{"id":323676,"date":"2023-06-15T00:04:00","date_gmt":"2023-06-14T16:04:00","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=323676"},"modified":"2023-06-14T23:20:09","modified_gmt":"2023-06-14T15:20:09","slug":"stock-in-focus-globe-telecom-glo-15-june-2023-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-globe-telecom-glo-15-june-2023-by-ap-securities\/","title":{"rendered":"Stock in Focus: Globe Telecom (GLO) – 15 June 2023 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>GLO<\/td><\/tr>
Company Name<\/strong><\/td>Globe Telecom<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>15 June 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Hold<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 2,193.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Expanding into the prepaid mass market would come at the price of lowering GLO’s average revenue per unit (ARPU), a key metric used to measure a telco\u2019s profitability. We currently have a HOLD recommendatio on GLO with Target Price of P2,193.00 per share<\/strong>.<\/p>\n\n\n\n

<\/div>\n\n\n\n

Analysis and Opinion<\/h2>\n\n\n\n

GLO launches GFiber Prepaid<\/strong><\/p>\n\n\n\n

Globe Telecom (GLO) has rolled out its latest offering, GFiber Prepaid, which targets the mass market segment. GFiber Prepaid is priced with an initial one-time fee of P1,499 which includes installation and seven days of unlimited internet. It comes with no lock-up period and users can use the \u201cbuy now pay later option\u201d on GCash to pay for the service. Users can choose from a variety of unlimited internet promos at different price points, ranging from P299 for seven days to P999 for 30 days. This undercuts GLO\u2019s own postpaid unlimited fiber plans, which has its lowest price point at P1,699 per month.<\/p>\n\n\n\n

Head-to-head with CNVRG\u2019s Surf2Sawa<\/strong><\/p>\n\n\n\n

Fiber disruptor Converge ICT Solutions (CNVRG) has also thrown its hat into the prepaid ring, announcing that it will soon roll out its Surf2Sawa (S2S) prepaid fiber offering after a soft launch late last year. S2S is priced at lower price points than GFiber Prepaid, with offerings ranging from P200 for seven days to P700 for 30 days. As of the end of Q1 2023, S2S has already gained traction and has nearly 30,000 subscribers, with a net add of 14,000 subscribers in Q1 alone. CNVRG is targeting for S2S to reach 120,000 subscribers by year-end and one million subscribers by 2025.<\/p>\n\n\n\n

Good for consumers, bad for the companies<\/strong><\/p>\n\n\n\n

This latest battlefront in the fiber price wars is obviously good for consumers, especially for lower income families who need internet connectivity but who might see P1,500 per month as too steep of a price to pay. According to CNVRG\u2019s Analyst Briefing presentation materials in Q1 2023, around 40% of its addressable market falls within this category of households for whom P1,500 represents 6-12% of their monthly income. Being able to tap this market would help increase the subscriber counts of GLO and CNVRG, as the postpaid fiber market nears its saturation point. <\/p>\n\n\n\n

However, expanding into the prepaid mass market would come at the price of lowering its average revenue per unit (ARPU). For reference, CNVRG\u2019s ARPU has been steadily trending lower and was reported to be at P1,209 in Q1 2023. GLO does not provide stand-alone ARPU for its fiber segment. So far, the other telco giant (TEL) has been sitting this one out and has not yet announced plans to enter the prepaid space, but we can expect the prepaid price wars to heat up further once it does.<\/p>\n\n\n\n

<\/div>\n\n\n\n

Check how many brokers recommend this stock<\/h2>\n\n\n\n
\n
All Stock Rankings<\/a><\/blockquote>