New business: Converge targets 1M prepaid subscribers by 2025
MANILA -Converge ICT Solutions Inc. sees its new prepaid fiber internet service—offered at lower price points amid the rising consumer prices—reaching a critical mass of 1 million subscribers in over two years.
Maria Grace Uy, Converge cofounder and president, said in a virtual briefing on Thursday they were hoping to hit a million subscribers for Surf2Sawa prepaid product by 2025. She estimated this would translate to a 10-percent revenue contribution.
The listed internet service provider is set to fully launch the prepaid service in June, focusing on the lower end of the market.
Surf2Sawa currently has about 29,000 subscribers. But Converge expects to grow this number to 120,000 by the end of the year. In comparison, the company has over 1.8 million postpaid subscribers.
The prepaid product costs as low as P50 (good for one day), for the cheapest offering, to as much as P700 (for 30 days). Postpaid plans are priced at least P1,500 per month.
Converge chief operating officer Jesus Romero said the primary goal of the new product was to make internet connectivity more accessible to the public. “The revenue percentage is probably not gonna be as big,” he said.
In the first quarter, Converge saw its net income improve by 10 percent to P2.17 billion as revenues grew by 12 percent to P8.64 billion from the previous year.
Residential segment revenues rose 9 percent to P7.4 billion for the period, thanks to the expansion of postpaid subscribers.
Top-line figures of the enterprise segment shot up by 33 percent to P1.24 billion in the first three months as the small and medium enterprise client base grew by 43 percent.
It spent about P3 billion in January to March for port deployments and other network expansion initiatives. This year, it has set capital expenditure guidance of P12 billion to P15 billion, bulk of which will be spent on ports and routers rollout, investments in subsea cables and digitization efforts.
Recently, Converge inked a memorandum of understanding with South Korean company KT Corp. to work together in several technological advancements, such as cloud-based video surveillance solution and transportation management technology.