Fiber broadband provider Converge ICT raised about P29.1 billion from its initial public offering (IPO), the second largest in the history of the local bourse, despite the pandemic.
In a briefing Monday, Oct. 26, Converge ICT founder and chief executive officer Dennis Anthony Uy said proceeds of the IPO will boost the company’s objective to build the largest fiber broadband network in the country.
Uy said they are banking on the strong demand for broadband Internet connection and young tech-savvy population as the main drivers of the company’s growth.
“We dominate in a market that is severely underserved — and presents a blue ocean opportunity,” he said, adding that demand is outstripped by the limited number of broadband providers in the country.
In a disclosure, the company said it was able to attract more than P4.856 billion worth of demand from domestic investors alone during the IPO, while cornerstone investments hit over P10.93 billion.
During the same briefing, Converge ICT chief financial advisor Matthias Vukovich said they are optimistic on the strong growth of the company due to strong demand, with Filipinos posting the longest daily Internet usage at more than 10 hours per day and a thriving services sector where the business process outsourcing (BPO) sector belongs.
Vukovich said demand for fast Internet connection is high in the country, but there are supply issues with the Philippines having among the least reliable service in Asia.
“This supply-demand mismatch presents us with a massive opportunity and several years of runway for continued growth,” he said.
Vukovich further said company executives “believe that the Philippines is at the inflection point” and forecast to “at least triple our fiber penetration over the next five years.”
As of end-June this year, he said Converge ICT has about 730,000 residential subscribers while enterprises account for about 20 percent of total revenues with around 10,000 business subscribers.
Vukovich said proceeds of the IPO will be utilized to further expand their network in the next 18 months to reach about 55 percent of total households nationwide by 2025.
“The primary proceeds raised from this IPO would help us accelerate our growth plans, allowing us to remain at the forefront of capturing this massive market opportunity,” he added.
Meanwhile, Department of Finance secretary Carlos Dominguez III, in his speech during the IPO event on Monday, said Converge ICT’s decision to push through with the IPO “is a strong vote of confidence in [the] economy’s capacity to bounce back strongly after the difficulties wrought by the pandemic.”
He said the government has been pushing for digital transformation to address red tape, hasten the delivery of services, and address corruption. Dominguez said the pandemic accelerated this process since people have shifted to working remotely.
“At this moment, digital technologies have never been more important in our lives. Now, more than ever, we have become heavily reliant on fast and dependable Internet services,” he said.
He encouraged Converge ICT officials to use the IPO’s proceeds to improve its network to cater to more Filipinos. “We will count on your company to help us bridge the digital divide as we purposely move forward to a new economy,” he said. — Joann Villanueva (PNA)