The Philippines’ only pure-play high-speed fixed broadband operator, Converge Information and Communications Technology Solutions, Inc. ended 3Q2021 with 1,576,759 residential subscribers, a 75% increase from 3Q2020. The Company’s dual pronged strategy of Go Deep and Go National have resulted to another record high of net adds during 3Q2021. As the fastest growing fixed broadband operator in the Philippines, the Company deployed another record number of new fiber-to-the-home (“FTTH”) ports during the quarter at 654,188. As of September 30, 2021, Converge’s nationwide network reached more than 9.6 million homes, on track to reach the Company’s accelerated target to cover approximately 55% of households in the Philippines by 2023, 24 months earlier than projected during the Initial Public Offering last year.
Here are Converge 3Q2021 Key Highlights:
- Converge continues to deliver significant growth and profitability in 9M2021 from the same period last year with 76.4% YoY revenue growth and 86.0% YoY EBITDA growth
- EBITDA margins expanded from 52.2% in 9M2020 to 55.1% in 9M2021, maintaining our record EBITDA margin during the first half of this year
- Net income after tax more than doubled YoY from P2,190 million in 9M2020 to P5,198 million in 9M2021
- Residential revenue grew 94.6% YoY driven by record high net subscriber growth
- 3Q2021 residential subscriber additions at record high both on a gross and a net basis (net of churn), with almost 280,000 gross and more than 221,000 net subscriber additions over the last three months
- Record FTTH port roll-out of more than 654,000 in 3Q2021 resulted to 37.6% household coverage across the Philippines and 57.3% household coverage in Luzon
- Maintained industry leading ROIC of 21.7% in 9M2021
- Implemented free speed boosts to all fiber plans in celebration of the Company’s IPO anniversary, cementing Converge’s position as high-speed broadband leader in the Country
(Clockwise) Converge executives during the virtual press conference with Dennis Anthony Uy, CEO and Co-Founder; Matthias Vukovich, Chief Financial Office Advisor; Jesus C. Romero, Chief Operating Officer; and Grace Uy, President and Co-Founder
Speed Upgrades to all Residential Fiber Plans to Celebrate Reaching the 1.5 Million Residential Subscriber Milestone
To celebrate the Company reaching 1.5 million residential subscribers as of end of 3Q2021, Converge gave free speed upgrades to all existing subscribers effective November 9, 2021, which are also extended to new subscribers. This is on top of the speed increase implemented last December 2020 for reaching its one million subscriber milestone. This strengthens Converge’s commitment to provide better quality broadband service with the best value. With up to four times the speeds, the Company’s subscribers will be much more equipped to adapt to the rapid transition to the digital lifestyle – including leisure, work, and education.
This holiday season, three new FiberX plans are set to roll out — starting with Plan 1500 for 50 Mbps
with an exclusive add-on for 10Mbps for only P99, Plan 2500 for 300 Mbps, and Plan 3500 for 800 Mbps, making Converge now unmatched in the Philippine telecommunications industry as the most affordable internet plan.
Expansion of Backbone Network to 440 Cities and Municipalities Nationwide and Completion of the Nationwide Subsea Cable Network
More than 13,000 kilometers of fiber optic cable were added to our backbone during 3Q2021 – the longest quarterly expansion of our backbone so far. As of September 30, 2021, our backbone has now expanded to almost 90,000 kilometers from almost 76,500 kilometers last quarter. Our network has now passed through around 440 cities and municipalities nationwide, extending our services to new areas including Iloilo, Cagayan, and Cagayan de Oro. In the coming weeks, the Company will also have its soft launch in Mindoro and Butuan City. During the third quarter, Converge also reached the shores of Palawan, where the Company plans to soft launch its services in the coming months.
The Company also completed its domestic submarine cable project that connects the country’s major islands from Luzon to the Visayas and Mindanao to its national fiber backbone. The 1,800 kilometer subsea cable made its final landing in Coron, Palawan.
The subsea cables that connect to the domestic backbone of Converge are laid out in a way that there is redundancy in the network, assuring service availability even in the case of fiber cuts.
