NTC orders telcos to refund text overcharge

By: Miguel R. Camus, May 8th, 2014 08:13 AM

MANILA, Philippines—Mobile phone consumers should be getting soon some reprieve in their ever-rising cellular bills after the National Telecommunications Commission (NTC) ordered Wednesday a sweeping refund covering several years of text-message charges between telco providers.

Showing some teeth against the powerful and politically influential telco firms, the NTC ordered the Ayala-led Globe Telecom and Philippine Long Distance Telephone Co. (PLDT) units, Smart Communications and Digital Mobile Phil. (Sun Cellular) to slash their short message service (SMS) rate to “other networks” to 80 centavos from P1.

The P0.20-per-text-message “excess charge” should then be refunded to subscribers in what would likely trigger legal action from telco players facing declining profit margins in text and calls as mobile subscribers gradually shift to services like WhatsApp and social networking sites like Facebook.

Indeed, the final amount of refunds could reach “billions of pesos” as the order became effective last Dec. 1, 2011, said NTC Director for Regulations Edgardo Cabrios.

The NTC decision, which also penalized the telcos with a P200 daily fine until they comply, was dated May 7 and was meant to resolve appeals filed by the telcos on Dec. 5, 2012, questioning the constitutional basis of the NTC decision.

Cabarios said the NTC decision is expected to be contested by Globe and PLDT, which control 30 percent and 70 percent of the cellular market, respectively.

“It’s going to be a huge amount of refunds … they [Globe and PLDT] might go to the Court of Appeals,” he said.

Cabarios said the NTC estimates there are about two billion text messages sent every day, with 2 percent of these, or 40 million text messages, not under a “bucket pricing plan,” seen to be covered by the order.

At a 20-centavo refund, that translates to about P8 million in industry-wide refunds for each day for the last two years and five months.

Spokespersons for Globe and PLDT declined to comment on those figures while adding that their legal teams have yet to receive the NTC’s order as of late afternoon Wednesday.

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