Innove Communications, Inc.

---

Innove - Large enough to be responsible, small enough to be responsive

Globe Telecom has connected the Philippines to the world since 1928 as a telex carrier when it first opened as Dollar Radio. It is now the fastest growing Philippine carrier offering a diversified range of voice, data, and value-added network services.

In July 2002, Globe Telecom created GlobeQUEST direct the same energy and focus to its data business to equip its corporate customers with the necessary tools to take control of their business. GlobeQUEST provides relevant solutions for business customers based on ubiquitous, value-priced, high-speed data services over a nationwide broadband network.. The offerings include high-speed data, voice, and Internet services for corporate customers that include dial-up services, broadband access, corporate voice, data centers, broadband Internet, and private networks.

New Business Consolidation

The GlobeQUEST business now takes a new road. Globe Telecom recently announced through a press release statement that it is consolidating its Wireline voice and data business under its wholly-owned subsidiary. Starting October 1, 2003, the Company's Globelines and GlobeQUEST services will move their networks and products to Innove Communications, Inc. (pronounced in-no-ve), a 100% subsidiary of Globe Telecom.

This is expected to result in higher-level service levels characterized by wider geographic coverage, integrated voice and data solutions, and a focused approach to satisfying corporate and consumer communication needs.

According to Globe Telecom CEO and President Gerardo C. Ablaza, Jr., Innove will be Globe Telecom's subsidiary serving voice, private data networks, and Internet needs of individuals and enterprises in the Philippines, transferring and integrating its Wireline networks and operations into this fully owned subsidiary, which used to be named Isla Communications.

Last August 7, 2003, the National Telecommunications Commission (NTC) approved the legal transfer of Globe's wireline business, authorizations, properties, assets and obligations to Islacom.. Islacom's corporate name was subsequently changed to Innove to reflect the renewed drive for innovation and excellence in the consolidated, focused wireline business. Last August 25, 2003, the Securities and Exchange Commission (SEC) approved the change in name from Islacom to Innove Communications, Inc.

The NTC decision, likewise approved the common usage, operations and maintenance of the network elements of both Globe and Innove. This is to ensure a smooth transfer of the Local Exchange Carrier (LEC) and data services from Globe, and no disruption in interconnection with other carriers while the transfer is ongoing.

Innove will continue to market and sell the Globelines and GlobeQUEST services, while Globe Telecom will continue to focus on the wireless segment of the business.

Mr. Ablaza added that Innove will pursue further steps to improve the wireline business by expanding its geographic footprint, investing in new network technologies, and working closely with application technology providers and integrators to make customer applications take advantage of the company's higher availability and more cost effective networks.

Innove will absorb about 500 employees working for Globe's Wireline business. Employees will carry over their current seniority and maintain current salary levels. The employee movement to Innove will have no impact on individual jobs, compensation benefits, security and tenure, or individual career options. Innove is expected to have about 800 employees.

Fusion of Two Businesses

Before GlobeQUEST was launched last year, Globe Telecom had two business groups - GlobeNet, a full service Internet Service Provider for business applications, and GlobeData, a comprehensive suite of domestic and international data services using highly reliable networks, 24 x 7 after-sales support, and the widest points of presence.

"We were also coming out with the third business, the Internet Data Center. So it would be very unwieldy to offer GlobeNet, GlobeData, and Globe Data Centers. Customers were saying that what we really needed was an integrated solution, so we felt that we needed to have one brand," said Jesus C. Romero, Head of Innove's Wireline Data Business. "Secondly, we needed a brand that would communicate the fact that we are providing services and not just products or technology. So we thought that GlobeQUEST would embody our intent to deliver world-class services differentiated by service that encompasses all our businesses for voice, data and Internet requirements. The GlobeQUEST brand will continue to be used by Innove's wireline data business under license from Globe."

Romero added that GlobeQUEST is focused on customers by industry segments and even created the 'middle office'. "We call it the Customer Support Group that ensures the customer experience from the selling side to the technical side and down to the operational day-to-day activities are pleasant all the way."

