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Converge whips up telco battle

AJ Bajo



The blockbuster Converge ICT Solutions Inc.’s P35.9 billion initial public offering (IPO) in the works could tighten the play in the telecommunications sector for end users’ benefit as envisioned by President Rodrigo Duterte.

Broadband service increasingly becomes indispensable amid the coronavirus disease 2019 (COVID-19) pandemic.

First Metro Investment Corp. vice president and research head, Ma. Cristina Ulang, said Converge ICT’s planned market debut “makes the telco competition livelier.”

Aside from Converge, DITO Telecommunications is aggressively pushing its roll out as the third telco player.

“(It) will favorably bring down cost to end-users. IPO pricing has become secondary to the theme (as the) market is hungry for plays on the so called essential sector theme,” Ulang said.

Philstocks Financial Inc. senior research analyst Japhet Luis Tantiangco shared the sentiment, noting that Converge ICT’s expansion, should the IPO proceed, could “tighten the competition within the telco sector” as it pushes other industry players to further improve their services, to the benefit of consumers.

Where opportunity thrives

“It’s true that we are in turbulent times but one can still raise capital if it sees opportunities within the current situation. Converge ICT belongs to the telco sector which is seen to have a silver lining as the new normal brought by COVID-19 has compelled a shift towards the digital economy. Commerce, education, and other economic activities are tilting towards the digital space. We’re seeing more companies pursuing digital transformation,” Tantiangco said.

Following Injap Sia II-led MerryMart Consumer Corp.’s P1.6 billion stock market debut in June, Converge ICT is braving the turbulent market with a plan to offer 1,301,295,448 common shares at a maximum price of P24 apiece as it looks to raise new funds primarily to ramp up its nationwide fiber network roll-out.

Led by founder and chief executive officer Dennis Anthony H. Uy — different from Davao businessman Dennis Uy — Converge ICT said it is currently the largest and fastest-growing high-speed fixed broadband operator in the country with a market share of 54 percent in terms of high-speed residential fixed broadband subscriptions as of March 2020.