Apr. 3--Ernest Cu, incoming Globe president and chief executive officer, said the company however is unfazed with the entry of SMC.

"In terms of competition that is emerging, I think it will be very challenging to be in the market," he said, adding the local market has reached maturity.

He said there are 70 million subscriber identification modules (SIM) in the market today as against a population of 90 million, noting a higher incidence of dual SIM holders. "Acquiring subscribers would be difficult," he added.

The Globe executive said his company also has network advantage over the new player.

Delfin Gonzales, Globe's chief financial officer, told reporters the company will continue to source additional funding this year to finance expansion plans.

"One of the loans that we are working [on] is the $50-million loan from the Export Development Corp. of Canada to finance capex [capital expenditure] this year," he said.

The Globe executive's announcement came on the heels of a P1- billion loan that the company took out from Land Bank of the Philippines.

Owned by Ayala Corp. and Singapore Telecommunications Ltd., Globe last February offered P5-billion worth of retail bonds or IOUs sold to individual investors, with proceeds earmarked for capex. Globe last year said it would issue P10-billion worth of the debt papers this year.

The remaining P5 billion, Gonzales said, will be drawn up in the course of the year. "We have until early next year to use [this] license," he said.

For this year, Globe earmarked from $350 million to $400 million for its capex. Of the total, $130 million will be used to fund its core 2G network expansion and $150 million for consumer broadband including 3G. Its corporate wireline data business will get $25 million while $20 million will be spent on support capex, and another $25 million for international cable facilities.

Last year, the company spent P19.9 billion, 44 percent higher than its 2007 expenditures of P13.8 billion.

Jun Calaycay of Accord Capital Equities Corp. said there are two reasons why Globe is aggressive in borrowing--first the company is taking advantage of low interest rates, and two, to stay competitive.

"They have to stay competitive to protect their market share," Calaycay said, adding that PLDT, Smart Communications Inc., Pilipino Telephone Corp. as well as SMC are aggressively expanding their business.

Calaycay, however, said that one of the risks of heavy borrowing from abroad is the fluctuation of the dollar rates.

The PLDT group earlier acquired 30.2 percent of Manila Electric Co.