Converge eyes new unit to raise asset utilization

MANILA, Philippines —  Broadband provider Converge ICT Solutions Inc. may spin off its fiber backbone by as early as this year to maximize the nine million ports it had built across the Philippines.

Converge president and co-founder Maria Grace Uy yesterday said the company is evaluating the possibility of creating a new unit in charge of co-sharing its fiber network.

She said Converge may proceed with the plan either this year or in 2026, if company executives find that it makes financial sense for shareholders

However, Uy said everything is still in the exploratory stages, noting that such a move has never been done locally. She added that Converge has a lot of factors to consider before it can spin off its fiber infrastructure.

In March, Bloomberg reported that Converge is eyeing to carve out its fiber network, which could be valued at as much as $1 billion. Afterward, the internet service provider would sell a minority stake of up to 40 percent in the new unit, with the Uys keeping the majority share.

Converge chief financial officer Robert Yu said such a strategy would make operational sense for the company, as it will ultimately drive up the utilization rate of its fiber ports.

Yu also said this is not the first time that Converge is exploring ways to raise business efficiency, recalling that in 2024 the company started sharing its broadband assets with Sky Cable Corp.

Echoing Uy’s sentiment, Yu said the only question that remains unanswered for Converge is if it would bring financial returns for the company to spin off its fiber backbone.

As of March, Converge is far from maximizing the nearly nine million fiber lines in its portfolio. The company reported a utilization rate of 34.4 percent, with a subscriber base of 2.7 million.

In spite of this, Converge remains one of the fastest-growing connectivity players, booking an 18-percent growth in profit to P3.02 billion in the first quarter, from P2.55 billion a year ago. Revenue surged by 13 percent to P10.8 billion due to the double-digit expansion of its residential and enterprise segments.

Converge is also keeping its foot on the gas in terms of network upgrade, allocating P20 billion to P25 billion for capital expenditures.

Converge is scheduled to activate this year two subsea cable systems – Bifrost Cable System and South-East Asia Hainan-Hong Kong Express Cable System – that would amplify its international capacity for data transfer.