MANILA, Philippines — Converge ICT Solutions Inc. is on to a white-hot start to the week on Monday after confirming rumors of talks with American tech magnate Elon Musk's SpaceX for a possible broadband satellite deal.
Shares in the company of Pampanga-based businessman Dennis H. Uy surged 20% at the opening bell to P20 each before paring some gains to 5.86% increase at P18.8 apiece as of 12 noon. Trading is still ongoing as of this posting and will end 1 p.m.
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The knee-jerk rally in early trade came after Converge confirmed reports over the weekend that it the firm is negotiating a deal with Space Exploration Technologies Corp., the private rocket company founded by Musk, as it looks for possible sources of satellite technologies "to bring highspeed broadband to far-flung areas in the country."
"However, it is still very premature to talk about a possible partnership between Converge and SpaceX at this stage as suggested in the abovementioned news reports," Converge told the stock exchange.
SpaceX is still in the process of testing its satellite-based broadband service Starlink, which seeks to offer high-speed Internet to customers in rural areas around the world. Starlink is part of Musk's broader plan to pursue his dream of sending colonials to Mars.
Musk, who co-founded American electric car company Tesla Inc., ranked as the world's richest man on Forbes magazine's latest billionaires list.
Converge did not go into details of the negotiations, the outcome of which would boost Uy's ambition of expanding his company's network beyond Luzon to cover the entire archipelago. Currently, the Warburg Pincus-backed firm is targeting to reach over 15 million homes, representing 55% of local households by 2025.
At the current rate, the company appears to be in for an uphill climb toward that target. Last year, Converge managed to more than double its residential subscribers, but in absolute terms that only translated to over a million residential customers five years before its self-imposed deadline. The network's fiber reach also expanded 28,300 kilometers, a 107% uptick year-on-year.
Converge clearly benefited from a rush in shift to remote working and schooling that saw a dramatic surge in broadband needs. At the same time, the company has been at the consistent end of criticisms from netizens complaining of bad internet connection in numerous instances for the past months.