Converge secures tax perks for fiber rollout project

Converge ICT Solutions Inc. is getting tax incentives for its fiber rollout in unserved and underserved areas in the country.

Converge said it has secured the approval of the Fiscal Incentives Review Board (FIRB) to avail of tax incentives for its multi-phased establishment of connectivity facilities for high-speed broadband services targeting undeveloped and underdeveloped areas nationwide until 2026.

The project involves the rollout of fiber-to-the-home infrastructure, such as terrestrial backbone, distribution networks, ports, and routers, to more than 1,200 unserved and underserved municipalities nationwide.

Under the approved incentives, Converge 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, as well as 11 years of duty-free importation of capital equipment, raw materials, spare parts or accessories starting from the registration date, which was in 2021.

The firm’s nationwide fiber broadband rollout, the first phase of which began in November last year, is classified as a strategic service in the telecommunications sector in the 2020 Investments Priorities Plan.

Converge said the FIRB approval was given in recognition of the missionary nature of the project, which brings connectivity to marginalized areas of the country, as well as for the innovative technology used in the fiber network.

The company said latest technologies that allow higher capacity and faster data transmission would be used for the digital infrastructure.

“We’re glad that the government appreciates the cuttingedge technology we will be using to bring broadband connection to underdeveloped areas. We’ve always believed that connectivity is a right, not a privilege of a few,” Converge CEO and co-founder Dennis Anthony Uy said.

“With this investment in the network, we will be allowing more Filipinos to exercise this right,” he said.

Uy said the multi-year project is also seen to generate direct and indirect jobs, especially in the rural areas.

Data from Media Partners Asia in December 2021 showed that fiber penetration in the Philippines was just 17 percent of households, way behind several ASEAN neighbors whose penetration rate has breached 40 percent, even reaching 80 percent for Vietnam.

Converge said its project is a step toward narrowing the digital divide in the country, as access to fiber broadband remains low.