The Transformation of Globe Telecom PDF
The Transformation of Globe Telecom PDF
12-2018
Christopher DULA
Singapore Management University, [email protected]
Philip ZERRILLO
Singapore Management University, [email protected]
Citation
JOSHI, Havovi; DULA, Christopher; and ZERRILLO, Philip. The transformation of Globe Telecom. (2018). Asian Management
Insights. 5, (2), 52-58. Research Collection Lee Kong Chian School Of Business.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/6206
This Magazine Article is brought to you for free and open access by the Lee Kong Chian School of Business at Institutional Knowledge at Singapore
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of Institutional Knowledge at Singapore Management University. For more information, please email [email protected].
EXECUTIVE BRIEF
Redefining telecommunications
in the Philippines.
By Havovi Joshi, Christopher Dula and Philip Zerrillo
G
THE TRANSFORMATION
lobe Telecom—a major telecommunications service provider in the Philippines—had a long,
pioneering history in the communications business. Incorporated in 1935, it was the first
international wireless communications company connecting the Philippines to the rest of
the world. Years later, in 1994, Globe would become the first company in the country offering
mobile subscription-based services.
OF GLOBE TELECOM
By 2018, more than half of the Philippines’ 100 million residents were Globe customers,
with the company as the market leader in both postpaid and prepaid segments. Service revenues
were up nine percent from over a year ago. For an industry that was only growing by two to
three percent, it meant that Globe was chipping revenue out of the competition. The results
were so impressive that Citi, in its 2nd Quarter 2018 Results Report, noted, “Globe hands down
delivered the best performance amongst the ASEAN telcos in 2Q…”
But the company was not always so well-positioned. Despite its first-mover advantage,
Globe had found its market share steadily eroding, and by 2010, its market share had shrunk
from 42 percent to 33 percent in just under six years. Morale within the company was at an
all-time low, and the workplace had become toxic. Globe was clearly failing in the execution of
its strategies, and also did not appear to have the right capabilities to conceive effective ones.
From these depths, how did the Globe leadership team succeed in dramatically turning
the company around? What did they do to grow beyond the traditional telco business model and
transform every aspect of the company to become a provider of digital lifestyle, the prized
market leader and an iconic brand in the Philippines today?
The years 2004 to 2010 saw a steady decline of Globe’s market share. To NeTwork prepaid model. In order for this to draws the customer to our service more
make matters worse, in 2011, PLDT acquired Sun Cellular, resulting in The senior leadership at Globe mulled ‘The Transformation work, a telco needs to be able to than other brands.”
the former controlling almost 70 percent of the subscriber base. In the era of over how to address its ageing House’ was Globe’s track, in real time, millions of different
calls and texts, it was simply too hard to break the ‘calling circle’. infrastructure. On the one hand, they answer to meeting the account-linked devices. The mobile phone TaleNT aNd CulTure
Having determined that the company was desperately in need of a transformation, could focus on simply expanding competition head-on was in effect a wallet; when a customer With the transformation of its IT
and that the country was on the cusp of a new wave—the coming of smartphones coverage with the existing network and responded to an SMS promotion offering business and operating systems,
—a framework to
and data—redefining the company had everything to do with the next phase. incrementally upgrading or augmenting five hours of talk or data, Globe needed Globe was able to innovate and create
systematically address
the equipment. On the other, they could to be able to deduct that from the products faster, be first to market and
take it all down and replace it. The
these challenges by
The Transformation House account and track usage 24/7. change the whole customer experience
The Globe leadership team recognised that it would need to transform its commercial leadership team decided on the latter, focusing on three Ultimately, Globe invested more from a utility to a customer-centric
offerings if it was to survive—not only that, it also needed to position itself anew at a cost of a billion US dollars. This was pillars: Network; than US$400 million into its IT systems— brand of service. However, all of this
to stay abreast of, or at least keep pace with, other players. underwritten by the Ayala Corporation, IT and Systems; with capabilities beyond just billing and required putting the customer first and
Globe’s network was a generation or so behind the competition’s technology. the oldest and largest conglomerate in Talent and Culture. business support. Customer analytics transitioning out of a ‘utility’ mindset.
The company was saddled by legacy IT systems, prohibiting it from offering new the Philippines (which had a 30 percent and usage tracking allowed Globe to gain It had to be ingrained in the company’s
in-demand products and services without significant investment; a hard sell to stake in Globe); and the Singtel group of valuable insights into where, when, and DNA, its mission, vision, and values—
investors already wary of past performance. companies, one of the largest telecom itself given the 7,000-plus islands that how customers were using their phones. the ‘Globe Way’.
Spearheaded by Ernest Cu, who had joined Globe in 2008 as the Deputy CEO groups in Southeast Asia (with a constituted the Philippines; a major This capability was a key competitive The ‘I Love Globe’ campaign
and subsequently became President and CEO in 2009, ‘The Transformation House’ 40 percent stake in Globe). differentiation point from its competitors, advantage in understanding, anticipating, redefined Globe around 10 service
was Globe’s answer to meeting the competition head-on—a framework to At such a high price tag, the which tended to be more concentrated and delivering on customer needs. commitments that were shared across
systematically address these challenges by focusing on three pillars: Network; IT investment needed to be more than a in major population centres. Cu explained, “We compete on the entire organisation. To put
and Systems; Talent and Culture. Investment into these pillars proved essential one-time fix. Cu described this move, product, marketing and quality of customers first meant to continuously
to transforming Globe’s commercial offerings into an ever-growing array of “It is almost like changing the engines, IT aNd SySTemS network as opposed to price. Globe has engage with them, and to see them
sophisticated products and services supported by high-tech capabilities and the wings and navigation system of a IT business and operating systems are never been a price leader. We believe as more than subscribers. This mindset
entrepreneurial competencies. commercial airplane at the same time— complicated. Take for example, the that the combination of the things we do had to be pervasive. For leadership
while in flight and carrying passengers.”
