The Ayala Group’s Globe Telecom expects to complete by the end of 2024 its landmark tower sale and leaseback deal which is seen to generate a total of P96.3 billion. 

"We are aiming to complete 100 percent of our tower sale by this year. However, even if we only reach about 92 percent by December, we will still be on track, considering that the fourth tranche of our tower sale came six months after the first three transactions," said Globe Chief Finance Officer Rizza Maniego-Eala.

As of July this year, 88 percent of the towers in the portfolio have been officially transferred to the tower companies, generating around P85.2 billion in gross proceeds. 

Globe said this significant financial inflow is expected to support Globe's strategic initiatives and further strengthen its financial position.

Globe President and CEO Ernest Cu said “We believe in the concept that shared tower cost and shared tower build reduces the capex requirements for the telcos. 

“We hope that with the reduced capex requirement, we’ll be able to collectively put up more towers between the towercos and us."

With the tower sale almost completed, Globe's financial outlook remains optimistic. "Our free cash flow after interest payments for the second quarter of 2024 already entered positive territory, which included proceeds from our tower sale initiative,” said Maniego-Eala.

She added that, “We expect the momentum coming from strong operating cash flows to continue through to next year, driven by both top-line growth and our efforts on cost and investment optimization. This positions us to continue posting free cash flow positive results in 2025, even without one-offs.”

As part of Globe’s strategy to optimize capital deployment, the company slowed down its capital expenditures (capex) investment by 25 percent in the first six months of the year, aligned with its goal to achieve positive cash flow by 2025.

To achieve sustainable free cash flow, Globe invested P23.8 billion in capex in the first half of 2024, a 25 percent drop from 2023, consistent with its capex guidance of $1 billion this year as part of its sustainable capex spending strategy.

This capex investment, equivalent to just 34 percent of Globe’s topline, marks a significant decrease from the 44 percent Capex-to-revenue ratio recorded in 2023. Globe aims to return to the industry’s average levels, targeting a Capex-to-revenue ratio of 30 percent to 35 percent for the year.

The tower sale, which started in 2022, has seen significant progress throughout 2024. Globe successfully transferred an additional 48 towers to Phil-Tower Consortium, Inc. (PhilTower) on June 21, for approximately P710 million.

On June 28, Globe handed over 140 towers to Miescor Infrastructure Development Corporation (MIDC) for P1.68 billion. Simultaneously, 187 towers were transferred to Frontier Towers for approximately P2.38 billion.

By July 23, Globe completed the transfer of the last batch of 1,037 sites to Frontier Towers for P13.17 billion, marking the full completion of its Tower Sale and Leaseback Deal with the company.