Converge ICT Solutions Inc. expects its capital expenditures (capex) guidance for 2023 to be “trending downward” given its massive portfolio of unused capacities.
During the announcement of its financial results for January to September, Converge Chief Financial Advisor Matthias Vukovich said Converge currently has 5 million inactive ports in its network, which means that the company still has enough capacity to accommodate the demand for fiber broadband.
Currently, Converge has about 6.7 million fiber ports nationwide.
“We expect next year to be actually lower than higher. This does not mean we are slowing down our expansion,” he said. “We will continue to invest in hardening our network…[but] our capex should be trending downward.”
Converge is spending between P21 billion and P23 billion in capital outlays in 2022, lower than its initial planned capex of P25 billion.
“We have been, over the last years, front loading a lot of our capex. As we are growing to be a more mature business…we will become cashflow positive. We will continue to invest in our core business and digitalization projects,” Vukovich said.
Converge booked P6.11 billion in net profits in nine months, a 17.5-percent growth from P5.20 billion the year prior, thanks to the steady growth in demand for fiber broadband.
Its top line rose by 30 percent to P24.5 billion from P18.83 billion, driven largely by its residential business.
The consumer broadband business grew by 30.5 percent to P21.36 billion from P16.37 billion, while its enterprise vertical expanded by 26.9 percent to P3.12 billion from P2.46 billion.
“Despite the macroeconomic pressures experienced throughout the year, Converge has continued to achieve solid financial growth. This was driven mainly by the growth in our subscriber base,” said Converge President Maria Grace Uy.
Currently, Converge has 1.85 million residential subscribers, 16 percent higher than the year prior. Supporting the residential subscriber growth is the rollout of fiber ports with Converge deploying more than 411,000 fiber to the home (FTTH) ports nationwide in the third quarter alone.
With its continued rollout of fiber ports, Converge’s household coverage is now at 53 percent. It is on track to reach the accelerated target to cover approximately 55 percent of households in the Philippines by 2023.
“Our fiber digital highway is now running around 600,000 kilometers, reaching our northernmost provinces in the Ilocos and Cordillera regions up to Palawan and the Bicol region, and the major islands in the Visayas and key cities in Mindanao. And it’s not yet over. Our mission is to reach the underserved areas in the country with our world-class fiber infrastructure,” said Converge CEO Dennis Anthony Uy.
