Converge sees subscriber, revenue boost in 9 months amid pandemic
MANILA, Philippines — Fiber internet company Converge ICT Solutions Inc. saw revenues surge in the first nine months of the year as users scrambled for a home internet connection during the COVID-19 pandemic.
Early financial results from the company showed revenues from January to September hit P10.68 billion, a gain of 67 percent versus the same period in 2019.
This was mainly boosted by its home internet segment, up 90 percent, and enterprise, up 15 percent.
“The company is on track to achieve its mid-term target of reaching approximately 55 percent of total households in the Philippines, expanding its network coverage to new areas nationwide,” Converge, controlled by CEO and founder Dennis Anthony H. Uy of Pampanga, said in a stock exchange filing on Friday.
Converge has yet to disclose figures on net income but its margin on Ebitda, a profitability indicator that refers to earnings before interest, taxes, depreciation, and amortization, stood at 52 percent.
Its return on invested capital stood at 20.4 percent of as end-Sept.
Converge closed the period with 900,531 residential subscribers or almost double the 454,438 customers during the same period last year.
Hinting at the size of the market, Converge said 90 percent of those that subscribed in the third quarter were first time fixed broadband users.
This market still represents a small fraction in the Philippines, an archipelago whose incumbent telcos PLDT Inc. and Globe Telecom mainly focused on mobile connectivity to serve customers.
On the other hand, Converge is the largest “pure-play” high-speed fixed internet provider in the country.
It is ramping up its rollout with the addition of 490,000 new fiber to the home ports in the third quarter or 2.7 times the figure at the start of 2020.
As of end-September, its network passed 5.1 million homes, which serves as an indicator of future demand.
The company also disclosed that monthly residential churn rate— or the pace by which customers switch providers—stood at just 1.1 percent during the nine-month period.
“Converge values its loyal customer base and has provided those subscribers significantly impacted by COVID-19 the option to settle their outstanding dues through staggered payments, which has reduced delinquencies,” the company said.
Average revenues per subscriber also rose to P1,352 in the third quarter of 2020 compared to P1,270 in the first semester of the year.
As business operations expanded, it added 400 new outsourced call center agents, tripling its capacity in terms of customer service.
Converge’s business expansion was backed by a P29 billion initial public offering earlier this month. This was the country’s largest IPO since Robinsons Retail Holdings Inc. in 2013.
Its ongoing rollout includes building an internet backbone across the Philippines. The company said on Friday it was on track to complete its expansion in Visayas and Mindanao by the first semester of 2021.
