Smart Communications, backed by PLDT Inc., expressed support for the bill that would remove the spectrum user fee (SUF) for wifi internet and hopes the Senate will follow through with approval.
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The telco industry has long lobbied for the reduction of the SUF.
This move will incentivize telcos to invest in less profitable areas needing internet and phone services. In the long term, this could also lead to lower costs for customers, the industry argued.
Focus on profitability
Those views were backed by the World Bank, which released a report last January tackling industry reforms.
It noted that the SUF “actively disincentivizes service providers from rolling out and expanding wireless infrastructure in areas that will not bring the highest profit margins.”
It also noted that the National Telecommunications Commission does not require any service obligations from the operators, which encourages operators to invest in urban areas over rural expansion.
Govt SUF revenues climbing
According to the World Bank, the SUF has nearly tripled from P2.4 billion in 2017 to over P6.7 billion in 2022.
It noted, however, that the Philippines collects the lowest amount of SUF relative to peers in Malaysia, Indonesia, and Thailand.
PLDT finished 2022 with core earnings of P33.1 billion, an increase of 10 percent, while service revenues climbed 4 percent to P190.1 billion.
What the industry says
“We join the House in advocating for the adoption of a zero SUF policy, which is also in accordance with international best practices,” said lawyer Roy D. Ibay, vice president and head of regulatory at Smart.
“It is hoped that the Senate will follow through and pass this measure immediately, as such a policy will enable telcos to allocate resources toward enhancing their network and elevating broader internet access instead,” he added.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
