The Philippines still struggles with getting landlines to many of its residents. This is a challenge not only for Globe Telecom, but also for the Philippine telecommunications sector as a whole. It is going to take additional work by all of the telecommunications firms and the Philippine government to address this problem adequately.

The Philippines are still in the midst of an economic slow down that hit all of Asia during the decade of the 1990s. This Asian Flu has devalued the Philippine Peso by over 50% in the course of five years. The unemployment rate still hovers around 10%, and the average income is only US$3,800 per year. This sort of economic environment is challenging for any company to exist in, let alone succeed in. It is interesting to note that even the recent September 11, 2001, World Trade Center tragedy made it into Globe Telecoms third-quarter 2001 report as a negative economic effect.

Another serious challenge Globe Telecom is facing is that of customer retention. As in the United States and much of the rest of the world, the cellular telecommunications firms are providing strong incentives to switch from competitors. As Globe Telecom seeks to maintain, and even grow, in this particular market, it needs to seek out new and innovative ways of maintaining customer loyalty and continue to market aggressively for new subscribers, either as competition converts or first-time cellular users. A recent story noted a major blow to Globe's cellular subscriber base when a long time contract with the Philippine government was not renewed. The new contract was awarded to Smart Communications, which as you might have guessed, is a wholly owned subsidiary of PLDT.

Related to both the hard economic times and customer retention, Globe Telecom faces an equally tough challenge in maintaining a quality revenue stream. Pricing structures in this competitive market are leading to narrower margins. While providing free text messaging is a huge benefit to its customers and a direct pressure to its competitors, it is not conducive to providing value to the shareholders. Globe Telecom needs to continue finding appropriate ways to maintain and grow its revenue stream. This will require a combination of new value-added product offerings as well as growing its subscription base.

Globe Telecom and other telecommunications companies within the Philippines need to continue various partnerships in building additional high quality, cost-effective networks across the country. They need to lessen their dependence on the PLDT network where they must share revenue. Seamless interconnection is necessary for subscribers from both sides; however, less reliance on PLDT will increase profits and enhance customer satisfaction.

Annals of Cases on Information Technology
SQL Tips & Techniques (Miscellaneous)
EAN: 2147483647
Year: 2005
Pages: 367 © 2008-2017.
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