Converge ICT Solutions Inc. expects to grow its revenue by 10 to 15 percent this year, driven by the continued growth of its residential and enterprise businesses and the surging demand for its new prepaid broadband service.
Converge yesterday reported a 4 percent increase in net income to P7.44 billion in 2022, from P7.16 billion in 2021, while consolidated service revenues rose 27 percent to P33.7 billion last year, from P26.5 billion in 2021.
“Our guidance (for 2023) will be as follows: we expect consolidated revenues of 10 to 15 percent growth, the residential business is expected to continue to be the largest contributor with 10 percent revenue growth, while enterprise business is expected to grow by 25 percent,” Grace Uy, Converge co-founder and president, said during the press briefing yesterday.
Uy said the estimated capital expenditure (capex) for this year will be P12 billion to 15 billion, lower than last year’s P21.9 billion capital spending, as the company has completed a major investment in its infrastructure and is now focused on the utilization of its capacity.
Of the total capex this year, Converge has allocated 26 percent for backbone and 58 percent for access.
Converge said the capex for this year will focus on port deployment in key expansion areas in Visayas and Mindanao, and modems to be installed with new subscribers. Other key capex initiatives include investments into international subsea cables, and the acquisition of core network equipment to further bolster the redundancy of Converge’s domestic fiber network.
Converge expects that strong demand from its key expansion areas in the Visayas and Mindanao area, as well as demand for new products such as its prepaid fiber broadband service, will result in the continuous growth of its residential revenues by around 10 percent and of its enterprise customers by about 25 percent this year, as the economy reopens and enterprises undertake a modular shift to on-site work arrangements.
The company said earnings before interest, taxes, depreciation and amortization grew to P19.3 billion, with margins expanding to a record 57 percent level.
Meanwhile, Dennis Anthony Uy, Converge co-founder and chief executive officer, yesterday introduced low-cost plans and prepaid fiber products targeting the low-end market.
The prepaid fiber Surf2Sawa is now available in over 400 cities and municipalities across the country, including key areas in Bulacan, Batangas, Quezon, Bicol, Panay and Negros..
Converge said it continued to expand its network with total homes passed reaching 14.9 million at the end of 2022, accounting for 56 percent of total Filipino households. This is ahead of the company’s commitment to reach 55 percent of the population by 2023.
