Written by Linda B. Bolido
The COVID-19 pandemic might have caused a major disruption to almost every aspect of life in the Philippines but it did hasten the adoption of digital technology.
Even people who had apprehensions about the safety and security of conducting business and other essential activities online, like banking, shopping, even schooling, had to take a crash course on how to do things virtually.
Prior to the pandemic, the focus was mainly on the building of real roads and bridges to ease traffic in urban centers, particularly Metro Manila. As 2020 forced people to shelter at home and avoid venturing outside unless necessary, the spotlight was suddenly trained on the woeful lack of reliable and accessible digital infrastructure in the country.
“Digital access is no longer a privilege of a few but a right of everyone. This digital highway of Converge is the key to that dream. We will continue to work hard until every Filipino, no matter where they are or what economic class they belong to, will have access to fast, stable and reliable connection.”
Dennis Anthony Uy
Converge CEO and Co-Founder
Both the government and private sector were not fully investing in digital infrastructure. Before COVID-19, fixed broadband penetration rate in the Philippines was less than 20 percent, way behind the figures in other parts of Southeast Asia.
Dennis Anthony Uy, chief executive officer and co-founder of Converge ICT Solutions Inc., saw the urgent need to fill the gap. So Converge set out to build the infrastructure that will meet the growing demand for connectivity resulting from COVID-19 and bring the Philippines’ digital experience at par with neighboring countries.
Building the digital highway
Converge has now completed its domestic subsea cable network that connects the submarine segment with its pure fiber terrestrial backbone and will link the whole Philippine archipelago—Luzon, Visayas and Mindanao. Uy said, “The country’s most advanced digital infrastructure—which we call our national digital highway— is finished.”
In April 2021, Converge completed connecting Visayas and Mindanao to its national fiber backbone with the landing of its submarine cables in Cagayan de Oro.
The Converge National Digital Highway is the fiber backbone connecting all the major islands across the country. With this in place, Converge can already fan out to the provinces, and serve more than half of the Philippines’ population.
The telecommunications company earlier landed its cables in the Visayas in San Remigio in Cebu province. The telco also linked other islands in the Visayas, such as Panay, Negros, Leyte and Bohol to its national backbone through the domestic submarine cable project.
In September 2021, Converge’s domestic fiber backbone of 90,000 kilometers passed through some 440 cities and municipalities nationwide and brought broadband service to new markets including Iloilo, Cagayan Valley and Cagayan de Oro.
The telco’s total number of residential subscribers reached nearly 1.6 million at the end of September 2021, double compared to the same period the year before.
“We’ve achieved a record rollout of 654,188 ports in the third quarter of 2021 alone, [proof of] the robust demand we continue to see throughout the country,” Uy said.
The telco deployed nearly 5.5 million ports in October 2021. Converge completed in November 2021 its domestic subsea cable project connecting all major islands of the Philippines to its national fiber backbone. With the completion of the digital highway, Converge is getting closer to its dream of bringing internet access to every Filipino home.
“Given the shift of every activity to the online space, access to the internet should no longer be a privilege but should be a right of every Filipino. The social and economic benefits that connectivity [particularly broadband] unlocks have to reach those at the margins [of society],” Uy said.
Painting the nation purple
Through the #PurpleNation (purple is the telco’s official color) campaign, Converge signaled its nationwide presence, opening over 20 new business centers across the country, including Laoag City; Candon, Ilocos Sur; La Trinidad, Benguet; Tuguegarao, Cagayan; Bayombong, Nueva Vizcaya; Gapan, Nueva Ecija; Valenzuela and San Juan Cities; Batangas City and Lemery, Batangas; and Imus and Dasmariñas, Cavite; Sorsogon City; Iloilo City; and Cagayan de Oro and Davao City.
Uy said the pure fiber operator’s swift port deployment was meant to reach more unserved and underserved areas of the Philippines to achieve the company’s goal of covering 55 percent of Philippine households with high-speed fiber connectivity by 2023.
Converge’s digital infrastructure uses world-class technologies from countries that are market leaders in broadband, like South Korea and Singapore. The fiber optic submarine cables are provided by a French supplier Nexans Group and the active optical equipment come from various reputable global suppliers.
