formerly GMCR, Inc. - Globe

Wireline communication service revenues consist of: (1) monthly service fees including
currency exchange rate adjusments (CERA); (2) installation charges and other one-time fees
associated with the establishment of the service; (3) revenues from international and national
long distance calls made by wireline and payphone customers, net of interconnection fees to
other carriers and transfer pricing charge to carrier services; (4) Globe’s share on payphone
revenues from local calls; and (5) revenues from value-added services.
Wireline voice net operating revenues increased by P=259.2 million or 14.5% to P=2,053.0
million in 2000 from P=1,793.8 million in 1999. The rise in wireline net operating revenues is
attributed to the significant increase in revenues from national long distance and payphone
services, offsetting the drop in international long distance services (ILD) revenues, resulting
from the continuing decline in international settlement rates. Wireline voice subscribers
increased by 12.5% to 157,582 as of 31 December 2000, from 140,130 as of 31 December
1999. As of 31 December 2000 business subscribers were 27.2% of total subscribers from
22.6% as of 31 December 1999. In 2000, the average churn rate was 1.6% per month
compared to 2.7% per month in 1999. Globe’s disconnection policy is to permanently
terminate subscribers with unsettled bills 115 days for residential subscribers and 155 days
for business subscribers from statement date. We make full allowance for accounts of
residential and business subscribers that are 90 and 150 days past due, respectively.
Wireline voice interconnection expenses to other carriers declined to 28.4% of gross wireline
voice service revenues in 2000, from 34.9% in 1999, primarily due to the decline in the
International Gateway Facility-Local Exchange Carrier access charge from US$0.17 to
US$0.125 beginning March 2000.
Wireline Services – Data
Globe offers nationwide wireline data, consisting of international and domestic leased lines,
telex, Internet and other wholesale transport services, through a variety of brands. Wireline
data net operating revenues consist of billings for these services net of the share of other
carriers for the telex service. Wireline data net operating revenues increased by P=235.0
million or 42.1% to P=793.5 million in 2000 from P=558.5 million in 1999, mainly reflecting
increased growth in the number of active leased line customers and increases in internet
service revenues.
Revenues from international leased lines increased 28.8% to P=280.0 million in 2000 from
P=217.4 million in 1999. The number of circuits for international leased lines as of 31
December 2000 increased by 26.0% to 63 circuits from 50 circuits as of 31 December 1999.
The estimated monthly revenue per line for international leased lines declined 8.3% to
US$8,530 in 2000 from US$9,306 in 1999.
Revenues generated from domestic leased lines also increased 21.1% to P=275.7 million in
2000 from P=227.7 million in 1999. The total number of circuits increased 59.7% to 923 as
of 31 December 2000 from 578 circuits as of 31 December 1999. This translates to a
monthly revenue per circuit of US$573 in 2000, 32.0% lower than US$843 posted in 1999.
Globe provides internet access to subscribers nationwide under the GlobeNet brand name.
These services range from basic internet access for dial-up accounts to integrated business
solutions for dedicated leased line subscribers such as corporate customers and internet
service providers. In 2000, revenues from internet services increased 170.4% to P=210.4
million from P=77.8 million in 1999. The number of dial-up customers increased 17.2% to
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