The digitalization in the Philippines has been ongoing for transformation. Yet, the main problem lies in our internet connectivity, especially the part concerning the “speed” that Filipinos experience. Indeed, having a better internet connection is a good call, and the laws have been currently in favor of the same!
With the recent approval and signing of the Implementing Rules and Regulations (IRR) for the Konektadong Pinoy Act (RA 12234), the opportunity for significant investment in telecommunication has never been better. The hope is simple but significant: stronger infrastructure, more competition, and better reliability and affordability that is available to the general public.
Let’s take a closer look at what’s happening, why it matters, and what we can expect next.
What is Konektadong Pinoy & Why the IRR is a Big Deal
The Konektadong Pinoy Act (RA 12234) is one of the laws that aims to reform the country’s digital infrastructure. It is based on the principle of democratizing connectivity, which aims to break down the barriers that cause limited competition and significantly slow down the country’s digital development. Through a more straightforward entry process for new companies and updated regulatory requirements, it established a more open, competitive, and innovative market where Filipinos can finally achieve faster, more reliable, and affordable internet.
Additionally, a key feature of the law is the removal of the outdated requirement for a legislative franchise to operate in data transmission, wherein it significantly lowers the entry threshold, making room for opportunities for other Data Transmission Industry Participants (DTIPs) like Fiber Operators, Satellite Companies, Mobile Network Providers, and other emerging technologies. Likewise, the law also endorses the concept of infrastructure sharing, encouraging companies to share towers, fiber lines, and similar assets, which aim to prevent unnecessary duplication of resources while improving the nationwide provision of telecommunications services. Yet, security must also be considered, as the law requires that all new DTIPs obtain cybersecurity certification within two years. Otherwise, they may face possible suspension. Transparency is also encouraged to be built into the system through the regular publication of internet pricing, creating a space for fair competition and clear consumer information.
Hence, the release and signing of the Implementing Rules and Regulations make the law operational, as it sets out the actual procedures to be followed, timelines, compliance rules, and technical standards that company players must adhere to. The Act is now effectively transforming from a broad, ambitious policy vision into an attainable framework. With it, the reforms can finally begin their step toward reshaping the Philippines’ telecommunications landscape.
Thriving Investments to Come
According to Department of Information and Communications (DICT) Secretary Henry Aguda, 6–7 foreign companies are now aiming to enter the Philippine Telecommunications industry, now that the IRR has been approved. Most of the potential new entrants are eyeing opportunities in the Fiber sector, while others are aiming to explore the Satellite and Mobile Service sector, indicating a broader variability of the country’s telco industry. Indeed, the strategic move is timely, as the Philippines is still far from achieving its target infrastructure levels. The government estimates that increasing the existing 30,000 cell sites to the ideal 100,000 will require substantial capital investment, implying opportunities that both new and established players can leverage.
The release of the IRR is already generating significant interest from abroad. According to DICT Secretary Henry Aguda, around six to seven foreign companies are now preparing to enter the Philippine telecommunications market. Most of these potential entrants are eyeing opportunities in the fiber sector, while others are exploring satellite and mobile service offerings — signaling a broader diversification of the country’s connectivity landscape. With the Philippines still far from its target infrastructure levels, the timing couldn’t be more strategic. The government estimates that increasing the existing 30,000 cell sites to the ideal 100,000 will require enormous capital investment, underscoring the scale of opportunity available to both new and established players.
Moreover, Aguda added that a typical telco invests around $1-1.5 billion annually in expansion, demonstrating that the industry has significant requirements but also offers substantial potential for returns. To support this and further promote growth, the IRR outlines a comprehensive incentive package designed to reduce startup costs and operational expenses. This package includes income tax holidays, VAT exemptions, zero-rated registration, duty exemptions, and other benefits designed to enhance investor confidence.
Why This Could Mean a “Better” Internet
Taking into account the bigger picture, the vision is clear — a more competitive, better infrastructure, more options in the telco industry, having more company players and choices for the regular users.
- With more entrants in the industry, specifically foreign ones — there is pressure to bring prices down, as is expected when heated market competition arises.
- Aside from offering a lower price, the ultimate goal remains the same — to become a reliable provider of high-quality services that deliver good value.
- The law prioritizes the remote areas of the country — New company players will be encouraged to build in Geographically Isolated and Disadvantaged Areas, offering better accessibility options.
- A “Dig Once” policy is also part of the deal — telcos are required to coordinate their infrastructure work so it reduces redundant road digging or reworking for their establishments.
Being cheaper is not only the focus of the law, but also for the betterment of the industry as a whole, which will genuinely benefit the general public.
Risks and Potential Pitfalls
Despite the offering of better reliability and provision of service to the people, some concerns are still serious:
- Obliged Pushback – PLDT’s Manny Pangilinan has openly raised concerns that the law may enable “free riders” to use existing towers and fiber without sharing the costs of building such infrastructure. If new entrants can use existing infrastructure as freeloaders, established company players may lose the opportunity to continue expansion.
- Cybersecurity Concerns – While the IRR requires risk assessments and alignment with global standards, such as ISO and NIST, some question whether the two-year certification window is either too lenient or too demanding. A significant risk for new DTIPs is that failure or delay in meeting requirements could result in the suspension of their operating license.
- Regulation & Oversight – Questions remain regarding how the government will determine and establish “reasonable rates” for infrastructure sharing. Others warn about the implications for national security if many foreign entities gain control over crucial digital assets.
- Execution Risk – the target of expanding from 30,000 to 100,000 cell sites is quite ambitious in essence. Capital commitments are largely feasible at first, but the actual rollout may not proceed as expected. If new entrants focus only on profitable, urban-located sites, the rural and remote areas may still be left behind.
As these challenges are addressed, the momentum is crystal clear: the Philippines is positioning itself for a significant transformation in its digital industry, and investors are watching closely.
Bottom Line
The approval of the Konektadong Pinoy IRR is more than a regulatory milestone — it’s a timely strategy for anyone looking to enter or expand in the Philippine digital and telco industry. With barriers lowered and incentives outlined, indeed, early investors are in a favorable position.
If you’re exploring how your company can participate in the Philippines’ next wave of connectivity growth, Babylon2k can help you navigate it with confidence. Book a consultation today and let us help you position yourself for the new investment opportunity in one of the most crucial industries in the country.
