NextFin News - Globe Telecom is spending roughly $1 billion this year to stop being just a phone company, and the bet is already showing up in the one place that matters: its corporate data business. The Philippine carrier said it directed 91% of its 26.3 billion peso first-half capital budget into data-related infrastructure, a push that lifted corporate data revenue to a record 11 billion pesos in the six months through June, up 15% from a year earlier.
The move, announced September 24, is a deliberate pivot: Globe is selling the picks and shovels of the artificial-intelligence boom - data centers, cloud, cybersecurity and AI tools - to Philippine companies racing to expand across Southeast Asia after negotiations for the ASEAN Digital Economy Framework Agreement concluded in May. The question for investors is whether a telecom operator can be re-rated as digital infrastructure, or whether the market is right to keep treating it as a slow-growth utility priced for minutes and megabytes.
The Pivot: From Minutes and Megabytes to Data Centers
Globe is no longer hiding the direction of travel. President and Chief Executive Officer Carl Cruz framed the strategy plainly: a more connected ASEAN opens a bigger market for Philippine businesses, and Globe intends to be the connectivity and digital-capacity layer they build on. The company says it now has more than 260 AI use cases applied or under development across the organization, covering hyper-personalization, customer experience, intelligent networks and new products and services.
A more connected ASEAN opens a bigger market for Philippine businesses. Globe can help them get there by providing the connectivity and digital capabilities they need to grow, while also helping companies from across the region establish and expand their presence in the Philippines.
The numbers behind the pivot are concrete. Globe's capital expenditure in the first half of 2026 reached 26.3 billion pesos, with approximately 91% directed to data-related initiatives aimed at expanding network capacity and improving service quality. That follows a full-year 2026 capex target of around $1 billion, or roughly 59.3 billion pesos, set earlier this year. Core earnings are responding: first-quarter core net income rose 9% to 4.9 billion pesos, and EBITDA grew 7%, even as energy costs from the Middle East crisis pressured operating expenses.
The centerpiece of the infrastructure bet is data centers. Through ST Telemedia Global Data Centres Philippines - a joint venture with Ayala Corp. and ST Telemedia Global Data Centres - Globe operates nine data centers with a combined IT load of 146 megawatts, and is on track to exceed 30 megawatts of operational capacity by the end of 2026. The 124-megawatt STT Fairview mega-campus in Metro Manila is already seeing demand ahead of full buildout: the first level of data halls has been fully sold, with hyperscalers and AI tenants in active discussions for succeeding levels still being commissioned.
That demand is not theoretical. Cruz said in August that the company is having a hard time coping with demand for data centers and is working doubly hard to capture the growth. Nationwide data-center capacity remains below 200 megawatts, according to the Department of Information and Communications Technology - a tight market for a country of more than 112 million people.
Why This Is Structural, Not Cyclical
The most important question investors should ask is whether this is a cyclical upswing in tech spending or a durable regime change. The evidence points to structural.
A cyclical telecom recovery would look like higher mobile usage, more subscribers, or a temporary lift in enterprise spending that fades when budgets tighten. What Globe is building does not revert on its own. Data centers are long-lived, power- and land-intensive assets with multi-year tenant contracts. Once a hyperscaler or AI company places its workloads in a facility, migration costs create stickiness that voice and text never had. The revenue model shifts from per-minute and per-gigabyte commoditized pricing to contracted, capacity-based infrastructure rents.
The demand math supports that. Market strategist Joel de la Pena of H.E. Bennett Securities cites estimates that Philippine colocation demand could more than triple to 155 megawatts by 2030, implying a 28% compound annual growth rate. The country remains underpenetrated, with data-center capacity of only 0.8 megawatts per million people, compared with 1.4 megawatts in Indonesia and 1.9 megawatts in Thailand. That gap is a structural shortfall, not a cyclical dip - it closes only with years of sustained construction.
There is also a policy floor. The ASEAN Digital Economy Framework Agreement, whose negotiations concluded in May 2026, is designed to facilitate cross-border digital trade, data flows, electronic payments, personal-data protection and cybersecurity cooperation. If ratified and implemented, it lowers the friction for Philippine firms to sell digitally across the region and for regional firms to enter the Philippines - both directions require the exact infrastructure Globe is building. A trade framework does not reverse in a quarter.
The second leg of the structural case sits beside the data centers: GCash. Globe's stake in Mynt, the operator of the country's leading e-wallet, gives it exposure to digital payments, lending, insurance and investment services. In June, Globe approved filing a registration statement with the Philippine Securities and Exchange Commission and a listing application with the Philippine Stock Exchange for Mynt. The offering aims to raise around $1 billion at a valuation of at least $8 billion, representing about 12% of Mynt's shares post-IPO. If completed, it would rival the roughly $1 billion raised by Monde Nissin in 2021, the Philippines' largest IPO to date. An $8 billion fintech valuation is a different asset class from a telecom multiple.
De la Pena put the structural argument bluntly:
The true investment rationale for Globe lies in a profound structural shift. Its future engines of exponential growth are no longer tied to traditional voice and text, its rapidly scaling ecosystem of digital assets and corporate techno-solutions.
He described Globe as a rare combination of defensive core income with exposure to growing digital assets, making a play into what he called the engine room powering the Philippines' digital transactions, cloud computing and AI infrastructure.
