PHILIPPINE DIGITAL infrastructure will come in for a wave of upgrades because of increased investment facilitated by the Konektadong Pinoy Act, according to Fitch Solutions unit BMI.
“The new law should encourage more investment in critical digital infrastructure shortfalls, which are hampering the country’s ambitions to become a key regional digital hub,” BMI said in a report.
The Konektadong Pinoy Act, or the Open Access in Data Transmission Act, streamlines the licensing process for new entrants, boosting competition in data transmission.
“The passage of the Konektadong Pinoy Law means the possibility of real competition — where service providers are compelled to improve reliability, expand coverage to underserved areas, and make connectivity more affordable,” Ronald B. Gustilo, a national campaigner for the Digital Pinoys organization, said via Viber on Thursday.
The measure, which lapsed into law on Aug. 24, relaxes regulation to favor more entrants in the data transmission industry.
BMI said incumbent telecommunications firms like PLDT Inc. and Globe Telecommunications, Inc. face rising competition as a result.
BMI said the law raises the prospect of “standalone digital infrastructure and services businesses that can tap a wider pool of business opportunities.”
Samuel V. Jacoba, founding president of the National Association of Data Protection Officers, said infrastructure upgrades, improved services, and competitive pricing will be the main results of the new law.
Mr. Jacoba said education and healthcare, as well as micro, small, and medium enterprises (MSMEs) will be the first to benefit from the law.
“Public schools in urban centers will have more stable connections that will deliver blended learning and access to digital resources,” he said.
The Department of Information and Communications Technology (DICT) is aiming to finalize the Konektadong Pinoy Act’s implementing rules and regulations (IRR) within 90 days.
Under the law, new data transmission entrants are no longer required to obtain legislative franchises or a certificate of public convenience and necessity.
Globe, PLDT and Converge ICT Solutions, Inc. have expressed their willingness to provide their input in drafting the IRR.
BMI said the telecommunication companies’ main concern is that the new entrants would “cannibalize their existing retail service businesses, but they might be required to pay relatively low access fees that would not reflect the true value of the incumbent’s infrastructure.”
BMI said opening the market to a wider range of solutions providers will also allow businesses to pursue their digitalization
“Increased choice should also stimulate increased demand from businesses that have, so far, been reluctant to undertake digital transformation of their workflows and business practices, which would benefit the wider digital economy and allow the Philippines to begin to catch up with neighboring markets,” BMI said. — Ashley Erika O. Jose
