MULTIMEDIA conglomerate ABS-CBN Corp. has decided not to extend its network sharing agreement with Globe Telecom Inc. after five years of operations as the business model was deemed to be financially unviable.
In a statement, the Lopez-led company said the company has reviewed its options on its multibillion-peso investment in its mobile brand, ABS-CBNmobile, and has concluded that the business was not profitable.
“After a thorough assessment, ABS-CBN Convergence deemed its current mobile business model to be financially unsustainable,” the statement read.
The company invested P3 billion to create the mobile brand through the network sharing agreement between Globe and ABS-CBN Convergence.
The service was introduced in 2013 and gained traction two years after, when it reached 1.7 million subscribers with an average revenue per user of P65.
Company officials have repeatedly expressed confidence in the wireless business, saying that it should have hit breakeven sometime in 2015. However, it failed to stimulate usage within the network. Its main business proposition is, beyond calls and texts, subscribers will have access to content created by the television network.
By 2018 company officials have been quoted as saying that they are trying to “contain losses” from the mobile business, cutting down losses to P560 million in 2017, from P600 million the year prior.
“As a result, ABS-CBN Convergence and Globe reached an agreement not to renew their mobile network sharing agreement,” the company said.
The ABS-CBNmobile brand will be folded down on a date that will be decided by the National Telecommunications Commission (NTC), a company official said in a mobile phone reply.
The contract expired in June.
“The NTC needs to review and approve the date,” a company spokesman said. “Let’s wait for the review and approval.”
Nonetheless, the two groups are on the lookout for partnerships and synergies in the “content business,” which it described as “more profitable opportunities.”
“Leveraging on ABS-CBN’s expertise as top content provider to the Filipino audience and the vast reach of Globe as the leading telecommunications company, both companies have decided to shift their focus in maximizing synergies,” the statement read.
These product synergies include the promotional bundling of ABS-CBN TVplus boxes with Globe At Home prepaid WiFi and the availability of ABS-CBN TVplus’s KBO (Kapamilya Box Office) and iWant TV over-the-top services to all Globe subscribers, which are already commercially available.
Shares in ABS-CBN rose by 2.25 percent to close at P24.95 apiece, while those in Globe inched up by 0.12 percent to end at P1,662 per share on Monday.
In a statement, the Lopez-led company said the company has reviewed its options on its multibillion-peso investment in its mobile brand, ABS-CBNmobile, and has concluded that the business was not profitable.
“After a thorough assessment, ABS-CBN Convergence deemed its current mobile business model to be financially unsustainable,” the statement read.
The company invested P3 billion to create the mobile brand through the network sharing agreement between Globe and ABS-CBN Convergence.
The service was introduced in 2013 and gained traction two years after, when it reached 1.7 million subscribers with an average revenue per user of P65.
Company officials have repeatedly expressed confidence in the wireless business, saying that it should have hit breakeven sometime in 2015. However, it failed to stimulate usage within the network. Its main business proposition is, beyond calls and texts, subscribers will have access to content created by the television network.
By 2018 company officials have been quoted as saying that they are trying to “contain losses” from the mobile business, cutting down losses to P560 million in 2017, from P600 million the year prior.
“As a result, ABS-CBN Convergence and Globe reached an agreement not to renew their mobile network sharing agreement,” the company said.
The ABS-CBNmobile brand will be folded down on a date that will be decided by the National Telecommunications Commission (NTC), a company official said in a mobile phone reply.
The contract expired in June.
“The NTC needs to review and approve the date,” a company spokesman said. “Let’s wait for the review and approval.”
Nonetheless, the two groups are on the lookout for partnerships and synergies in the “content business,” which it described as “more profitable opportunities.”
“Leveraging on ABS-CBN’s expertise as top content provider to the Filipino audience and the vast reach of Globe as the leading telecommunications company, both companies have decided to shift their focus in maximizing synergies,” the statement read.
These product synergies include the promotional bundling of ABS-CBN TVplus boxes with Globe At Home prepaid WiFi and the availability of ABS-CBN TVplus’s KBO (Kapamilya Box Office) and iWant TV over-the-top services to all Globe subscribers, which are already commercially available.
Shares in ABS-CBN rose by 2.25 percent to close at P24.95 apiece, while those in Globe inched up by 0.12 percent to end at P1,662 per share on Monday.
