Converge gets tax perks for missionary connectivity

Published May 18, 2022, 12:07 PM

by Emmie V. Abadilla

The Fiscal Incentives Review Board (FIRB) granted tax incentives to Converge ICT Solutions Inc. so it can roll-out high-speed broadband connections in 1,200 undeveloped and underdeveloped areas nationwide until 2026.

Because of tthe missionary nature of the Converge project, the company will receive 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.

In addition, it will have 11 years of duty-free importation of capital equipment, raw materials, spare parts or accessories starting from its November, 2021 registration date.

Subject to the approval of the expansion of the coverage areas in its license (Certificate of Public Convenience and Necessity), Converge is rolling out Fiber-to-the-Home infrastructure – including the terrestrial backbone, distribution networks, ports, and routers – in these sites.

The digital infrastructure will make use of the latest technologies that allow higher capacity and faster data transmission.

Converge’s nationwide fiber broadband roll-out , the first phase of which began last year, is classified as a strategic service in the telecommunications sector in the 2020 Investments Priorities Plan.

The FIRB recognized that the project connects marginalized areas of the Philippines and uses

innovative technology in its fiber network.

Broadband connectivity is one of the priority sectors under “AmBisyon Natin 2040”, the government’s long term vision for the nation.

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“We’re glad that the government appreciates the cutting-edge technology we will be using to bring broadband connection to underdeveloped areas,” remarked Dennis Anthony Uy, Converge CEO and Co-Founder.

“We’ve 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,” he added.

The multi-year project will likewise generate direct and indirect jobs.

“We look forward to the opportunities that this project will open up for our countrymen, especially in the rural areas,” according to Uy.

As access to fiber broadband remains “dismally low” in the country, the Converge project can narrow down the digital divide, he maintained.

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, in the case of 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.

As part of its mission to reach unserved markets, around 95 percent of new subscribers of Converge are first time high-speed broadband users.

Amid its aggressive expansion in the past two years, the subscriber base of Converge has been steadily growing from 529,629 subscribers as of end-2019 to nearly double, at over one million in 2020 and jumping further to 1.8 million subscribers at the end of March 2022.

 
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