“We are partnering with the best in the world to bring the latest technologies to the country, as we aim to provide our customers with a better internet experience,” said Jesus Romero, chief operations officer of Converge.
He added that Converge’s fiber-fast broadband services would also support the recovery of micro, small and medium enterprises (MSMEs) in the Visayas and Mindanao.
The telco earlier introduced Converge FlexiBIZ that lets MSMEs use pure fiber connection, to allow value-for-money internet service. Through the service, businesses will be able to experience higher internet speeds during a preset time of the day, depending on an enterprise’s chosen plan.
Converge also launched its groundbreaking Time of Day product that allows residential subscribers to choose the time of day when they can double their speed with just an additional P399 a month to their base plan.
The best in fiber technology
Uy said, with the fiber backbone connecting all the country’s major islands, connectivity could be brought to more provinces and more than half of the Philippine population could be served immediately. The pure fiber digital highway, he said, was “world-class, resilient and high-speed.”
Converge gave the assurance that its “highway capacity,” or data transmission capability, was the most advanced in the industry. The company’s state-of-the-art infrastructure and data carrying capacity would enable it to meet the needs of any sector—from MSMEs in need of a stable connection, to an entire government department handling massive amounts of national data.
Uy added that built-in redundancies in their system ensured almost uninterrupted connectivity and would prevent annoying and inconvenient outages in serviced areas.
Describing the Converge network as “resilient against outages and service interruptions,” Uy added, “With the way our network is designed, we have achieved a level 2 redundancy. That simply means we have a layered protection against network failures.”
Uy said the completed network redundancy ring in Mindanao would significantly reduce the chances of service outages as there would be an alternative network route in place.
Investing on digital infrastructure and bringing connectivity to most Filipinos are earning significant dividends for Converge. The company reported a net income of nearly P5.2 billion at the end of September 2021, more than double the about 136-percent growth of over P2.2-billion net earnings for the same period the year before.
Strength in numbers
With strong and continued subscriber takeup, the consolidated revenues of the company grew by 76.4 percent year-on-year to P18.8 billion in the first nine months of 2021. Revenues from the residential business grew by 94.6 percent year-on-year, almost doubling to P16.4 billion during the nine-month period.
Residential average monthly revenue per user remained steady at P1,346. Converge business revenues grew by 8.5 percent year-on-year to P2.5 billion, mostly from MSMEs, continuing the reversal trend seen in the second quarter of 2021.
With increased scale and cost management initiatives, Converge once again achieved a record Ebitda (earnings before interest, taxes, depreciation and amortization) of P10.37 billion in January-September 2021, representing an increase of 86 percent from the same period in 2020. As a result, Converge was able to improve its record consolidated Ebitda margin to 55.1 percent during the nine-month period, higher than the 52.2 percent a year ago.
“We are able to balance the company’s financial performance with the operational expansion, leading us to achieve an industry-leading trifecta in revenues, income, and return on capital throughout 2021,”
Grace Y. Uy
Converge Co-Founder, President and Chief Resources Officer
“We are able to balance the company’s financial performance with the operational expansion, allowing us to achieve an industry-leading trifecta in revenues, income and return on capital throughout 2021,” said Grace Uy, president and chief resources officer of Converge.
Converge continued to lead the industry in the efficient use of resources for investments with its Return on Invested Capital further improving to 21.7 percent at the end of September 2021. This best-in-class performance is a result of
Converge’s record net profits during the period and its consistently disciplined approach in deploying capital to expand its fiber network and tracking key capital efficiency indicators such as port utilization ratios.
But more than the financial gains, Uy saw the completion of the digital infrastructure as a way to hasten the democratization of connectivity and giving every Filipino, regardless of economic standing, access to digital technology.
“Digital access,” Uy said, “is no longer the privilege of a few but the right of everyone … We will continue to work hard until every Filipino, no matter where he or she is or what economic class he or she belongs to, will have access to fast, stable and reliable connection.” —CONTRIBUTED INQ
To know more about Converge, log-on to www.convergeict.com.
ADVT