Converge ICT Solutions Inc. has acquired shares of Digital Telecommunications Phils. Inc. (DTPI) in Digitel Crossing Inc. (DCI) and Asia Netcom Philippines Corp. (ANPC) for a total of $7.5 million (P358.47 million) to gain “strategic imperative to expand its capabilities in telecommunications.”
In two separate disclosures to the local bourse, Converge said it acquired 10 million common shares in DCI for $4.84 million and 300,000 common shares in ANPC for $2.66 million.
DCI maintains and operates the cable landing stations in the Philippines for the East Asia Crossing (EAC) and City-to-City (C2C) cable systems. ANPC holds and owns the land assets where the EAC cable landing station is located.
Bringing the two companies into Converge “will promote the strategic imperative of Converge to expand its capabilities in telecommunications since it acquires interest in entities involved in providing, operating and maintaining the cable landing stations of EAC and C2C international cables,” according to the two disclosures.
The two cable systems interconnect several countries in Asia and the Pacific as well as the United States. They were merged through the acquisition of global telecom services provider Pacnet, a company owned by Telstra.
Together the two submarine cable systems have eight landing points in Singapore, Hong Kong, China, Taiwan, South Korea, Japan, and the Philippines, spanning 19,800 kilometers with a design capacity of 2.56Tbps.
For Converge, acquiring ANPC and DCI “will promote synergies in the telecommunications business of Converge and is meant to implement the joint venture between Converge, Pacnet Network Philippines Inc.” and the two recently-acquired companies.
Converge saw its profit tripling to P1.55 billion from P574 million thanks to growing demand for Internet connectivity to the home during the first quarter.
The rise in net income was complemented by the Corporate Recovery and Tax Incentives for Enterprises Law, which reduced the company’s taxes to 21 percent during the quarter under review.
The company’s top line rose by 83.6 percent to P5.55 billion from P3.02 billion, driven by its residential and enterprise businesses.
Converge expects to end the year with about 1.6 million to 1.7 million subscribers.
The company is gearing up to corner a chunk of the highly unsaturated home broadband market by 2025. It is currently building a national backbone that will allow it to reach approximately 55 percent of the total households in the Philippines.
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