Publicly listed telecommunications firms, particularly market leaders PLDT and Globe Telecom, are taking a beating on the local stock market as investors shy away due to the potential impact of the Konektadong Pinoy Act and new online gambling restrictions on e-wallets.

“The sector has been on the defensive in the past few months and especially after poor second quarter results. But there's even more pressure now after the Konektadong Pinoy Act (KPA) was left to lapse into law. This has created an overhang and a lot of uncertainty as stakeholders wait for the implementing rules and regulations (IRR) to be crafted,” said Abacus Securities Corporation.

For its part, COL Financial said, “We are lowering our fair value estimate for both Globe and PLDT amid the intensifying competitive environment within the industry and tighter regulations for online gambling, affecting the revenues of their e-wallet associates.”

It added that, “While e-wallets were able to report robust growth during the second quarter, we note that the slowdown of online gambling transactions due to the tighter regulations may affect earnings moving forward.”

Abacus said telco stock prices have dropped an average of eight percent since last week due to concerns over the KPA.

“Deliberations among regulators tasked with drafting the IRR and telcos will probably be most intense on the issue of the ‘access list.’ From the law itself, this refers to the ‘digital infrastructure and services... necessary to offer data transmission services competitively.’

“Advocates of KPA will want this to be as broad as possible, whereas telcos are going to push for a narrower definition,” it noted.

Abacus said, “While internet services via mobile devices might be covered by KPA, we don't believe it can be a viable entry point into the local market. For this, the experience of app-based data provider GOMO (launched 2020), which never gained significant market share, is instructive.”

Based on telcos’ revenues that come from broadband, both residential and corporate, the brokerage said Globe has the least to lose if there is additional competition.

“However, its core mobile business was quite weak in first half of 2025 with recovery unlikely this year. Sentiment for the Ayala telco has also soured after Mynt's IPO got stuck in regulatory limbo. At the other end of the spectrum, Converge has 100 percent exposure being a pure connectivity provider with its fiber network,” said Abacus.

Meanwhile, PLDT derives over 40 percent of its revenues from its broadband business, the brokerage noted but added that, “The good news is that Maya is just beginning to take off. Rapid growth in the next one to two years could offset at least part of PLDT's exposure to KPA. More so if management follows through on previous statements that they intend to buy back at least part of KKR's interest in Maya.”

“The earliest that we see shares of these three (Globe, PLDT, Converge) firms stabilizing is after the IRR (implementing rules and regulations) are finalized but even that could bring negative surprises if the access list is overly broad, and the RAO (reference access offer) does not give fair returns to the telcos,” Abacus said.

Meanwhile, COL also pointed to DITO’s expansion and the KPA tempering the outlook for Globe and PLDT plus “we noted adjustments in our average revenue per user (ARPU) estimates to align our forecast with the strained spending capacity of consumers and the matured mobile industry.”

This open access network bill is aimed at increasing the number of competitors of the incumbents, lowering overall prices. We note that DITO specifically could benefit from the (KPA) as it could lower capital requirements for its expansion, further grabbing market share from incumbents.

“While it remains likely to be negative for both Globe and PLDT, the impact of this bill is highly dependent on its IRR, which is expected to be drafted 90 days after its enactment,” it added.

“We have also reduced our estimates for both GCash and Maya to reflect the lower number of transactions from online gambling due to tighter regulations. Recall that the BSP has mandated E-wallets to remove online gambling links from their applications. Since then, PAGCOR has noted about a 50 percent drop on E-gaming transactions,” COL noted.