Following the launch of its prepaid fiber Internet product Surf2Sawa in November last year, fiber broadband and technology provider Converge ICT Solutions, Inc. recently introduced a more affordable postpaid broadband product.
Called Bida Fiber, this postpaid Internet product is designed for budget conscious households with a consistent monthly income. It is priced at PhP888 a month, exclusive of equipment and installation charges. Subscribers of this product can get unlimited data access for up to six devices over WiFi at an average speed of 35Mbps.
While Surf2Sawa targets the lower income household market which accounts for approximately 9.3-million households that need a budget-friendly but bearable Internet connectivity, Bida Fiber is offered to lower C and D1 market which need strong Internet connections.
“These new products, Surf2Sawa and Bida Fiber, allow us to provide Internet connectivity to value-conscious families which comprised around 70% households. This also means that Converge now has a complete broadband offering to all market segments, and at the same time, we continue to innovate for our customers,” said Converge CEO and co-founder Dennis Anthony Uy.
Jesus Romero, SEVP and COO at Converge, said that having Bida Fiber and Surf2Sawa arms Converge with a full portfolio of services that can cater to almost all economic class households. “We have been testing them for quite some time and we see there is a massive opportunity for both products. This is a blue ocean market. The targets for these products are those that are not yet connected by fiber specifically wireless broadband users, modem cable subscribers, and mobile data users,” he said.
To apply for Bida Fiber, customers are required to submit two documents (ID and proof of billing) and pay an advanced monthly fee of PhP888, and installation charges.
Romero said the prospects for Bida Fiber are quite positive. “We are looking at the segment below the middle class which is about eight-million households. We are seeing very encouraging tractions on this specific product. Hopefully as the economy improves overtime, it will encourage more non-users to finally try a quality affordable fiber connection.”
Meanwhile, Converge reported a favorable financial performance having an 8% increase in revenue to PhP17.4-billion in the first six months of 2023. This increase was attributed to the growth registered in both residential subscriber base and enterprise business, especially for small and medium enterprises (SMEs).
The sustained growth in the company’s revenue generation was also due to its newly-opened areas particularly in Northern Luzon, the Visayas and Mindanao, which contributed more to its subscriber base.
Uy said the excitement brought about by the announcement of their retail products reflects in the growth of prepaid subscribers which has doubled from the previous quarter. “This gives us the confidence that we’ll hit our target of 120,000 prepaid subscribers by yearend and growth exponentially in the next two years as we expand to more areas and more services group and increase our community partners in Mindanao, contributing more to our subscriber base,” according to Uy.
Total net subscriber additions for residential customers reached 92,000 during the first six months, growing by 5% compared to the same period last year. For the second quarter alone, there were 49,000 residential net additions. The prepaid fiber internet subscribers reached more than 54,000 as of end-June, nearly doubling compared to end-March 2023 level. This brings the total residential subscriber base of Converge to 1.97 million.
“Converge continues to reap impressive results in our effort to bolster the availability and affordability of our fiber internet solutions. We anticipate more opportunities to grow our subscriber base as we innovate products to cater to the demand from specific socioeconomic segments. This is evident in the second quarter subscriber growth – with the prepaid market gaining significant traction,” said Uy.
Meanwhile, Converge Business continued to deliver outstanding growth in the first half of 2023 across all segments. The SME segment continued to lead growth with year-on-year (YoY) revenues increasing by 41.5%, followed by the wholesale segment increasing by 28.6% in the same period. Revenues from large enterprise customers, making up the largest sub-segment, grew by 18.5% YoY.
Converge earned a net income after tax of PhP4.3 billion in the first six months of the year, from PhP3.95 billion in the first half of 2022, representing a net income margin of 24.7%. The company also increased its EBITDA (earnings before interests, taxes, depreciation, and amortization) by 9.5% to PhP10.1 billion in the January to June period, thereby improving its consolidated EBITDA margin to 57.9%.
Meanwhile, Converge remains industry-leading in terms of Return on Invested Capital (ROIC) which improved to 15.4% as of end-June with capital expenditures mostly attributable to the 800,000 new fiber ports deployed. This industry-leading performance is a result of the company’s disciplined approach in deploying capital to expand its fiber network and improve its overall services.
