the best experience to our customers as soon as possible. So in addition, from 31% of the total customer base during the same period last year, ADSL now just comprises 9% of the base in Q3. So our migration efforts have really gained much-needed velocity.

Thanks, Darius. Next 2 are questions regarding GCash. The first question is, can Mynt please -- "Can the Mynt team please share more color in GLife? How much is the latest run rate GTV from GLife? And what are the biggest categories?"

Well, we don't have that information. We don't disclose it, the run rate. But what what's happening is it's very reflective of the industry sizes of these various categories. So we are in step with the sizes of the different industries that we carry inside GLife.

Okay. Thank you, Martha. And third question also pertains to GCash. "Can you please share more color on the loan disbursement from GCash? How much is the latest run rate loan disbursement from GCash?"

So we've disbursed PHP 21 billion of GCredit live to date running at over PHP 1 billion a month and growing. GLoan is a relatively new product, though we are encouraged by early statistics. In fact, we've found that NPL is -- what do you call this, the stats that we have are actually best in class, early indicators and repayment specifically. Our position as a platform player gives us the opportunity to continue to collaborate with other financial institution, so they can offer their products to our 51 million and growing digitally savvy user base. So even without the digital banking license, we have a lending license. We're already able to offer a full suite of lending services and other financial services like savings, investment, insurance. On the lending, we do a hybrid, so we partner with banks like CIMB, and we also originate our own loans like the ones for GLoan and soon-to-be-launched BNPL. This makes it accessible, affordable and easy to understand for all Filipinos.

Okay. Thank you, Martha. Actually, I think that also answers the next follow-up questions from Liew Shan as well pertaining to, "How does GCash position itself, given more digital banks are coming? And is Mynt looking to onboard more digital banks as partners?"

Yes. Our philosophy for now is because of the huge mission tasked to -- of financial inclusion, it requires more than one entity to get to that. So we prefer to collaborate than compete with the banks.

Okay. Thank you, Martha. The next question comes from Jolyon Loo of Sixteenth Street Capital. "What is the difference between GCredit, GLoan and BNPL?"

Okay. So GCredit is a closed-loop loan that -- closed-loop credit that runs for like 30 days and then -- so that's the construct. You buy from a certain vendor or certain supplier, and then you can use your GCredit for that. GLoan gives you cash loan. It's like a cash loan that you can pay over an extended period of time, like 12 months. BNPL is a closed-loop installment loan.

Okay. Thank you, Martha, and thank you for your patience answering all of these questions on Mynt. Well, again, we wish to thank all the analysts and investors who have sent in their questions. But like we said, we have given all of you a maximum of 3 questions, and for any other additional questions, we'll try to address them as soon as we finish all of the advanced questions. But given that we are running out of time, I will just answer the rest of those questions via e-mail. Again, thank you very much. Before we conclude -- well, this concludes the Q&A portion. Perhaps we can ask Ernest for any parting words.

No, I just want to say thanks for everyone attending. I think you guys are seeing what is the probably a good way into the digital transformation of Globe into a platform for digital businesses. We talked about Mynt. We talked about our core telco business, which is continuing to be healthy. We talked about ICT. And in the future, you will hear us talk more about our businesses that are already scaling with regard to health, advertising and the like. So once again, thank you very much for your interest, and I'm glad to see so many people in the audience today. Thank you so much.

Okay. Thank you, Ernest. And on that note, we conclude the virtual Third Quarter 2020 Analyst Briefing of Globe Telecom. I wish to thank you, again, all of you for joining the call. We hope you'll join us again for our fourth quarter 2021 analyst briefing in early February 2022. Again, we wish everyone a pleasant good afternoon. Stay safe, everyone. Bye.

Thank you. Goodbye.

Thank you.