MANILA, JUNE 6, 2008
(STAR) By Jess Diaz - Good news for the country’s 50 million mobile phone subscribers: the cost of voice calls and text messages will soon go down by at least 20 centavos.

Deputy Commissioner Jaime Fortes of the National Telecommunications Commission (NTC) told three House committees that they have just issued a circular ordering telecommunications companies (telcos) to reduce their interconnection or access fee from 35 centavos to 15 centavos per call or text message.

Fortes said they would first publish the circular before it takes effect 15 days after publication.

An interconnection or access fee is charged when a subscriber of a particular mobile phone company makes a call or sends a text message to a subscriber of another telco. There is no such fee if the sender or caller and the receiver are subscribers of the same telco.

The three House committees – information technology, oversight and legislative franchises – held their first hearing on a bill of Albay Rep. Al Francis Bichara requiring telcos to make text messaging free of charge.

Representatives of Globe Telecom, Smart Communications and Sun Cellular informed the committees that voice calls now cost between P5 and P7 each, while the cost of a text message averages P1.

Fortes revealed the NTC reduction order in answer to questions raised by opposition Rep. Roilo Golez of Parañaque.

Golez, who is opposed to the free texting proposal, said the order means that the price of each text would soon go down to 80 centavos.

“This will be a big relief to millions of subscribers, considering the rising cost of fuel and food items,” he said.

Fortes also informed the three committees that there are now about 50 million Filipinos with cellular phones.

“They send about 550 million messages a day. I think we are still the world’s texting capital, although there are reports that China has already dislodged us,” he said.

Golez said 550 million messages a day mean that telcos are raking in P550 million a day or more than P200 billion a year in texting receipts alone.

During the hearing, telco representatives said their companies are opposed to free texting but would accept proposals to reduce the cost of voice calls and text messages.

Upon Golez’s motion, the three committees asked NTC whether the cost of a text could be further reduced to 50 centavos for messages sent within the same network and 60 centavos for messages sent from one network to another.

However, Quezon Rep. Danilo Suarez, oversight committee chairman, said the 50-60-centavo price is still high “considering that the proposal is to make texting free.”

“At that price, telcos will still make combined profits of P97 billion a year. We have to bring it down further,” he said.

Catanduanes Rep. Joseph Santiago, who heads the committee on information technology, told his colleagues that when he was NTC commissioner, he tried to make texting free.

“But the telcos stopped me by obtaining a court restraining order even before I could publish my directive,” he said.

Smart TV violating franchise?

For his part, Iloilo Rep. Ferjenel Biron, legislative franchises committee chairman, called the attention of Smart Communications to a possible violation of its franchise.

“Smart cannot engage in broadcasting. By launching Smart TV, the company is engaging in broadcasting in violation of its franchise,” he said.

Meanwhile, responding to questions on why communist guerrillas are not bombing Smart cell sites, Smart representative Roy Ibay denied that his company is paying “revolutionary tax” to the New People’s Army.

“Baka mas marami ho kaming subscribers sa kanila (Maybe it’s because we have more subscribers among them),” Ibay said in jest, referring to NPA members.

Globe legal counsel Rodolfo Salalima said the bombing of Globe cell sites has cost the company millions of pesos in actual damages and lost opportunities.

It has also inconvenienced tens of thousands of subscribers, he said.


Executives of the Philippine Long Distance Telephone Co. (PLDT) that control Smart Communications and Pilipino Telephone Corp. (Piltel) said that the move of the NTC to reduce the cost of text messages by lowering interconnection charges for short message sending (SMS) is not necessary.

Ray Espinosa, managing director of e-PLDT and head of PLDT’s Regulatory Affairs and Policies division, said that the highly competitive nature of the telecommunications industry where players fight for subscribers by offering almost cut-throat low rates over their competitors in text messages and voice calls already ensured affordable rates for consumers.

Espinosa said the recent NTC move showed the government’s undue focus on the costs of telecommunication services over other necessities like power, water and others when the costs of telecommunications has not increased through the years but has even gone down.

“We’re quite concerned about the amount of focus that the government seems to be giving to SMS and related interconnection charges when the industry itself has shown actually, and it has been experienced by the public at large, that our prices have come down dramatically unlike the other utility industries,” Espinosa said yesterday in a public hearing conducted by the NTC on the draft memorandum drawn up to lower interconnection charges for sending SMS between subscribers of two different networks in a bid to lower the costs of texting.

He pointed out that in other utility industries like oil, water, electricity, and public transport, prices of services and goods had gone up steadily.

“This (telecommunications) is one of the very few industries where prices have come down every year largely through innovation and the competition in the market,” Espinosa said. — With Rainier Allan Ronda

Chief News Editor: Sol Jose Vanzi

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