Converge sets P25-B capex to lure more customers
Converge ICT Solutions Inc. will spend up to P25 billion this year to improve its services and expand its reach after posting higher earnings and welcoming more residential customers.
The amount is significantly higher than its actual capital expenditures (capex) last year, which shrunk to P9.4 billion amid delays in the turnover of various projects, the company led by tycoon Dennis Anthony Uy said in a stock exchange filing on Monday.
Its capex for the year includes the budget intended for international subsea cable systems—BiFrost Cable System and the Southeast Asia Hainan-Hong Kong Express Cable System (SEA H2X)—which were supposed to be completed last year if not for delays in permitting requirements and unfavorable weather conditions. Converge said both projects should be done this year.
The 5,000-kilometer (km) SEA H2X submarine cable, which has a design capacity of 160 terabits per second (Tbps), traverses Hong Kong, China, Thailand, East Malaysia and Singapore.
The 15,000-km BiFrost cable system, which has a capacity of up to 15 Tbps, will connect the Philippines to Singapore, Indonesia, Guam and the west coast of North America.
Part of the 2025 capex will go to the operation of two data centers, including a Caloocan hub that is scheduled to go online within the quarter.
Designed to accommodate 300 racks, the Caloocan data center is expected to serve Converge’s operational needs.
A portion of the capex will also be used for port expansion and redundancy, which ensures stable network connection.
Converge is projecting up to 16-percent growth in revenues as the company seeks to cover the industry’s “broad underserved market.”
This comes after high demand for its services lifted its 2024 earnings by 18.8 percent to P10.8 billion. Revenues climbed by 14.8 percent to P40.6 billion.
The residential business contributed P34.4 billion to the company’s top line, representing a 13.7-percent uptick.
Home subscribers grew by a fifth to 2.56 million as of end-December, while household coverage improved to 64.19 percent from 63.36 percent year-on-year.
As for the enterprise segment, revenues climbed by 21.9 percent to P6.2 billion. Small and medium enterprises led the growth as the segment rose by 30.9 percent.