Converge interconnected Visayas and Mindanao during Phase 1 of its domestic subsea backbone rollout, first landing in Bogo, Cebu and Cagayan De Oro. Then in Phase 2, re-entered Visayas through Roxas City, Capiz in Panay Island and Mindanao through Buenavista, Agusan del Norte – closing the loops in its network. This is supported by 20 cable landing stations across the archipelago.
Continued Investment in Network Upgrades to Deliver Best Results
Beyond expanding our network to reach an increasing number of households in the Philippines, Converge is actively investing in network equipment upgrades and backbone network redundancies to ensure reliable services to its customers.
During the quarter, the Company has completed its North Luzon fiber optic loop that ensures improved reliability and availability of service in the region. This loop makes the network in the region completely redundant, which ensures continued service in case there’s an interruption in one part of the network.
As part of strengthening its foothold in North Luzon, Converge said it is set to finish the total fiberization of Pangasinan and La Union this month as it reaches the major cities and municipalities in these provinces where broadband services are urgently needed.
With these improvements in place, Converge was able to deliver superior network availability for its subscribers. During the third quarter of this year, outage.report/ph reported that Converge experienced less than 500 network outages per month. Though the average number of outages per month is less than half of the outages of our closest competitor, Converge is focused on further reducing outage incidents to enhance customer satisfaction.
Key Enterprise Business Wins in 3Q2021
Converge secured multiple enterprise business contracts during the last three months resulting in a 8.5% YoY revenue growth of the Enterprise Business. One key growth driver came from our Enterprise Wholesale business, where Converge is re-selling bandwidth capacity on its local and international fiber cables to enterprise and telecom clients on a wholesale basis.
Converge incorporated Converge ICT Singapore Pte. Ltd., a wholly owned subsidiary in Singapore in the third quarter of this year. The subsidiary which will focus on the marketing and selling of international cable capacity for our wholesale business. As Converge is increasing its investment in local and international cable systems, we expect that the Enterprise Wholesale business will represent an important growth driver of our Enterprise Business.
Cloud Connectivity Services Now Offered to Enterprise Customers
Following the launch of Converge Business, which will be the Company’s umbrella brand for all business connectivity, data transport, and other ICT solutions for SMEs, conglomerates, and large enterprises, Converge also introduced cloud connectivity services for its Converge Business customers.
The Cloud Upload Booth allows customers to upload large files into cloud service provider platforms, at a working space located at Reliance IT Center in Pasig City. This removes the need to go to cloud regions such as Singapore just to upload large files. Users would have access to a Windows PC with a LAN-based internet connection of 10Gbps.
The Cloud Direct Connect, meanwhile, is a service that would connect the enterprise customer’s local IT infrastructure to a cloud service provider. This link is done in partnership with global firm Equinix, without crossing the internet.
Continued Commitment to Improving Customer Experience
The Company continues to commit to providing quality customer experience for both existing and potential new subscribers. Converge continues to be highly focused on enhancing the overall customer experience by strengthening our customer care functions and digitizing the journey of our customers.
In 3Q2021, Converge installed more than 93% of new NCR subscribers within seven days and 60% within one day of application, respectively.
With the ongoing regional expansion, the Company launched its One Nationwide Cellular Hotline aimed for subscribers outside Metro Manila to avoid incurring long distance charges. Through this cellular hotline, any subscriber from anywhere in the Philippines can reach the Company’s contact agents without a need for a fixed telephone line.
Additionally, Converge launched self-service kiosks in its business centers in Luzon to reduce queue time of customers. This platform has multiple functionalities, including a click-to-call function that allows customers to interact directly with a Company representative without the need to line up inside the business center. Also, this kiosk can also assist customers in new line applications, viewing latest bills, raising tickets for technical complaints, and other aftersales requests.
Strengthened Commitment to Environmental, Social and Governance with Established Roadmap
Since the start of the year, Converge has been working on the Company’s Sustainability Framework that goes beyond compliance reporting. The framework will underscore our commitment to ensuring that the Company adheres to global standards in environmental, social, and governance best-practices.
The Company has established its Sustainability Roadmap with an organization structure that defines the key roles of the management team. With the Sustainability Commitment, Pillars, and Principles as building blocks, the Company has developed relevant short, medium, and long-term targets for key metrics.
