Converge ICT eyes IPO in next 5 years

By Denise A. Valdez, Reporter
CONVERGE ICT Solutions, Inc. said it is looking to tap more sources of funding for its expansion plans, which includes an initial public offering (IPO) within the next five years.
Converge Chief Operating Officer Jesus C. Romero told BusinessWorld that Converge remains bullish on the telecommunications industry in the country.
“So far we’ve been making a profit every year. Kaya lang ngayon [But now], to really become a solid player, we do need to spend more money. That means also expanding our sources of funding,” he said on the sidelines of a company event at the Edsa Shangri-La hotel in Mandaluyong on Dec. 5.
At present, Mr. Romero said the fiber internet provider is getting most of its funds from vendor financing, supplier credit, some loans and equity.
“We plan to list because one, it’s an obligation, and also to unlock the value of the company. But probably not next year. We need to do a lot more work to make the company more attractive to investors,” he said, adding that he hopes the company’s IPO will be done in the next five years or less.
“I think right now we’re already attractive, but I think if we can continue to double every year, our value increases,” Mr. Romero said.
Last August, Converge chief executive officer Dennis Anthony H. Uy told reporters the company was hitting above P5 billion in revenues so far this year. He said last year’s revenue was above P2 billion.
Mr. Romero said revenues are driven by mostly enterprise customers, but residential customers provide the largest volume.
“You really have to watch your costs. Our 25 Mbps (megabits per second) plan is the best in the industry, it’s only P1,500. It’s not as if we’re making a lot of profit on that. We make profit when we have volume, and we provide a stable service,” he said.
Mr. Uy had said Converge has about 200,000 subscribers as of August, and the target is to reach 7 million in five years.
Mr. Romero said the subscriber base is set to double by the end of this year from last year, and the target for next year is to double the figure again.
Converge committed to a five-year, $1.8-billion investment for its nationwide rollout in August, partnering with South Korea’s KT Corp., US-based Tyco Electronics Subsea Communications LLC (TE SubCom) and local firm Fibernet Konstrukt Corp.