A - DEMI

Globe Telecom, Inc. (“the Company” or “GLO”) is a leading full-service telecommunications

provider in the Philippines established in 1928. On 11 August 1975, GLO went public on the
Philippine Stock Exchange (PSE) and eventually became one of the largest companies in the
Exchange in terms of market capitalization. GLO is engaged in the operation of mobile,
fixed-line, and broadband networks, catering to an extensive customer base ranging from
individuals to corporate and enterprise clients. With its years of industry experience, GLO has
successfully established itself as the Filipinos’ preferred brand for digital lifestyle choices by
pioneering telecommunications and technological advancements.

Leading full-service telecommunications provider

The company’s strengths lie in its mobile business, which comprises 77.4% of its 2019A
revenues. GLO has a combined 95% nationwide coverage for its Second Generation (2G),
Third Generation (3G), and Fourth Generation (4G) or Long-Term Evolution (LTE) networks and
holds over 45.8% of the 22,405 cell sites in the country as of November 2020 (Figure 5).
Utilizing its vast network coverage, GLO has been able to catch up in the home broadband
space to become the market leader with a 46.0% share as of 3Q2020A (up by 5.7 percentage
points from end-2019), through its strategic focus on prepaid wireless services.

B - TINE/DEMI

Production
● Interest rate risk - To be able to fund their operations, GLO entered various short and
long-term debt obligations which exposes them to interest rate risk, with a greater long
term debt exposure (Php 155.8 billion vs. Php 7.9 billion loans as of 2020 Q3). Interest
rate risks are managed using targeted levels of fixed and floating rate debt that are
meant to achieve a balance between cost and volatility.
● Execution risk - We identify execution risk for GLO, particularly for its fiber rollout.
Operation
● Disruption in Operations - Fortuitous events such as the COVID-19 outbreak can
disrupt the supply chain of GLO.
● Regulatory Risks - The Senate Bill No. 1831 demands telco companies to pay a
maximum fine of Php2.0Mn (per day) should they fail to improve and deliver the
mandated internet speed. As such, this may put a strain on GLO’s cash flows as they
may become exposed to increasing service penalties.
Technology
● Delays in Network Rollout - GLO may face delays in its infrastructure upgrade and
expansion plan due to the pandemic.
Sales
 ● Competition - Under DITO’s CPCN, it is stated that DITO is expecting to provide 27
mbps of internet speed. Competition is also expected to intensify in the medium term as
DITO expands coverage.
● Slow Recovery - We note that the recovery of GLO’s mobile revenues may be
hampered by weaker-than-expected demand, which will likely be caused by prolonged
weakness in economic conditions.
Marketing
● Demand Risk - GLO failure to meet the innovations demands of its customers resulting
in shifting to another Telecom provider.
● Price risk - We believe that this could discourage companies from investing because
there is a risk of a price war if multiple tower firms operate in the same area.
Human Resource
● Onboarding tactics that are ineffective or non-existent - Onboarding impacts
retention, which in turn affects recruitment.
● Competitive risk - Aggressive corporate strategy slightly offsets competition risk
Products/Services
● Uncertainty on Production - GLO has consistently been the first to roll out new
technologies such as 4g and 5g. In June 2019, GLO joined global telecom leaders by
being the first in Southeast Asia to commercially introduce 5g fixed-wireless home
broadband service in the Philippines. However, since 5g is relatively new, the return for
this investment is still uncertain.
● Strain on the network - With people shifting their activities online, there is a higher
demand for home broadband connectivity. While this can increase GLO’s revenues,
higher data traffic can put a strain on GLO’s network, as GLO primarily serves
fixed-wireless customers.

C - DEZZA
RISK MANAGEMENT PROCESS OF THE COMPANY

GLO has a strong risk management charter anchored on governance, processes, and culture.
Effective Risk Management (RM) processes, according to Globe Telecom, are critical to the
company's profitability and durability. As a result, Globe makes sure that RM remains a
fundamental skill and an important component of how the company makes choices in order to
create value to shareholders.

At the enterprise and operational levels, GLO tries to maintain strong processes that assist risk
identification, assessment, quantification, mitigation, management, monitoring, and
communication. GLO also benchmark against industry and worldwide best practices to verify
that our RM procedures and policies are robust and relevant.

