Converge doubling capex in 2024

MANILA, Philippines — Broadband provider Converge ICT Solutions Inc. is doubling its capital expenditures to as much as P19 billion this year to pay for new projects that aim to improve customer experience.

Converge will double its capex for 2024 to a range of P17 billion to P19 billion, as it will subscribe to new subsea cables and put up additional data centers, according to its latest financial report.

On the other hand, Converge spent P9 billion for its capex and used this amount to upgrade outside plant, inside plant and customer premise equipment.

However, Converge was supposed to invest at least P12 billion last year, but some projects encountered delays. In turn, the company would carry over P3 billion in capex this year to pay for late invoices.

Converge serves as a party to subsea cable systems that are scheduled to be completed within the year. In particular, Converge will be connected to the Bifrost Cable System that will run between Singapore and the US, with an investment of P5 billion to hook to the Asia-Pacific linkage.

Also, Converge will join the Southeast Asia-Hainan-Hong Kong Express Cable System that will run through China, Hong Kong, Malaysia, the Philippines, Singapore and Thailand.

On top of this, Converge will allocate up to P5 billion from 2024 onward for the construction of new data centers where it plans to store its digital platforms.

These facilities play a critical role in accelerating the digital transition of an economy, as telcos rely on subsea cables to facilitate information exchange and on data centers to store applications of clients.

All in all, Converge is making progress in its bid to increase market share in broadband.

In 2023, the company led by Pampanga-based billionaire Dennis Anthony Uy grew its subscriber base by 13 percent to 2.13 million from 1.88 million in 2022.

Converge grew its profit by 22 percent to P9.1 billion from P7.44 billion, as its revenue went up by five percent to P35.36 billion while costs declined by five percent to P12.71 billion. Converge also expanded its national coverage to 63.4 percent of households.

Moving forward, the company expects its balance sheet to remain with both the residential and enterprise segments of the business growing at quicker paces.

For this year, Converge expects its revenue to improve by at least seven percent, supported by a six percent rise in the residential bracket, as well as a 12 percent push from the enterprise side.