DITO, Converge ICT Agree on Assets-Sharing Deal—What Does It Mean?
Both Converge ICT CEO Dennis Anthony Uy and DITO CEO Eric Alberto have been asked if a merger is on the horizon due to the agreement.
Telecom companies Converge ICT Solutions Inc. and DITO Telecommunity Corp. have announced that they have entered a Master Facilities Provisioning Agreement (MFPA). According to a press release from Converge, the agreement allows both companies “to share select terrestrial and submarine fiber optic cable assets, under terms and conditions to be mutually agreed upon by Converge and DITO Telecommunity.”
“This resource exchange arrangement will strengthen the network of both operators as it translates to expanded coverage and increased redundancy,” the company adds. “At the same time, it will create savings from increased operational efficiencies and reduced capital expenditure requirements.”
Master Facilities Provisioning Agreement, in Layman’s Terms
The MFPA agreed upon by Converge and DITO can simply be referred to as an assets-sharing deal. According to a report by Unbox PH, what this means is that “they will complement each other’s services to improve overall reliability and network performance.”
Per Converge’s press release, DITO has over 7,000 cell sites reaching in the country. This allows them to reach over 80% of the population located in over 850 cities and municipalities. 9.5 million activated subscribers are now enjoying DITO’s services.
As for Converge, its total fiber assets have reached 682,000 fiber kilometers that pass over 16.7 million homes. This has allowed the company to reach a household coverage of 62.3% of the total households in the country.
Is a Merger on the Horizon?
Given the assets-sharing deal that both companies entered, speculations have arisen regarding a potential merger between the two. Furthermore, it has likewise been speculated that Converge may expand to the mobile business industry.
Both rumors have been denied by Converge CEO Dennis Anthony Uy and DITO CEO Eric Alberto.