Fixed broadband operator Converge ICT Solutions (Converge) Inc. concluded March 2024 with a subscriber base of close to 2.3 million, including 2 million postpaid and 160,948 prepaid users. The first quarter of 2024 saw significant growth with 124,793 net additions, marking the highest quarterly increase since Q3 2021.
FiberX contributed significantly with 54,615 net additions, bolstered by a strong upselling strategy targeting hybrid fiber-coaxial customers. Gross additions for the quarter reached 244,670, the highest since the same period in 2021, reflecting robust demand for the company’s broadband services.
Consolidated revenues rose by 10.4% year-on-year to P9.5 billion from P8.6 billion in Q1 2023. The residential sector was a major contributor, growing to P8.2 billion. FiberX outperformed previous quarters with substantial gross additions and reduced churn rates, resulting in the highest net additions since Q1 2022. BIDA Fiber and Surf2Sawa also posted record-high quarterly additions, indicating strong market demand across various income segments.
The company reported improved churn rates, down to 1.82% in Q1 2024, aided by a dedicated churn management team aiming to reduce this figure further. The enterprise segment also saw growth, with revenues increasing by 10.5% year-on-year to P1.4 billion, driven by a 31% revenue surge in the SME subsegment.
Converge’s EBITDA grew by 12.8% to P5.8 billion from P5.2 billion in the previous year, with the EBITDA margin improving to 61.1%. Reduced amortization of deferred contract costs, owing to lower churn, and savings from third-party optimization contributed to these results, despite higher expenses in repairs, maintenance, personnel, and marketing.
Return on Invested Capital (ROIC) rose to 17.4% from 16.3% last quarter, reflecting efficient capital deployment for network expansion. Net income after tax increased to P2.6 billion from P2.2 billion, raising the net income margin to 26.7%.
Converge maintained a strong balance sheet with net debt reduced to P20.1 billion and a debt service coverage ratio of 3.4x. The company’s cash CAPEX for Q1 2024 was P3 billion, underscoring ongoing investments in network and service enhancements.