Fixed broadband operator Converge ICT Solutions Inc. ended 2023 with a 22.3 percent leap in its net income after tax, recording P9.1 billion for the whole year of 2023 compared to P7.4 billion logged in 2022. 

In a press briefing on Monday, March 18, Converge President Grace Uy said the rise in earnings was attributed to the “increase in revenue and a lot of cost savings, where there was some reclassification of network materials."

Consolidated revenues of the company increased by five percent to P35.4 billion in 2023 from P33.7 billion in 2022. Residential revenues grew to P30.3 billion from P29.5 billion as net additional subscribers surged by 35 percent to 250,691 new subscribers to Converge home broadband services. On the other hand, enterprise revenues also increased by 20 percent to P5.1 billion last year from P4.23 billion. 

In the enterprise segment, the small and medium enterprise (SME) sector grew 34.9 percent, followed by the corporate sector with 13 percent, and wholesale sector with 14 percent. 

The telco also reached its target of more than two million subscribers, comprising around two million postpaid and 114,836 prepaid subscribers. 

In the fourth quarter of 2023, Converge’s flagship service FiberX brought in 35,152 new subscribers while its other plans BIDA Fiber and Surf2Sawa both consolidated 174,672 new subscribers. 

The National Capital Region (NCR) has Converge's largest subscriber base, followed by North and Central Luzon, South Luzon and Bicol, then Visayas and Mindanao. 

“In 2023, we have consistently upheld momentum for our newly launched products Surf2Sawa (S2S) and BIDA Fiber, supported by the consistent growth in our flagship brand FiberX, especially in the fourth quarter,” said Converge CEO and Co-Founder Dennis Anthony Uy.

As for earnings before interest, taxes, depreciation and amortization (EBITDA), it increased 11.2 percent to P21.5 billion from P19.4 billion in 2022. 

Converge noted that network materials and supplies costs decreased by 84 percent due to “improved capability to properly segregate costs of network materials and supplies according to usage.” However, expenses made for repair and maintenance surged to 58 percent for network upkeep in line with multiplying subscribers. 

Total capital expenditure in 2023 was P9 billion, mostly allocated to Outside and Inside plants, and customer premise equipment. 

In a statement, Converge shared that P3 billion worth of capex was carried over to this year because of “late invoice received from submarine cable contractors and delays in construction for some assets.” 

Faster growth

Converge is aiming to grow consolidated revenues by seven to eight percent in 2024, along with six percent and 12 percent growth targets for the residential and enterprise segment respectively. 

For its residential segment, it is looking into growing sales partner coverage and brand awareness, and providing better repair and service operations to reduce disconnection of the network in households. 

For enterprises, Bifrost, an international subsea cable system, is expected to be completed within the year to contribute to the wholesale segment. It is also eyeing data center ventures and marking more strategic collaboration with stakeholders in the broadband space. 

In addition, Converge is seeking to spend P17 to P19 billion in cash capex this year, given its international subsea cable payments, capital outlays for data centers, and considering the delays in supplier invoices for 2023.