Converge revenues soar 81.5% to ₱12 B, earnings double to ₱3.3 B

With continued subscriber take-up, high-speed fixed broadband operator, Converge Information and Communications Technology Solutions, Inc. (Converge) revenues soared 81.5 percent to ₱11.781 billion while earnings more than doubled to ₱3.252 billion in the first half of this year versus the same period in 2020.

Overall, revenues from its residential business more than doubled to ₱10.212 billion, driven by an 85 percent year-onyear (YoY) growth in its subscriber base to 1,355,079 which boosted residential average monthly revenue per user (ARPU) by 7 percent.

On the other hand, enterprise revenues grew slightly by 3.8 percent YoY to ₱1,569 million, mostly from the growth in its small and medium enterprise (SME) customer base.

By second quarter this year, Converge captured 47 percent market share of fixed broadband net adds among the country's three largest broadband operators.

This translates to an increase in ite fixed broadband market share from 21% in June 2020 to 29 percent in June 2021.

Reflecting the high demand for fixed broadband connectivity services in the Philippines, the company estimates that 95 percent of its new subscribers in the second quarter were first time fixed broadband users.

Converge completed the first phase of its domestic subsea cable network in the VisMin region in 2Q2020, activating an end-to-end nationwide backbone reaching from northern Luzon to Mindanao.

The company deployed a record 565,848 new fiber-to-the-home (“FTTH”) ports during the quarter, more than twice the number of FTTH ports deployed during the same quarter the previous year.

As of June 30, 2021, Converge’s nationwide network reached more than 8.3 million homes, on track to reach its target to cover approximately 55 percent of households in the Philippines by 2025.

Continued prudence in the management of direct costs, such as international bandwidth and leased line costs and increasing operating leverage enabled Converge to sustain its EBITDA growth.

Converge achieved an EBITDA of ₱6.494 billion in 1H2021, representing an increase of 96.0 percent from 1H2020.

As a result, Converge was able to improve its record consolidated EBITDA margin to 55.1 percent in 1H2021, higher than the 51.1 percent in the same period the year prior.

In September 2020, Converge started to draw down on its international capacity from the Telstra Indefeasible Right of Use (IRU) contract, reducing the need to lease additional international bandwidth capacity.

This, together with prudent management of its other international lease agreements, resulted in a reduction of bandwidth and leased line costs from 9.8% of total revenues in 2Q2020 to 3.8% of total revenues in 2Q2021.