the Outsider - PSE Points to Ponder

  Philippine broadband provider spent ₱5.7 billion on capital expenditures in the first half, while slower growth and rising costs pressured earnings Converge ICT Solutions Inc. continued pouring money into its fiber network during the first half of 2026, betting that broader coverage will eventually produce new customers and recurring revenue even as the company’s profitability weakened. The Philippine broadband provider spent about ₱5.7 billion on capital expenditures and intangible assets during the six months ended June, more than double the roughly ₱2.6 billion spent in the comparable period a year earlier. Much of the investment supported continued network expansion, including Converge’s effort to deepen its presence in the Visayas and Mindanao and build approximately 900,000 additional fiber ports during the year.  That spending underscores Converge's central challenge. The company must continue building infrastructure to secure future growth, but the financial returns...

The market has stopped treating Converge as a fast-growing broadband compounder and started pricing it like a maturing telco. That de-rating is understandable—but with strong fibre assets, high margins, positive operating cash flow and manageable leverage, the sell-off may have gone too far. There are two ways to lose money in a growth stock. One is for the company to fail. The other is for the story to change. Converge ICT Solutions has not failed. Far from it. The company remains one of the Philippines’ most important fixed-broadband infrastructure owners, with a nationwide fibre network, strong operating cash generation, high margins, modest leverage and a fast-growing enterprise arm. Yet its share price has behaved as if something more terminal has happened. The reason is subtler: CNVRG has stopped looking like a pristine “fast-growing pure-play fibre broadband compounder” and has started looking like a maturing broadband operator wrestling with falling ARPU, heavier capital expend...

In the Philippine telecom market, the contest for investors’ loyalty has long been measured in signal strength, subscriber counts, and fiber kilometers. But in 2026, another battlefield is taking shape: the dividend crown . On one side stands Manuel V. Pangilinan , the “MVP” of Philippine corporate life, whose PLDT Inc. remains the country’s telecom cash machine—large, entrenched, and disciplined in its dividend framework. On the other hand is Dennis Anthony Uy of Converge ICT Solutions Inc., whose younger fiber challenger is beginning to look less like a growth-only broadband insurgent and more like a credible dividend-growth story. Their first-quarter 2026 results tell a nuanced story. PLDT looks better equipped to defend its dividend. Converge looks better placed to grow one. PLDT: The incumbent with the cash engine PLDT’s first-quarter numbers still carry the heft of an incumbent. Revenue rose 2% year-on-year to ₱56.5 billion , while EBITDA increased 2% to ₱28.3 billion , with EBI...

Dennis Uy’s Converge ICT Solutions Inc. is beginning to look more like the kind of telecom infrastructure company Philippine investors have seen before: one that borrows to fund network expansion while continuing to reward shareholders with generous dividends. The resemblance is not exact. Converge remains far less leveraged than PLDT Inc. was during its heavier investment cycles, and its enterprise and data-center ambitions suggest it is still in expansion mode rather than simply defending a mature franchise. But its first-quarter 2026 results show a capital allocation pattern that is becoming harder to ignore: free cash flow fell short of dividends, debt increased, and management continued investing for growth. Converge reported ₱11.19 billion in revenue for the first quarter of 2026, up 4% year-on-year from ₱10.80 billion . Net income, however, was essentially flat at ₱3.02 billion , while earnings per share stayed unchanged at ₱0.42 .  That combination — modest revenue growth...