Converge ICT Solutions Inc. is hiking its programmed capital expenditures for 2021 by a quarter from last year to continue installing more ports and deploy more fiber optic cables nationwide, as it targets to add over half a million subscribers this year.
Dennis Anthony H. Uy, the company’s CEO, said the group has set a P20-billion capital program for the year, a 25-percent increase from its P16 billion capital spend in 2020. The amount, he said, will be used for network development and expansion, as it targets to reach more areas in the Visayas and Mindanao this year.
“The majority of the P20 billion is mostly for the number of ports. In terms of the backbone, that’s almost 20 percent to 30 percent of the total amount,” he said in a press briefing on Thursday.
Uy said the group is targeting to install 1.5 million ports this year to reach approximately 35 percent of households in the Philippines by year end.
Converge CFO Matthias Vukovich noted that the group will also be “deepening and hardening” its existing backbone network in Luzon through the planned capital this year. The company, he said, will likewise allot a portion of its budget to “digitalization initiatives to enhance customer experience.”
With this capital spend, Converge hopes to increase its subscriber base from 1.04 million subscribers last year to as much as 1.7 million subscribers this year.
Converge reported record profits in 2020, when it booked a net income of P3.39 billion, a 78-percent surge from P1.94 billion the year prior, as its revenues grew by 71 percent to P15.65 billion from P9.14 billion.
The stellar performance of Converge is attributable to the huge jump that its residential subscriber base recorded — from 530,000 subscribers at end-2019 to 1.04 million subscribers at end-2020.
Converge’s consumer business contributed the largest to its revenues at P12.62 million, while its enterprise business contributed P3.02 billion.
As of end-2020, Converge has a fiber optic backbone of 55,000 kilometers and has a total of 3.5 million ports deployed nationwide. Uy said the company is “on track to achieve its target of reaching approximately 55 percent of total households in the country by 2025.”
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