Friday, June 21, 2024

Converge ICT sees prepaid subs overtaking postpaid users in few years

Fiber broadband provider Converge ICT Solutions said during its quarterly briefing on Thursday, May 11, that it is anticipating the number of its prepaid subscribers will eventually surpass its postpaid user base.

Converge ICT founder and CEO Dennis Anthomny Uy being interviewed by the media during the recent launch of the company’s fiber optic network in Boracay

Converge ICT chief operating officer Jesus Romero said the market for prepaid broadband Internet is so huge that the company is expecting to acquire 7 to 8 million new subscribers in the next three to five years.

Early this year, the company introduced its prepaid offering called Surf2Sawa aimed at the lower-income market, which covers approximately 9.3 million households.

Surf2Sawa is a prepaid fiber-to-the-home plan of Converge for Filipinos looking for “sachet” or “tingi” offerings, with various top-up options such as P700 for 30-day unlimited connectivity, P380 for a 15-day subscription, P200 for a seven-day unlimited Internet, and P50 for a one-day subscription.

As of the first quarter of 2023, Converge said it has a total of 1.9 million postpaid and nearly 30,000 prepaid Surf2Sawa fiber-to-the-home (FTTH) subscribers.

During the media briefing, Converge co-founder and CEO Dennis Anthony Uy also said he was not bothered by the impressive performance of satellite broadband firm Starlink.

Users of Starlink in the country logged a mdian download speeds of 110.78 Mbps during teh first quarter of 2023 — a faster option than all fixed broadband providers combined, according to Internet metrics firm Ookla.

“It won’t eat our market share because satellite broadband is complementary to our offerings. It makes sense to have satellite Internet in remote areas and also during disasters, but not in urban areas where we are already present,” Uy said.

Romero, for his part, said the fast speed posted by Starlink could be attributed to the fact that there are still very few subscribers of its service in the country.

“We all know that as the subscriber base grows, the speed will also slow down. This in unlike in our case where our speed remained consistently fast even as it measured from our users who are in the millions,” Romero stressed.

For its financial performance, Converge reported a double-digit consolidated revenue growth of 11.5% to P8.6 billion from January to March this year compared to the same period last year, driven by its industry-leading subscriber acquisition and thriving enterprise business.

The company’s enterprise revenues reached its highest growth rate since 2020 this quarter, surging 32.4% year-on-year to P1.2 billion in the first quarter of the year on the back of robust overall growth across all subsegments — small and medium enterprises (SMEs), large enterprises and corporates, and wholesale.

“Our commitment to providing world-class broadband services, coupled with our strategic investments in our network infrastructure, has enabled us to post positive first-quarter results. Converge is well-positioned to be the preferred Internet service provider of customers as we continue to focus on reaching the unserved and underserved markets,” said Uy.

This quarter, Converge achieved a quarterly EBITDA (earnings before interests, taxes, depreciation, and amortization) of P 5.2 billion, a 13.5% increase from the previous year.

Consequently, its consolidated EBITDA margin improved to 59.9%, fueled by growing scale, proactive cost management, and judicious monitoring and recognition of contract costs of active subscribers.

Its net income after tax also grew 11% to P2.2 billion, resulting in a net income margin of 25.1% for the first quarter of 2023.

Converge is anticipating more opportunities for subscriber growth in the coming years, bolstered by its expansion into the Visayas and Mindanao regions.


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