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Business

Converge cuts capex to P12 billion

Elijah Felice Rosales - The Philippine Star
Converge cuts capex to P12 billion
Converge will reduce its capex by nearly half to P12 billion this year from P22 billion in 2022, to keep its finances in the pink of health in the face of rising financing costs worldwide.
Businessworld / CONVERGE ICT SOLUTIONS INC. / YOUTUBE

MANILA, Philippines — Broadband provider Converge ICT Solutions Inc. has slashed its budget for capital expenditures to P12 billion for this year, as the firm seeks to broaden its customer base first to maximize all of its assets.

Converge will reduce its capex by nearly half to P12 billion this year from P22 billion in 2022, to keep its finances in the pink of health in the face of rising financing costs worldwide.

In 2022, Converge spent 61 percent of its capex for the deployment of network support while 30 percent went to the expansion of backbone infrastructure, with the remaining nine percent used for other expenses.

Converge CEO and co-founder Dennis Anthony Uy said the internet provider would slow down on its network expansion this year, as it will focus on increasing its subscriber base to maximize its pool of available fiber ports.

Based on records, Converge closed 2022 with nearly eight million fiber ports in hand following investments it made in improving its infrastructure network. At present, Converge extends fiber internet to 1.88 million users, leaving it with more than six million unutilized fiber ports.

For Uy, Converge made the right call in expanding its fiber assets at a quick pace, as it can slash operational expenses in a period of monetary tightening and spiking inflation.

Converge yesterday reported that it grew its net income by four percent to P7.44 billion in 2022 from P7.16 billion in 2021, on the double-digit jump across its revenue lines.

The firm posted a 27 percent surge in its revenue to P33.7 billion from P26.48 billion, attributed to the growth of both residential and enterprise segments, especially in Visayas and Mindanao.

Further, Converge recorded a household coverage of 56.2 percent at the end of 2022, exceeding its 55 percent target by a year earlier. Moving forward, Converge plans to focus its expansion in growth areas in Visayas and Mindanao, such as in Bohol, Cotabato and Zamboanga.

Converge has also entered the retail market for prepaid internet with the launch of its Surf2Sawa that seeks to serve the data requirements of low-income families. The product offers no data cap and can be availed in at least 420 cities and municipalities nationwide.

Uy said Surf2Sawa provides unlimited internet with a download speed of up to 25 Mbps for P50 a day, P200 for seven days, P380 for 15 days and P700 for 30 days.

Through this, Converge hopes that even low-income families can meet their digital requirements without having to subscribe to a postpaid plan that costs P1,000 per month at the minimum.

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