Jun 18, 2020
Pandemic Offers Telco Challenger a Boost in Philippine Rivalry
, Bloomberg News
(Bloomberg) -- The pandemic is giving a Philippine telecommunication company an opportunity to grab market share from its well-entrenched rivals as vast swathes of the population remain stuck at home.
Converge ICT Solutions Inc., which specializes in fiber optic broadband services, saw a record jump in subscriptions in May, Chief Executive Officer Dennis Anthony Uy said in an email interview. New activations surged 150% from a year earlier to more than 50,000, driven by retail and corporate clients like call centers equipping their employees to work remotely, he said.
Converge is accelerating its expansion, and is recasting revenue, spending and subscriber growth forecasts to account for the uptick in demand, Uy said. PLDT Inc. and Globe Telecom Inc. are looking to scale back spending this year amid delays in their network rollout.
The coronavirus pandemic is reshaping the telecommunication landscape in a country with a young, technology-savvy population and an increasing amount of services moving online. The Philippines is home to the world’s heaviest Internet users despite having one of the slowest connection speeds, according to a Hootsuite report.
Other Details
- Converge, backed by a $225-million investment from Warburg Pincus, is betting that broadband penetration will double over the next five years from less than 15% of households today. From a fiber network that is limited to the island of Luzon and covers 2 million households, it plans to expand nationwide by 2021 and boost its international bandwidth.
- “We see a long runway for Converge to continue to grow rapidly,” Warburg Pincus managing director Saurabh Agarwal said, adding that the company saw 75% average revenue growth over the last three years.
- Asked about prospects for an initial public offering, Uy said the company will focus on rolling out its infrastructure nationwide in the immediate term. He also nixed the idea of a merger or acquisition. “At this point in time, we think we can reach our aspirations for scale through organic growth.”
©2020 Bloomberg L.P.
