Fiber broadband operator Converge ICT ended the first quarter of 2022 with 1,802,202 residential subscribers, a 52.5% increase from March 2021.
The company said it deployed 643,528 new fiber-to-the-home (FTTH) ports during the first three months of this year, which is said to be fastest among the local players in the industry.
As of March 31, Converge’s nationwide network reached more than 12.2 million homes, representing a 47.3% household coverage, on track to reach its accelerated target to cover approximately 55% of households in the Philippines by 2023.
However, churn rates grew by 1.47% in in the first quarter, higher than the 1.16% in the same period last year. Converge said it has been implementing various controls and measures to manage churn, including stricter onboarding requirements in selected areas with high churn blacklisting of previously delinquent subscribers, and implementing a payment reminder pop-up on browsers of subscribers with overdue bills.
“Reflecting the high unserved demand for fixed broadband connectivity services in the Philippines, we estimate that [around] 95% of our new subscribers nationwide in 1Q2022 continue to be first time fixed broadband users,” the company said in a statement.
The broadband firm also said that its investment in a basketball team franchise in the Philippine Basketball Association (PBA) would bring immense exposure to the company.
“With basketball being the leading national sport in the Philippines, having a consistent broadcast of the team’s games and activities aired nationwide through various print, radio, and television channels poses as a valuable and effective marketing investment,” Converge said.
Converge’s upfront investment amounted to around P100 million paid to the league and the previous franchise owner, Alaska. Annual net operating costs of having the franchise is at a maximum of P200 million, covering fixed costs (mostly salaries and wages) and bonuses assuming the team wins the championship for all conferences during the season.
“Based on a detailed bottom-up assessment of media value across channels (TV, online, print, offline), we expect to create P2,300 million in media value in year one of our investment, representing more than 10 times the annual expenses required to operate the team. The media value is computed as the cost of employing other marketing channels to reach the same level of audience engagement,” the company said.
“The annual operating cost of around P200 million represent 15% of total marketing and promotions budget for the year. This will replace other less efficient marketing initiatives, therefore, not increasing the expected marketing expenses for the year,” Converge added.
Since the announcement of the acquisition, Converge said it has been highly searched for in social media and search engines. “Converge was a trending topic on Twitter on the day of the announcement. Converge was also the #1 searched word in Google in the Philippines for the first two days of the report,” it noted.