The Second-Order Trade the Market Is Not Pricing
The first-order read is simple and already widely stated: AI demand lifts data-center revenue. The second-order implication is sharper, and it is not fully reflected in the share price.
Globe trades like a telecom utility. On current metrics it carries a price-to-earnings ratio near 11.7, a price-to-book of 1.40 and a price-to-sales of 1.28 - valuation multiples that price a mature, low-growth connectivity business. The market is paying for the 67.7 million mobile subscribers, the 39.6 million mobile data users and the 2.4 million home broadband customers as of the end of June, not for the data-center and fintech optionality. As of the latest session the stock stood at 1,559 pesos, down 19% over three months and roughly flat year-to-date, even as the digital businesses accelerate.
The repricing mechanism runs through earnings mix, not headlines. Today the core mobile business still generates the bulk of revenue - mobile service revenue was 30 billion pesos in the first quarter alone. But if corporate data keeps growing at 15% or more while mobile grows mid-single digits, the higher-margin, contracted digital layer will account for a rising share of profit. A company whose earnings are part contracted infrastructure and part defensive connectivity deserves a higher multiple than one whose earnings are entirely usage-based. That is the re-rating thesis in one line.
The transmission channel extends beyond Globe itself. If a Philippine telco can monetize AI infrastructure, the same logic applies across emerging-market telecoms with real estate, power access and enterprise relationships. The sector's valuation anchor shifts from subscriber counts to megawatts and signed capacity. Conversely, telcos that fail to build the stack become pure commodity pipes - cheaper, but worth less.
There is also a financing dimension. A successful Mynt IPO at an $8 billion valuation would crystallize value that is currently embedded but unmarked in Globe's market capitalization. It would also give the fintech unit its own currency for acquisitions and its own accountability to public markets - a governance upgrade that private ownership does not force. The IPO filing is the first observable checkpoint on the structural thesis.
The Counter-Thesis: Regulation, Power and the Capex Trap
The strongest case against the structural re-rating is not that AI demand is fake - it is that Globe may not capture enough of it to change the multiple. Three risks attack the thesis at its foundation.
First, regulation. The Konektadong Pinoy Law, which aims to improve connectivity and affordability, has raised concerns about margin pressure in the core business. If the law caps prices or mandates costly buildout obligations without commensurate returns, the defensive core income that funds the digital pivot becomes less defensive. De la Pena noted that the stock continues to face pressure from the law alongside broader market weakness. A structural growth story funded by a regulated, margin-compressed utility is a harder story to underwrite.
Second, power. Data centers are energy-intensive, and Globe's own management flagged energy volatility as a first-quarter headwind. STT GDC Philippines has secured 40.5 megawatts of renewable energy through a 10-year partnership with MPower through 2035 - a meaningful hedge, but one that covers only part of the projected buildout toward 155 megawatts of national colocation demand. If power costs rise faster than contracted capacity rents, the infrastructure margin compresses precisely as volumes grow. The 91% data-related capex allocation becomes a trap rather than a catalyst if the return on that capital falls.
Third, competition. Hyperscalers are not passive tenants; they build their own facilities where scale justifies it. PLDT, Globe's domestic rival, is also investing in digital infrastructure. If the Philippine market fragments across three or four providers chasing the same 155 megawatts of projected 2030 demand, pricing power erodes and the 28% CAGR becomes a volume story without a margin story. The underpenetration gap that makes the opportunity attractive is the same gap that invites overbuilding.
These risks are substantial enough that they cannot be dismissed as noise. The structural thesis survives them only if two conditions hold: corporate data revenue growth stays well above mobile growth, and contracted capacity keeps pace with capex so that returns do not deteriorate.
What to Watch: The Signals That Settle the Debate
The structural-shift call can be tested, not just asserted. The falsifying signal is specific: if Globe's corporate data revenue growth falls below 10% year-on-year for two consecutive quarters while data-related capex remains above 90% of the total, the re-rating thesis is under real pressure - it would mean the company is spending like an infrastructure builder but growing like a utility.
Three other checkpoints matter. First, the Mynt IPO: a pricing at or above the $8 billion target validates the fintech optionality; a cut to the size or valuation target would mark the first crack. Second, STT Fairview lease-up: the company needs to convert active discussions for the unsold data-hall levels into signed, commissioned capacity. Third, power costs: if energy expenses accelerate while EBITDA growth stalls near the 7% first-quarter pace, the margin story weakens.
Scenarios split cleanly by time horizon. In the short term, sentiment and the Konektadong Pinoy Law headline risk dominate - the stock can stay range-bound even as fundamentals improve. Over the medium term, the earnings mix is the driver: every quarter in which corporate data outgrows mobile by a wide margin pushes the re-rating case forward. Over the long term, the structural outcome hinges on whether the Philippines becomes a regional data-center hub under the ASEAN digital framework, or remains a marginal market that hyperscalers serve from Singapore.
The base case is that Globe becomes a hybrid: a defensive telecom yielding steady cash flow, wrapped around a smaller but faster-growing infrastructure and fintech platform that commands a higher multiple. The upside case is a full re-rating if the Mynt IPO clears $8 billion and data-center capacity is fully leased ahead of schedule. The downside case is a capex trap: heavy spending, regulatory margin pressure, and a share price that never escapes utility multiples.
Globe's billion-dollar bet is not really on AI. It is on whether a telecom can own the ground floor of a digital economy before the rent gets priced in - and the next four quarters of corporate data growth will show whether the market was early, or right.
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