DICT Broadband Cost Reduction Plan Puts Telcos on Notice

The National Digital Connectivity Plan reframes affordability as policy, and the competitive pressure now shifts from consumer complaints to government targets.

The Bottom Line

• DICT’s broadband cost reduction target of 40 to 80 percent by 2028 is the first time a Philippine administration has set quantitative affordability benchmarks for internet pricing, moving the issue out of consumer advocacy and into infrastructure policy.
• Mobile broadband currently costs 1.56 percent of gross national income per capita, and fixed broadband 4.69 percent, both well above ASEAN peers. Hitting the 80 percent reduction would put the Philippines roughly in line with Malaysia and Vietnam.
• The plan pairs price targets with structural reform. Liberalization, infrastructure sharing, and the Konektadong Pinoy Act IRR are the actual levers, not direct price controls.
• Globe, PLDT, DITO, and Converge have publicly committed to cooperate on Konektadong Pinoy implementation, which signals incumbents are positioning for the new regulatory baseline rather than resisting it.
• For BPO operators, enterprise IT buyers, and SMEs, the 2026 to 2028 window will likely produce volatile pricing and renegotiated contracts as carriers absorb new entrants and shared infrastructure rules.

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A price target with regulatory teeth

The Marcos administration’s National Digital Connectivity Plan sets a broadband cost reduction goal of 40 to 80 percent by 2028, the first quantitative affordability benchmark of its kind for Philippine internet services. The plan was approved by the Economy and Development Council on January 26 this year and is being implemented by the Department of Information and Communications Technology under Secretary Henry Aguda.

The numbers behind the target explain why DICT is pushing this hard. Mobile broadband eats up 1.56 percent of gross national income per capita in the Philippines, roughly 1.8 times the ASEAN average. Fixed broadband sits at 4.69 percent of GNI per capita, more than double what households pay in Malaysia and Vietnam. For a country that exports digital labor at scale and runs one of Southeast Asia’s largest BPO sectors, those figures are a structural drag, not a consumer inconvenience.

What makes this NDCP different from the 2017 National Broadband Plan is the precision of the affordability commitment. Earlier policy framed connectivity in terms of access and speed. The current plan ties cost reduction to four operational pillars: governance reform, infrastructure investment, affordable access, and network resiliency. Each pillar carries delivery targets, and each is supposed to feed into the headline price reduction.

Where the cost reduction actually comes from

DICT is not setting consumer prices. The broadband cost reduction is supposed to come from competitive pressure, not regulation. Aguda has consistently pointed to three mechanisms: liberalizing market entry, mandating infrastructure sharing, and accelerating the Konektadong Pinoy Act, which removes the legislative franchise requirement for data transmission providers and opens the backbone to new players.

This is the part that matters for incumbents. Globe, PLDT-Smart, DITO, and Converge have all publicly signaled willingness to work on the Konektadong Pinoy IRR, which reads less like enthusiasm and more like positioning. Once the IRR is finalized, smaller and foreign-backed providers can enter the data transmission market without the years-long franchise process. That changes the math for everyone already in the market.

The plan also targets average broadband speeds of 225 Mbps for mobile and 275 Mbps for fixed by 2028. These are aggressive numbers, particularly for mobile, and they imply substantial spectrum reallocation and tower densification. The US-ASEAN Business Council estimates the broader connectivity buildout will require around PHP 6 trillion in investment over the next several years, drawing on a mix of fiber, wireless, satellite, and submarine cable systems.

The downstream effects on enterprise and BPO

For enterprise buyers, the implications are straightforward but uneven. If broadband cost reduction hits even the lower 40 percent end of the target, multi-site retail operators, BPO campuses, and logistics companies should see meaningful operating expense relief on their connectivity contracts by 2027 to 2028. The catch is that incumbents will likely protect margins by restructuring service tiers, bundling cloud and security services, and pushing enterprise customers toward longer-term commitments before new entrants can scale.

The BPO sector has the most concentrated exposure. Connectivity costs are not the largest line item for the industry, but they are one of the few cost categories where Philippine operators have been at a structural disadvantage compared to India and Vietnam. A 40 percent reduction in fixed broadband costs would close part of that gap, and would matter most to mid-size operators who do not have the bargaining power of the IT-BPM majors.

For SMEs, the more immediate benefit may come from the 130,000 free Wi-Fi sites and expanded coverage in the 7,000 underserved areas the plan identifies. These are not enterprise-grade connections, but they extend the addressable market for digital services and lower the barrier for sole proprietors and microbusinesses to operate online.

What 2026 to 2028 will look like

The implementation window is short, and the political ceiling on this plan is the 2028 administration handover. DICT has roughly 30 months to demonstrate measurable broadband cost reduction before the next election cycle compresses everything. Expect the next 18 months to produce pricing volatility as incumbents test how much margin they can hold, regulators test how much enforcement they have, and new entrants test how quickly they can build.

The piece worth watching is whether Konektadong Pinoy Act implementation actually produces new market entrants or whether it ends up as a compliance exercise that reinforces the existing oligopoly. The cost target only works if the structural reforms behind it do.

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