ABS-CBN Corp. has severed network sharing ties with Globe Telecom, Inc. for its ABS-CBNmobile brand after its five-year agreement expired.
In a disclosure to the stock exchange on Monday, ABS-CBN said the financial status of its mobile business was the reason for the decision.
“After a thorough assessment, ABS-CBN Convergence deemed its current mobile business model to be financially unsustainable. As a result, ABS-CBN Convergence and Globe reached an agreement not to renew their mobile network sharing agreement and to look at more profitable opportunities in the content business,” it said.
With the termination of the contract, the Lopez-led company said its prepaid, postpaid and Sky Mobi subscribers may keep availing their services “until the final date that will be approved by the National Telecommunications Commission.”
ABS-CBN Chief Finance Officer Aldrin M. Cerrado said in April the company has “contained” its losses from the ABS-CBNmobile business in 2017. During the first quarter, the company saw its interconnection costs down 64% to P49 million from P81 million in the same period last year.
ABS-CBN signed a network sharing agreement with Globe in May 2013 to receive capacity and coverage from the telecommunication giant’s cellular network. “The parties may also share assets such as servers, towers, and switches,” it said in a regulatory filing.
Despite the decision to discontinue ABS-CBNmobile, the two companies have agreed to keep connections for the TVplus boxes, Kapamilya Box Office and iWant TV offers of ABS-CBN.
“ABS-CBN and Globe are exploring new ways and synergies that complement their business models,” the company said.
Mr. Cerrado previously said the direction of ABS-CBN this year is to focus on its digital terrestrial television (DTT) business, broadband services through Sky Broadband, direct-to-home (DTH) business and international markets
In a statement in early July, ABS-CBN said it has sold five million digital boxes nationwide in May from when it was launched in 2015, inching closer to its goal of selling six million units by the end of the year.
ABS-CBN posted a 7% increase in attributable net income at P452.53 million during the first quarter. It was driven by lower gross expenses tempering the decline in advertising revenues.
Video ABSCBN and Globe Partnership