Fiber internet service provider Converge ICT has received a $250-million investment from US-based private equity Warburg Pincus to finance a nationwide expansion.
The investment of roughly P12.8 billion finance Converge ICT’s roll out of more fiber connection across the Philippines, the company said.
This is the Warburg Pincus’ first investment in the Philippines.
One of the world’s biggest equity firms, Warburg Pincus has $20 billion invested in Asia and about $65 billion of assets under management.
Converge ICT has been aggressively expanding its fiber infrastructure to provide “… Filipinos access to the more reliable fiber internet connection.”
“Since going full throttle with our fiber network roll-out and package offerings, the change in overall Philippine performance has been noticeable,” Dennis Anthony Uy, founder and president of Converge ICT, said.
“In 2018, the average connection has risen to 18 Mbps. We don’t take full credit but the company’s contributions have been undeniable,” Uy said.
Warburg Pincus managing director Saurabh Agarwal said the equity firm is banking on the Philippines’ young and digital-savvy population.
“Converge ICT is a remarkable business and growth story and I am confident that it will continue to achieve significant growth milestones and solve the ever-increasing connectivity needs of the country,” Agarwal said.
Converge ICT is looking at capturing 30% of the country’s broadband market in the next few years.
With Warburg Pincus’ $250-million investment, Converge ICT said it will be able to fast track the construction of a $1.8-billion nationwide internet backbone.
The rollout includes a $70-million domestic submarine cable with 20 landing stations across the Philippines.
The Luzon backbone is expected to be completed by the first quarter of 2020.
“Converge ICT is the only pure end-to-end fiber internet provider in the country with all-in house capabilities,” Uy said.
“We have been investing heavily on innovations that would move the broadband market forward so we can be on par with our neighbors. We have rolled out 400 Gbps per channel in the past,” he added.
The company is also looking at doubling its half-a-million subscribers by next year.
The choice of Warburg Pincus to stream fresh funds into Converge ICT is due to the equity company’s deep understanding of the business and expertise, the fiber internet service provider said. —Ted Cordero/VDS, GMA News