‘International cable systems will boost Converge profits’

Converge ICT Solutions Inc. anticipates that its investments in two international cable systems will account for a “single-digit” percentage of its overall profits, recouping its investment of “hundreds of millions of dollars.”

Dennis Uy, the company’s CEO, said the company plans to sell its excess capacity in the Trans-pacific Bifrost Cable System and the Asia Pacific SEA-H2X Submarine Cable System.

“We’re going to wholesale our capacities. If you put more capacity in the future, the Philippines becomes a hub. You need to sell the capacity to other regional [players],” he said at the sidelines of Ookla’s awarding ceremonies, where Converge bagged four awards.

Uy added that since Converge invested “hundreds of millions of dollars,” the company anticipates that they will contribute to the company’s bottomline. When asked how much the contribution will be, Converge COO Jesus Romero said it should account for “single digit at the minimum” of the company’s net profits.

“Hard to say how big international would be. Because if Bida and S2S explode, that takes up a bigger part,” he said.

Romero said the two cable systems should be done within the fourth quarter or towards the first quarter of 2025.

Connecting Singapore, Indonesia, and the Philippines to the West Coast of North America, the Bifrost Cable System will span over 15,000 kilometers and will deliver capacity to “support the booming digital connectivity needs of the Asia-pacific region and provide a critical, direct link with North America.”

Meanwhile, the SEA-H2X cable system encompasses a minimum of eight fiber pairs connecting Hong

Kong to Singapore, boasting a robust design capacity of 160 Tbps to effectively address the escalating bandwidth demands within the region.

Converge’s net income for 2023 rose 22 percent to P9.1 billion from the previous year’s P7.4 billion on the expansion of its subscriber base. Revenues grew by 5 percent last year to P35.4 billion from P33.7 billion in the previous year as its residential business went up to P30.3 billion.

It registered an all-time-high quarterly gross adds of 29,844 and 38,810, for its postpaid and prepaid lines, respectively.

Due to upcoming international subsea cable payments, the inclusion of capital outlays for data centers, and delays in supplier invoices earmarked for 2023 payment, the company said it will spend P17 billion to P19 billion in capital expenditures this year, up from last year’s P9 billion.