Philippines scraps franchising, opening doors to faster data services, competition

Manila: Filipinos could soon break free from slow internet service, and enjoy leading-edge, more competitive broadband services as the franchising-based scheme for data communications is now officially scrapped.

With the "Konektadong Pinoy Act" (KPA) becoming law, it effectively tears down long-standing barriers, invites global investments, and creates a stronger, more open digital ecosystem in the country. 

Potentially, it could supercharge the country’s internet backbone, giving Filipinos faster, cheaper links, with early rollout of 6G services.

Additionally, it could usher in more reliable connections than the now-you-see-me-now-you-don’t 5G services of incumbents like PLDT and Globe.

New law kicks in

Enter Konektadong Pinoy Act (KPA, originally Senate Bill No. 2699, filed in the 19th Congress), also known as the “Open Access in Data Transmission Act”.

It automatically lapsed into law on August 24, 2025, 30 days after being transmitted to the President without a signature.

On Sunday, Malacañang (the presidential palace) confirmed that Senate Bill No. 2699, or KPA, automatically lapsed into law that day. 

Now, whether you’re a telco, a value-added service provider, or a satellite operator, all you need is a simple registration to join the game.

This could supercharge the country’s digital data infrastructure.

Here’s how and why:

In a nutshell, the law establishes a comprehensive legal and inclusive data transmission and connectivity framework.

Why is a globally competitive telecom service, for decades the exclusive domain of neighbouring countries, hard?

Because connecting 7,641 islands with terrestrial broadband data link is no easy feat, that's why.

By fostering a competitive, “open-access” environment in the telecommunications sector, it would narrow the so-called “digital divide” across the archipelago.

The Philippines ranks 65th globally for mobile internet and 58th for fixed broadband, according to Ookla (February 2025 data).

The country's connectivity still generally lags behind its Southeast Asian neighbours, particularly in mobile speeds.

Breaking free from the past

In the past and until now, the country’s telecom sector has been effectively ring-fenced by incumbents — run by influential local families, mostly based in Manila, with friends in Congress who had absolute control over telecoms franchising across the country.

The new law intends to break that.

It was prepared and submitted jointly by the Senate Committees on Science and Technology, Public Services and and Finance with Senators Imee Marcos, Win Gatchalian, Grace Poe, Ramon Revilla Jr., Miguel Zubiri, Joel Villanueva, Raffy Tulfo, Lito Lapid, Jinggoy Estrada, Loren Legarda, and Allan Peter Cayetano as authors.

But this won't simply happen without a fight, potentially a lengthy court battle.

Why is it 'landmark' legislation?

By easing the entry of more capital and operators in the data communications sector, KPA overturns decades of outdated rules - and opens the door to faster digital growth. 

The ring-fencing becomes history. 

Key reasons:

No more congressional franchise requirement: In the past, incumbents (who had friends in Congress, the Senate and the courts) forced potential competitors to go through a slow, costly and political process just to join the data transmission business. Now, they only need simple registration.

Open for foreign investors: Combined with earlier reforms under the Public Service Act, the law removes big restrictions (like the old 40% cap on foreign ownership). This means global tech and telecom giants can now directly invest.

Boosts competition: More players means healthier competition, lower prices, and better service for consumers.

Supports ASEAN’s digital economy goals: The Philippines can now keep up with neighbours building a unified Digital Economy Framework Agreement (DEFA).

Digital data infrastructure

How will it supercharge the country’s digital data infrastructure?

More investments:

By cutting red tape, the Philippines becomes more attractive to both local and foreign investors.

Satellite freedom:

Companies can now use satellite technology directly, without the need to go through incumbent or franchised operators, reaching even far-flung rural areas.

Infrastructure sharing

Encourages companies to share relay or communication towers and fiber networks, reducing costs and speeding up rollout.

Better spectrum management

The Department of Information and Communications Technology (DICT), National Telecommunications Commission (NTC), and Philippine Competition Commission (PCC) will create a Spectrum Management Policy Framework, ensuring fair use of frequencies and promoting innovation.

Data protection, innovation balance

The law empowers DICT to secure local data while still allowing the free flow of information across borders — critical for digital trade and cloud-based services.

Big cheers from the global business community

The measure has been warmly welcomed by:

• The Joint Foreign Chambers

• The EU-ASEAN Business Council

• The IT and Business Process Association of the Philippines (IBPAP), and

• The US-ASEAN Business Council.

In their joint statement, they hailed it as a “landmark achievement” that will not only improve internet access but also strengthen the Philippines’ digital ecosystem in the years ahead.

Challenges

Of course, not everyone is clapping.

• Security worries: Critics argue that allowing more foreign participation may pose risks to national security (same tired arguments used to protect the telecom monopolies of the past).

• Legal battles looming: Some incumbents have threatened to challenge the law in court. This could unleash a legal battle, potentially all the way to the Philippines Supreme Court. Why, the same old go-back-to-national-security-arguments used in the past to protect could be resurrected, causing the industry to backpedal and tie the country’s hands and feet while neighbours advance

• Rules still pending: The Department of Information and Communications Technology (DICT) is finalisng the Implementing Rules and Regulations (IRR), which must carefully balance data privacy, free data flow, and innovation. The IRR draft will go through public consultation and is expected to be released within 60 days.

• Drafting of IRR: The DICT, meanwhile, told local media that foreign telcos, including Starlink, would be given a role in drafting the implementing rules of KPA.

The road ahead

Supporters say success will depend on well-crafted IRRs that encourage competition while protecting national interests. 

Businesses hope the rules will ensure seamless cross-border data flows and make it easier to innovate and scale.

Like any game-changing law, the real test lies in implementation.