The RM cycle at Globe begins with the Management Team conducting an enterprise-wide risk
assessment as part of the annual planning and budgeting process. At the corporate and
business unit levels, this process begins with the identification of major risks that jeopardize the
attainment of Globe's commercial and strategic objectives. Risks are then identified, examined,
and evaluated before being assigned to the appropriate risk owner(s) for the creation of risk
management plans. The results are then submitted to and reviewed by the Board of Directors
through the Board Risk Oversight Committee.

As part of the company's ongoing promotion of embedding the RM discipline across the
organization, the created strategies and mitigation plans to handle the risks are regularly
produced, updated, enhanced, and reviewed for effectiveness throughout the year. Globe has
institutionalized a process to monitor the status of risks with their risk owners and how the said
risks impact the organization on an enterprise level through monitoring key risk indicators, key
performance indicators, status of mitigation plans, and identification of any emerging risks
through the Chief Risk Officer (CRO) and Enterprise Risk Management Department (ERMD) to
have an enterprise-wide view of both risks and their mitigation plans. The ERMD, in
collaboration with the risk owners, reports on the status of the risks to the CRO and
management on a regular basis, as well as to the board via the BROC and other board
committees on a periodic basis.

The ERMD also conducts several coordinated, end-to-end risk assessment studies on
recognized essential risk areas and emerging hazards throughout the year. These studies,
according to management, are critical for a robust RM process since they reinforce the lines of
defense while also giving useful insights into decision-making and risk management for Globe's
top enterprise-wide risks. When needed, the corporation seeks outside technical assistance
from third-party specialists to assist management and the board with their RM roles and
obligations.

D - GETTE
RISK STRATEGIES/ RISK REDUCTION CONTROLS/ RISK MITIGATION PER EXPOSURE
CITED
Industry Risk 1 | Threat of New Entrant
GLO is subject to considerable risks, which are heavily reliant on the performance of the third
telco, DITO, in 2021. DITO will have two effects on GLO: (1) a market share grab that will
restrict GLO's top line growth prospects, and (2) a price war in the mobile segment that would
effectively limit GLO's margin expansion. While DITO poses a danger, its impact on GLO is
limited in the medium term because of its low 37 percent estimated first-year coverage, even
when using shared towers. GLO is expected to maintain a 51 percent market share in 2021F,
with a modest fall to 43 percent by 2025F. Between DITO's aggressive estimate of 30% and the
16 percent historical market share that Sun Cellular was able to acquire previous to its
acquisition by TEL, our base case scenario assumes DITO will be able to achieve a 20% market
share by 2025F.
Industry Risk 2 | Lower Barriers to Entry
Due to the pandemic's urgent demand for better digital infrastructure and connection, the
government has been lowering entrance barriers by (1) eliminating red tape to expedite
infrastructure rollout and (2) encouraging infrastructure sharing to promote accessibility. New
entrants may be able to develop more quickly as a result of the loosened regulations and the
implementation of mobile number portability, posing a challenge to the business. GLO, on the
other hand, has taken advantage of these rules by pledging to create 2,000 cells.
sites in the year 2021 With the use of shared towers, GLO is also expanding its coverage in
unserved areas.

Industry Risk 3 | Slow Economic Recovery

Subscribers working and studying from home are depending increasingly on broadband
internet, resulting in a fall in GLO's mobile subscribers. If lockdowns continue, this pattern is
likely to continue. However, we think that if the lockdown restrictions are released and vaccines
are available in 2021, users will once again rely on mobile services. Meanwhile, GLO has been
aggressively selling its home broadband offerings, which are tailored to meet the demands of
households.

Industry Risk 4 | Rapid Shift in Consumer Preferences

GLO is reliant on its customers' digital lifestyles, which are prone to abrupt alterations based on
the newest technology or popular cultural trends. If GLO fails to keep up with changing
consumer demands, it may lose market share to competitors. GLO, we feel, is constantly
investing in research to track client preferences and innovate accordingly, as evidenced by its
latest brand endorsers, K-pop sensation Blackpink. GLO has also had award-winning marketing
efforts that have aided in the strengthening of its brand.

Firm Risk 1 | Delays in Network Rollout

Due to the pandemic, GLO's infrastructure renovation and growth plans may be delayed. GLO,
on the other hand, demonstrates that this is not an issue, as it is on target to meet its goal of
installing 1,300 new cell sites and upgrading 10,876 existing cell sites to 4G/LTE. GLO has
contracted with five independent contractors to develop 900 more cell sites by 2021, allowing it
to complete full coverage on time. GLO is still working to improve its coverage and service for its
customers.

