Telco licensing needs to be reformed – study

MANILA, Philippines — The government has to revamp the licensing system for connectivity providers as an initial step to bringing down the cost of internet as well as improving accessibility and reliability, according to a study.

A research paper for the Philippine Institute for Development Studies (PIDS) recommended that the government reform the licensing regime for the information and communications technology (ICT) industry.

The study said one of the reasons the Philippines is lagging behind in Southeast Asia in terms of ICT

“The licensing regime is restrictive and burdensome, resulting in costs and delays in the network buildup and the deployment of new technology. The types of licenses issued should be reviewed to liberalize market entry further,” the study read.

To manage middle mile infrastructure in the Philippines, companies are required to ask Congress for a legislative franchise.

The study warned that this may be discouraging to potential investors, as they have to deal with political figures for a business decision.

The study suggested that the Philippines emulate the global standard for telco licensing whereby a regulator is given the sole authority to approve the entry of new players.

The problem with the existing system, the study said, is that it prevents the connectivity industry from welcoming new technologies that could change the way Filipinos access the internet.

The Philippines currently maintains one of the highest costs for internet access in Southeast Asia, and the country is far from achieving the United Nations target of reducing broadband prices to two percent of monthly gross national income (GNI) per capita.

In 2021, Filipinos spent 11.56 percent of GNI per capita to subscribe to fixed broadband, one of the most expensive in the region.

The high cost of connectivity subscription in the Philippines is also viewed as one of the factors for the imbalance in internet penetration in the country.

“Households in the National Capital Region are seven times more likely to have internet access than those in Bangsamoro. Bold measures are needed to achieve accelerated and inclusive digital connectivity,” the study noted.

Apart from the licensing reform, the study said the government should develop a spectrum policy and reinvent the role of the National Telecommunications Agency to accelerate digital transition across the Philippines.

PIDS senior research fellow Ramonette Serafica and research specialist Queen Cel Oren were the authors of the study.