Telcos: Lower regulatory fees to bring down internet costs

MANILA, Philippines — If the government is serious in lowering internet prices by half by 2028, reducing regulatory fees that would trim business costs and, in the process, consumer rates, should be on the table, telecommunication companies said.

The Philippine Chamber of Telecommunication Operators (PCTO) said slashing regulatory charges such as the spectrum user fees (SUF)  would make connectivity services cheaper.

PCTO vice president Roy Ibay said the group supports the goal of the Department of Information and Communications Technology (DICT) to lower internet prices by 30 to 50 percent by 2028.

However, Ibay said this has to be complemented by the reduction of regulatory fees, from the local to the national, collected from telcos. Without this, Ibay warned it would be difficult to bring down the cost of delivering connectivity to consumers.

PCTO wants DICT to reconsider the SUF slapped by the National Telecommunications Commission (NTC) on telcos. Ibay said the industry pays at least P6 billion annually to the NTC for the volume of spectrum that providers use to serve their subscribers.

Based on its financial report, NTC collected P6.69 billion in SUF last year, which Ibay said telcos could have used to build network infrastructure, especially in geographically isolated and disadvantaged areas (GIDAs).

“The regulatory fees in principle should only approximate the cost of supervision, (and) I don’t think the NTC’s cost in supervising us should run in the billions,” Ibay told The STAR.

Apart from this, Ibay said telcos settle varying amounts of yearly fees to local government units (LGUs) where they operate, piling up on the cost of doing business.

“To put it simply, the savings we can incur in paying all of these regulatory and LGU fees can be diverted to infrastructure rollout. The NTC earns something (between) P6 billion and P7 billion, but imagine what that can do when diverted to hard infrastructure in GIDAs,” Ibay said.

Ibay, who is also the regulatory affairs head for Smart Communications Inc., said funding for the DICT has to be hiked as well. PCTO said DICT should be allocated more capital to co-build cellular towers in GIDAs.

For 2025, DICT has secured a budget of P10.27 billion from the General Appropriations Act, but the agency wants this doubled next year to accelerate the rollout of digital projects.

PCTO is asking policymakers to emulate what other economies in Southeast Asia are doing, such as Vietnam, whose government is investing in 6G research and space technology.

“Any budget higher than what the government is giving the DICT now is justified,” Ibay said.

Last year, the Private Sector Advisory Council (PSAC) proposed that the government invest up to P240 billion on connectivity infrastructure. The council also sought the allocation of P60 billion annually for DICT to deliver free internet in GIDAs.

PSAC, made up of business executives reporting directly to President Marcos, warned that the investments are essential to bridging the digital gap in the countryside. Ibay doubled down on this, saying that without government subsidies, it would be challenging to cut internet prices.

Recently, Information Secretary Henry Aguda has gone on a press run expressing his confidence that connectivity prices would be lower by as much as 50 percent by 2028.

Aguda is counting on the passage of the Konektadong Pinoy Act — now awaiting the President’s signature  — to bring in new providers that would expand consumer options.

The measure, if signed into law, will simplify the entry process for telco investors by removing the need for a legislative franchise to operate in the Philippines.