Converge readies P20 billion expansion

MANILA, Philippines — Pure end-to-end fiber internet service provider Converge ICT Solutions Inc. plans to spend P20 billion this year to strengthen its network and expand services to reach Visayas and Mindanao.

Converge CEO Dennis Anthony Uy said the company, which is fresh from achieving record profitability in 2020, targets to empower more Filipinos through fiber technology as it moves to complete its nationwide backbone this year.

“We expect to expand our fiber footprint to Visayas and Mindanao by the first half,” he said.

“People are hungry for better internet service in the country. I’m pretty sure we can deliver to Filipino consumers better broadband now and even in the future,” Uy said.

Converge’s P20 billion capital expenditures budget for this year will be used to expand the company’s backbone and the deployment of additional fiber-to-the-home ports to reach approximately 35 percent of households in the country by December.

“The budget for the backbone is approximately 30 percent of the P20 billion, which is primarily VisMin, but we are also hardening remaining backbone in Luzon,” Converge chief financial officer advisor Matthias Vukovich said.

Vukovich said the bulk or 50 percent of the amount would be used to deepen its network in Luzon where it is just scratching the surface, while the remaining 20 percent is for IT initiatives and further digitalization to enhance the customer experience.

With Converge getting bigger and gaining scale, Vukovich said the company is expected to continue to increase its profitability going forward.

Converge saw its net income rise by 78 percent   to P3.39 billion last year from P1.94 billion in 2019 as consolidated revenues soared by over 71 percent year-on-year to P15.65 billion.

Revenues from the firm’s residential business doubled to P12.63 billion behind strong and continued subscriber take-up, while enterprise revenues grew by around nine percent year-on-year to P3.02 billion as businesses started to adapt to the new normal.

The residential subscriber base of Converge doubled in 2020, reaching approximately 1.038 million from 530,000 subscribers in 2019.

“As the home became both office and classroom amid the global pandemic, we further accelerated our fiber network rollout to deliver high-speed broadband connectivity to more Filipinos, reaching underserved and unserved areas in the country,” Uy said.

Converge expects that the strong demand for reliable high-speed broadband would result in the continuous growth of its residential subscriber base to approximately 1.6 million to 1.7 million by the end of the year.

The company said it is on track to reach its mid-term goal of approximately 55 percent nationwide household coverage by 2025.