Makati City, May 9, 2003 -- Globe Telecom Inc., the Philippines' 
second-largest phone company, said yesterday robust growth in mobile 
subscribers fueled a 41 percent jump in quarterly earnings, confounding 
analysts' expectations of a market slowdown.

A 43 percent year-on-year leap in mobile users caught the market by 
surprise as the Filipinos' fondness for cellular phones and text messaging 
showed no signs of cooling.

"The momentum is still very strong," said Lloyd Ong, a telecoms credit 
analyst at Barclays Capital in Singapore.

"Maybe across the market, analysts are being overly cautious because the 
subscriber base has been growing so fast for the past few years and it is 
reasonable to expect some kind of pullback."

The results bode well for Philippine Long Distance Co. (PLDT), Globe's 
market-leading rival, which is scheduled to report strong earnings on May 
15 due to growth in its mobile operations.

Globe reported net income of two billion pesos ($38.5 million) for the 
quarter after stripping out a provision of P716 million for an investment 
in underwater cable company C2C Holdings by its wholly owned unit, Isla 
Communications (Islacom).

Globe - which is owned by Singapore Telecommunications Ltd., Philippine 
conglomerate Ayala Corp. and Germany's Deutsche Telekom AG - posted net 
income of P1.42 billion in the first three months of 2002.

Analysts had been looking for a profit of 1.8 billion to P2.3 billion.

Globe shares ended P15, or 2.6 percent, higher at P58 in reaction to the 
earnings results. The stock has rocketed 30.7 percent this year, far 
outperforming the 5.9 percent rise in the benchmark stock index but lagging 
the 47.2 percent surge in PLDT shares.

Revenues grew 24 percent year-on-year, free cash flow leapt 77 percent and 
the earnings before interest, tax, depreciation and amortization (EBITDA) 
margin improved to 59 percent from 56 percent, the company said.

About 19 percent of the nation's 82 million people own mobile phones, with 
industry watchers expecting the number to plateau at around 25 percent in 2005.

Analysts said much of the growth probably was coming from provincial areas 
where the penetration rate was low and from users upgrading handsets to 
take advantage of new technology.

The provision for Islacom's investment in C2C also surprised analysts but 
it was seen as a prudent move in the midst of weakness in the Asian 
submarine cable sector.

"The whole industry overall is unprofitable and it will be unable to turn 
around in the next 12 months or so," said Ong, who noted that other telcos 
in the region have made similar provisions. "Demand is growing but there is 
much more capacity and this is driving prices down." (Malaya)

Reported by: Sol Jose Vanzi

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