PLDT, Globe expected to sign deal to lower interconnection fee

Telco giants PLDT Inc. and Globe Telecom will execute a long-awaited cut in the interconnection fee for subscribers making calls between their networks – a move that should pave the way cheaper voice rates by early 2017.

Inquirer sources with knowledge of the matter said PLDT, which owns flagship Smart Communications, and Globe will sign an agreement that will lower the current P4 per minute interconnection rate to P2.50 per minute.

The signing, which is expected to take place Monday morning, will include the Department of Information and Communications Technology and National Telecommunications Commission officials as witnesses.

The interconnection rate is passed on to consumers, and telco companies derive revenues from this fee.

A reduction here would translate to lower calling costs between rival networks, and consumers could see benefits in terms of price by January next year.

The issue over lowering voice interconnection fees has been under discussion for years.

The development comes as both telcos see significantly lower revenues from voice calls. This was yet another nod to the so-called digital shift, where consumers are rapidly moving to data services, where they can use social media and instant messaging apps like Facebook and Viber to make calls.

It also comes as both the PLDT Group and Globe now match each other in terms of mobile subscriber count. PLDT was the previous market leader by this measure.