‘Low-income Pinoys scrimping on internet usage’

MANILA, Philippines — It is becoming harder for internet service providers (ISPs) to retain low-income subscribers, who are feeling the pain of the double whammy of rising prices and a weak peso.

While Converge ICT Solutions Inc. has grown its subscriber base to 3.1 million to date, the ISP is struggling to acquire and retain consumers in its low-cost product Surf2Sawa.

Converge chief operations officer Benjamin Azada said the impact of a declining peso and hot inflation is hitting the provider’s low-income subscribers.

Azada said, however, that its flagship service FiberX is picking up steady demand. FiberX caters to middle-income families, as its price ranges between P1,349 and P2,599 monthly.

On the other hand, Converge created Surf2Sawa to reach low-income families, or those who prefer to buy monthly subscriptions in sachets. Surf2Sawa offers 30-day broadband for just P700.

Azada said even though Surf2Sawa is already Converge’s cheapest package, demand for it goes up and down depending on the economic situation.

For instance, in the third quarter, inflation stayed above the six-percent level, and even climbed to 7.2 percent in September, compelling consumers to keep their spending in check.

Still, Azada is optimistic about Surf2Sawa’s prospects in this economic landscape, especially as Converge is a pioneer in low-cost broadband.

Further, Converge is working toward cutting the price of broadband further, as it hopes to reach the affordability threshold for connectivity. The ISP is exploring a new product that would allow it to offer fiber broadband for only P500 a month, even cheaper than Surf2Sawa.

The International Telecommunication Union has set an affordability threshold for connectivity at two percent of gross national income (GNI) per capita. However, a broadband connection in the Philippines currently costs four percent of GNI per capita, according to Opensignal.

Converge CEO and co-founder Dennis Anthony Uy said the ISP would keep on putting out fresh products to serve different markets and varying needs across the archipelago.

He also underscored the importance of rolling out network assets in as many areas as possible to achieve economies of scale in a time when costs are rising.