Firm Risk 2 | Increased Oversight from the Government

The government is putting a lot of pressure on GLO to enhance its services. Despite GLO's
efforts to upgrade its network and make its products more cheap, we believe the government
will continue to be a variable. Political support is a key factor in the telecoms industry, therefore
the forthcoming 2022 elections are a looming uncertainty. To mitigate this risk, GLO (1) invests
all-time high capex to provide world-class telecommunications services, and (2) discloses
service enhancements to the public with the highest transparency.
E - DEZZA/GETTE

CONCLUSION
Globe Telecom, Inc. is a telecommunications company that offers a variety of services. Digital
mobile communications, fixed line communications, and internet services are all available. It is
divided into two segments: Mobile Communication Services and Wireline Communication
Services. Risk management has a number of benefits. In this article, GLOBE's key stockholders
will strongly encouraged to expand their interests in the company. Such investors invest in their
specific assets by expanding their investments. These assets are viewed as tools that provide
improved prospects for gaining a proper and long-term competitive edge. As a result, it is
determined that a lack of adequate risk management may result in additional expenditures for
both the investor and the investee.

A wide range of internal and external risk variables have an impact on Globe's major business
objectives. Some of these risk factors are common to many industries, while others are
particular to the telecommunications business. The prevalence and severity of the dangers vary
greatly, and some are beyond the company's control. The Globe cited certain current investment
risks, such as the danger of new entrants, lower barriers to entry, slow economic recovery, quick
shifts in consumer tastes, delays in network installation, and more government control. The
current concern is the gradual economic recovery, which is resulting in an increase in
broadband internet users as more people work and study from home. If the restrictions are
lifted, people will most likely rely on mobile services again. This explains why, in the face of any
risk, not just this one, the Globe should not become complacent. Especially from what
happened during this pandemic where industries like Globe did not expect this tragedy to
happen.

In this analysis, the relationship between total risk management and the GLOBE’s
performance level is investigated. First, hypothesis testing demonstrates that there is a
substantial positive association between overall risk management and performance level as a
behavioral function. GLOBE can improve company performance by attempting to mitigate
negative conditions that arise as a result of risk exposure. Second, by investing in intellectual
capital and extending or creating certain precious, rare, distinctive, and unchangeable
resources, GLOBE will improve their performance and gain a competitive advantage.

Globe intends to manage these risks by implementing suitable risk management techniques,
building strong internal controls and capabilities, risk transfer methodologies (e.g., insurance
covers), and closely monitoring risks (including emerging risks) and mitigation plans.

F - LAHAT
RECOMMENDATION
TINE
The goal of the risk assessment is to generate a list of risks that GLO is currently facing or is
probable to face in the near future. This list should be recognized so that the most serious
threats will be addressed first or can be avoided to happen in the future. This assessment will
begin with a look at the company’s assets that are essential for providing and sustaining
network operations as well as delivering network services. Second, the assessment will take
into account the threats and vulnerabilities associated with the assets under consideration.
Finally, the outcomes of this assessment will be used to calculate the levels of risk that GLO
faces. These risk levels can be calculated by taking into account the potential impact on the
telecommunications organization if the risk of a risk event occurs.

DEZZA
Offer faster data rates - good for consumers, who enjoy greater choice of services; good for
governments and national competitiveness in their communications infrastructure and ability to
attract foreign direct investment and create jobs in diverse sectors; and good for industry, where
operators sell faster Internet connectivity to gain competitive edge and market share at higher
prices and, potentially, higher margin.

Changing the customer mind-set. Engineer a change in customers’ mind-set to reflect the real
and substantial contribution made by telecoms companies to the overall service experience.
require clear and consistent communication on the value of the network, and on what it takes to
provide high-quality services.

GLO should focus on customer service and product differentiation as an effective way to
compete in the market. To remain in a lead position going forward, even with the threats
associated with new entrants, operators need to adopt a mind-set geared toward collaboration,
which requires new partnerships and new business models. Otherwise, someone else will move
in and capture the value and operators will be relegated to the sidelines. They should have
access to in-depth data on telecommunications behavior.

GETTE

We recommend that any company should have a variety of backup plans in place for each
eventuality that may arise. This will allow them to better serve their consumers by preventing
them from wasting time and resources that may be better spent elsewhere. This will also allow
them to focus on resolving difficulties that their clients have with their service to provide them
with the level of service they deserve and encourage them to recommend their services to
others. Globe should also be mindful of their previous performance to prevent the issues that
they have already faced. As a result, Globe's performance will surely improve by continuing
monitoring themselves.