Converge gets license to provide connectivity in Singapore
Converge [CNVRG 16.8 8.7%] [link] disclosed that its wholly-owned subsidiary, Converge ICT Singapore Pte (Converge SG), received a license from the Singapore government to offer connectivity services to wholesale and enterprise customers in the country, effective January 3.
The license will allow CNVRG to sell capacity on its international fiber network to ISPs and telcos in Singapore, and directly to large companies. CNVRG said that its international fiber backbone was running at “half utilization”.
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CNVRG said that it developed that excess international capacity as a means of maintaining connectivity of its Philippine customers through potential disruptions, like “submarine earthquakes”.
While this seems kind of like a no-brainer to sell some portion of the excess capacity that is just going unused, it’s not immediately clear just how much of the excess capacity will be soaked up by whatever sales CNVRG is able to make through Converge SG.
Load management at this scale is not my forte, so perhaps CNVRG only needs like 75% of its international fiber capacity to ensure the smooth operations of its Philippines-based customers, leaving that remaining 25% open for monetization efforts like this one with Converge SG.
It’s also not clear how advanced the discussions are between Converge SG and its potential clients to be able to judge when these deals might first show up on CNVRG’s financial statements, but I look forward to seeing how this will all come together over the next few quarters.
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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