GlobeQUEST currently has 800 corporate customers and focuses on key customer segments such as call centers, Business Process Outsourcing companies, Banking and Finance, service providers, and retail companies among others. GlobeQUEST reached 27% quarterly revenue growth in its one year of operation.

Fierce Competition

For over a year since its inception, GlobeQUEST is facing fierce competition in a market that has too many players and demanding customers. At present, the company has to compete with nine data providers and several ISPs that offer the same set of services. On the international side, foreign carriers are also carrying similar services.

Thus, GlobeQUEST faced challenging issues such as pricing and service quality that tries to differentiate from the other players in the field. "So we had to tighten up our business processes, work on our cost-efficiency, and generate or develop new products.

Romero noted that its marketing initiatives boil down to focus. "It is difficult to be everything to everybody. There are certain things that we do well. There are things that other companies do well to the extent that we can complement what we have by forming partnerships. We, of course, always want to partner with the leaders in the industry. This market, though it's not growing fast in terms of revenues, grows dramatically in volume."

GlobeQUEST has formed alliances with technology providers such as Cisco Systems and Fujitsu Philippines to complement the company either with hardware, software or applications.

As a GlobeQUEST technology partner, FPI has been responsive to the needs of the company with outstanding technical support as its strong point, Romero stressed. "The challenge for FPI, just like in our case, is to provide good service and at the same time to contend with customers who are concerned about price. There are many vendors out there who will just focus on price."

GlobeQUEST is also forming alliances on the channels side. "We think that certain segments are best addressed by people who know those segments better or who could address them more closely than we can," Romero said. The small-to-medium enterprises (SMEs), for instance, are covered by its alliance partners.

Aside from forming alliances, he claimed that its branding campaign for all its corporate products is another initiative that shows customers that they are dealing with a reputable, stable, and dynamic company.

Customer Engagement

GlobeQUEST aims to be more involved on an end-to-end basis from the desktop to the data center. Romero added. "From a total perspective, we will deliver what the customer needs. We should be in the leading edge of any opportunity."

He further said the company is trying to move its customer satisfaction index higher. "We are always looking at the internal operations to see where we are doing wrong, where we are doing well, and what needs to be done. We have a Customer Advisory Council who tells us what we should do by measuring not just customer satisfaction but customer engagement."

To put it in simple terms, Romero said a satisfied customer is not necessarily the person who will always buy from GlobeQUEST. "An engaged customer will always buy from GlobeQUEST and we will be the first company our customers will approach when there is a requirement. An engaged customer is much deeper than a satisfied customer."

To meet the growing demands of its customers, GlobeQUEST is focusing on scaling its broadband network at higher speeds to accept more customers with more diverse requirements. As a technology wish list to improve its operations and service offering, the company is looking for a 'magic box'. "Today, we deliver services to customers through various methods of access. We wish there is a magic box that has all the access methods in one solution because it is very difficult to have two to three methods to implement an access network."

Reliable and Responsive

Romero considers people and scalability of infrastructure as major challenges for GlobeQUEST. "Our tagline at the end of every presentation is 'we are large enough to be reliable, but small enough to be responsive'. So the challenge is to ensure that as we grow and become a very strong player, the kind of service that we provide will continue to be the same as when we were small."

One lesson Romero learned after one year of managing GlobeQUEST is that the customer is truly king. "In anything we do, we must provide good service and a good price, as well as form a good relationship with customers. Sometimes, it even means that if we are not able to do something well, we shouldn't do it at all. Customers actually appreciate it when we admit this. This means perhaps that we should look at other options or not do it at all because at the end of the day, we will all lose out."

Managing the organization is Romero's most challenging task as head of GlobeQUEST. "Technology and products are something that are not unique. We can spend money to buy the best equipment. The challenge is ensuring that the organization has the most motivated, the most capable, and dedicated team so that whatever we provide will be the best and will be something that will make customers work with us. We don't think that they will want to work with us because we have the best equipment. They will work with us because they think our people will deliver for them what needs to be done."

---