Converge ICT Solutions Inc. believes its 2023 capital expenditure guidance (CAPEX) is “trending down” given its massive portfolio of idle capacity.
During the announcement of financial results for January-September, Matthias Vukovich, Converge’s Chief Financial Advisor, said that Converge currently has 5 million idle ports on its network, meaning the company still has enough capacity to meet fiber broadband demand to satisfy.
Currently, Converge has about 6.7 million fiber ports nationwide.
“We expect next year to actually be lower than higher. That doesn’t mean we’re slowing down our expansion,” he said. “We will continue to invest in strengthening our network…[but] our capital spending should trend down.”
Converge will spend between 21 and 23 billion pesos in capital expenditures in 2022, which is below the originally planned capital spending of 25 billion pesos.
“We have brought forward a large part of our investments in recent years. As we grow into a more mature company, we will be cash flow positive. We will continue to invest in our core business and in digitization projects,” said Vukovich.
Converge posted nine-month net income of P6.11 billion, up 17.5 percent from P5.20 billion a year ago, thanks to steadily growing demand for fiber broadband.
Revenue increased 30 percent to P24.5 billion from P18.83 billion, driven primarily by retail banking.
The consumer broadband business grew 30.5% from P16.37 billion to P21.36 billion, while the enterprise division grew 26.9% from P2.46 billion to P3.12 billion.
“Despite the macroeconomic pressures experienced throughout the year, Converge has continued to deliver solid financial growth. This was primarily due to the growth of our subscriber base,” said Maria Grace Uy, President of Converge.
Converge currently has 1.85 million residential customers, up 16 percent year-on-year. Residential subscriber growth is being helped by 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 the continued rollout of fiber ports, Converge’s household coverage is now at 53 percent. It is on track to meet the accelerated goal of covering approximately 55 percent of households in the Philippines by 2023.
“Our fiber optic digital highway is now approximately 600,000 kilometers long, reaching our northernmost provinces in the Ilocos and Cordillera regions to Palawan and the Bicol region, as well as the major islands in the Visayas and major cities in Mindanao. And it’s not over yet. Our mission is to reach the underserved areas of the country with our world-class fiber infrastructure,” said Dennis Anthony Uy, CEO of Converge.