In 2010, Cu decided to adopt a
single vendor policy, an unprecedented
globe’s TRANsFoRMATIoN JoURNeY move in the industry at that time.
Previously, Globe relied on four different
equipment and infrastructure suppliers,
Cisco, Nokia, Ericsson, and One Way.
Under the new policy, Globe and its
new vendor-partner were better able
Commercial to manage the modernisation effort,
Transformation which began in 2011. This relationship
would also make continued maintenance
and improvement of the network more
efficient and cost-effective.
It was a prudent move. Halfway
IT & Talent &
Network
Systems Culture
through the modernisation programme,
Globe recalibrated from a 3G to a
4G LTE network in response to
growing consumer appetite for data-
hungry apps, and cheaper, next-
Cost Transformation
generation smartphones.
Globe also continued to expand
its coverage area, a feat in-and-of
56 Vol.5 / Asian Management Insights
and management, it also meant continuous engagement with at its core, this goal in some ways missed the great opportunity.
employees. By better knowing and understanding the needs To elaborate, while most retailers were trying to get people TeAMINg Up wITh globAl bRANds
and aspirations of both customers and employees, Globe into their stores, here was Globe trying to get them to leave!
would be more able to satisfy those desires. This meant The management quickly realised that while in the store,
becoming more than a telco, and in 2013, the company customers wanted to try new technology, talk with consultants
redefined its Service Commitments to enhance clarity on about the products, and get a quick update on the latest
how the company would engage with its customers (refer to and greatest. Hence, while the first generation stores had may 2015 - Present
aug 2014 - Present Turner
Globe -
Figure 1). plastic dummy phones that frustrated would-be shoppers Google Play HOOQ Clash of Clans Cartoon Network Anything
Globe’s reimagined, redesigned stores were a case waiting for their turn in line—today, the third generation Google Facebook iTunes Niantic Cartoon Network
in point. Initially, they resembled something more akin to a stores are built around experience zones designed to showcase Wattpad Grab YouTube Tribe
Smule
business or service centre where customers would visit to technology, merchandise and integrated service offerings.
pay bills and report problems, rather than a place to browse The slick, redesigned retail outlets are now state-of-the-art 2012 2014 2015 2016
and experience the new technologies being offered. Long lines and very attractive showrooms where potential customers Viber Spotify Lazada Disney Interactive Sports Illustrated
and a ticket queue system that kept customers waiting was can experience the digital lifestyle Globe had to offer. Jul 2013 - Present apr 2014 - Present WhatsApp Windows Phone Netflix
Zalora Disney WATCH Disney Channel
a poor brew as unhappy customers had been running into The Globe leadership team thus did not stick to the
NBA Game Time WATCH Disney Junior
employees with low morale—which was certainly not reflective current practices, but became highly innovative. They would
Nov 2014 - Present WATCH Disney XD
of the aspirations of the Filipinos. break the ‘rules’ because they thought that it was the right thing
As management began to reimagine the retail points of to do for their customers and employees. Globe received the
contact, there was an immediate desire to reduce waiting time Gold Stevie Award in 2018 as ‘The World’s Employer of the
as a first step to improve service and empower employees. But Year in the Telecommunications Industry.’ In the same year,
FIGURE 2 Source: Globe Telecom
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Globe’s endeavour to bring Filipino talent to the world Today Globe is a market leader, a far cry from its position Chugai Pharmaceutical Co., Ltd. Microsoft of Korea Singapore Management University
stage does not stop at film. The company also aims to support in 2010. A mere challenger has overtaken the incumbent— C
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Curriculum that covers the latest trends Innovations Generator (BIG)
Christopher Dula in business management
is a freelance writer at the Centre for Management Practice,
Globe has attempted to stimulate Singapore Management University
Felicia Tan Wen Min Isabelle Lim Geraldine Tan Winston Chan
local content production by Philip Zerrillo
MM, Class of 2014
Associate, Enforcement
MCM, Class of 2016
Director of
MHCL, Class of 2017
Regional HR Director,
MI, Class of 2017
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Department (Legal Unit), Corporate Communications, APAC Chr. Hansen, FT Consulting Pte Ltd
collaborating with other film is Executive Director of the Centre for Management Practice, Monetary Authority of Singapore L’Oreal Singapore Singapore Pte Ltd
Singapore Management University
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Reference
Filipino content for national and 1
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worldwide distribution. TV content via the internet, without requiring users to subscribe to a Visit business.smu.edu.sg to start your development today.
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1 2018 FT Executive MBA Ranking
2 2018 FT Masters in Finance Post-Experience Ranking
3 2018 FT Masters in Finance Pre-Experience Ranking
4 2017 FT Masters in Management Ranking
5 2018 FT Global MBA Ranking
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