Globe cable deal seen supporting cloud, data center growth — BMI

GLOBE Telecom, Inc.’s participation in the Candle Cable System consortium is expected to support the Philippines’ cloud and data center sector and attract further investment in subsea cable infrastructure, Fitch Solutions unit BMI said.

“Globe Telecom’s participation in the Candle Cable system will significantly boost the Philippines’ international connectivity, supporting regional ambitions for digital hub status through enhanced digital infrastructure resilience and high-speed, low latency networks across the Asia-Pacific region,” BMI said in a report dated April 14.

Globe earlier said it had joined the Candle Cable system consortium to strengthen the country’s digital backbone by linking it to submarine cable networks across Asia.

The Candle Cable system is an 8,000-kilometer subsea network connecting Japan, Taiwan, Indonesia, Malaysia, Singapore, and the Philippines. It has 24 fiber pairs and a total capacity of 570 terabits per second.

The consortium includes Meta, Japan’s SoftBank Corp., IPS, Inc., NEC Corp., Telekom Malaysia Bhd., and Indonesia’s PT XLSmart Telecom Sejahtera Tbk.

BMI said the Candle Cable system and other subsea cable investments could enhance the country’s digital backbone by supporting higher international data traffic driven by artificial intelligence, cloud computing, and 5G adoption.

“Robust growth in the Philippines’ cloud and data center markets, combined with government-backed digital transformation initiatives, positions the country as an emerging digital hub amid rising technology demand,” it said.

BMI added that Globe’s participation could help strengthen international connectivity and support the country’s ambitions to become a regional digital hub through improved infrastructure.

Globe is participating in the consortium as both an investor and a landing party. The cable is planned to land at its Nasugbu station in Batangas, complementing another Philippine landing point in Baler.

The system is expected to begin operations by 2028, Globe said, adding that it is among the higher-capacity cable systems in the region.

The 24-fiber-pair configuration is designed to support higher capacity and lower latency, which could help enable cloud computing, artificial intelligence applications, and enterprise digitalization.

Separately, CreditSights said it is maintaining its market perform recommendation on Globe in relation to its tender offer for $600 million in perpetual securities.

“We advise investors to participate, and view the tender as an opportunity for investors to reinvest the funds into similar-yielding,” it said, adding that it expects limited non-call risks for the perpetual securities.

On Tuesday, Globe launched a tender offer for its outstanding 4.2% senior perpetual capital securities issued in 2021 as part of its liability management program.

The company offered to purchase any and all outstanding securities at $1,000 per $1,000 principal amount, with Morgan Stanley acting as dealer manager.

Shares in Globe Telecom rose by P12 or 0.73% to close at P1,645 each on Wednesday. — Ashley Erika O. Jose