Dennis Anthony Uy’s Converge scales back expansion to avoid borrowing more money amid rising interest rates

Fiber internet provider Converge ICT Solutions is trimming its capital expenditures for the year to avoid falling into a debt trap amid higher interest rates.

Converge said it is slashing its capex by P5 billion from its initial guidance of P26 billion to P28 billion.

The adjustment is being made on the back of the firm’s accelerated network rollout

In line with this, Converge has also lowered its target for the number of its residential subscribers by yearend from 2.4 million to 2 million.

As of end-June, Converge had a total of 1.817 million residential subscribers nationwide.

Converge said “strong demand for reliable high-speed broadband will result in continuous growth of our residential subscriber base to approximately two million by the end of 2022, lower than our initial guidance of approximately 2.4 million, due to higher than expected churn in the first half of 2022.”

The revised outlook for its residential business is expected to result in a 25 to 30 percent growth in subscribers this year.

In the first half, Converge maintained strong profitability driven by increased scale and prudent cost management.

Net income grew by 21.5 percent to P3.95 billion while revenues jumped by 36.3 percent to P16.05 billion.