Fiber internet service provider Converge ICT Solutions Inc. qualified for a four-year income tax holiday and other incentives approved by the Fiscal Incentives Review Board (FIRB) for connectivity facilities in undeveloped and underdeveloped areas nationwide until 2026.
In a report to the stock exchange, Converge said the FIRB allowed incentivizing its project that would roll-out Fiber-to-the-Home infrastructure.
“We are glad that the government appreciates the cutting-edge technology we will be using to bring broadband connection to underdeveloped areas. We have always believed that connectivity is a right, not a privilege of a few. With this investment in the network, we will be allowing more Filipinos to exercise this right”, Converge CEO and Co-Founder Dennis Anthony Uy said.
Under the approved incentives, Converge will have four years of income tax holiday followed by five years of enhanced deductions or special corporate income tax as laid out in the CREATE Law.
It will also have 11 years of duty-free importation of capital equipment, raw materials, spare parts or accessories starting from the Registration Date.
Remote areas linked
The FIRB approval was given because the project will bring connectivity to marginalized areas of the Philippines and innovative technology used in the fiber network.
Broadband connectivity is one of the priority sectors that have a direct impact on AmBisyon Natin 2040, the government’s long-term vision for the nation.
The project will include laying of the terrestrial backbone, distribution networks, ports, and routers to more than 1,200 unserved and underserved municipalities nationwide.
Converge clarified that the subject to the approval of the expansion of the coverage areas in its Certificate of Public Convenience and Necessity.
The Converge nationwide fiber broadband roll-out, the first phase of which began in November 2021 (registration date), is classified as a strategic service in the telecommunications sector in the 2020 Investments Priorities Plan.
According to Media Partners Asia, in December 2021, the fiber penetration in the Philippines is just 17 percent of households, way behind several ASEAN neighbors whose penetration rate has breached 40 percent, even reaching 80 percent for Vietnam.
The target of the Broadband Commission for Sustainable Development is for middle-income countries including the Philippines to reach 65 percent broadband Internet penetration by 2025.