Rules on cut in calls, texting access rates out by next week, says NTC

The National Telecommunications Commission (NTC) is planning to release its guidelines for lower call and text messaging access rates by next week.

NTC Deputy Commissioner Edgrado Cabarios said in a recent interview that this followed the May 11, 2018 order of the Department of Information and Communications Technology (DICT) to lower interconnection rates to the “minimum amount.”

Cabarios said mobile operators PLDT Inc. and Globe Telecom were expected to give their comments by July 13, 2018. He expects the NTC to formulate its guidelines within a week after the said date.

The interconnection rate is an access fee charged by a telco to allow their subscribers to call and send text messages to subscribers from another network.

The DICT had cited the interconnection rate as one of the major areas it wanted to address in line with the selection of a new major telco player.

The government believes that lower access charges will result in lower call and texting rates between networks, thus making it less costly for subscribers to switch to another telco operator.

The interconnection fee for mobile calls was last tweaked in early 2017, when this was cut by up to 38 percent to P2.50 per minute. For text messaging, the rate was reduced by 57 percent to P0.15 per SMS in 2011.

Cabarios said the proposed cut would bring the rate per minute of calling to P0.50 and P0.10 per text message.

PLDT chair and CEO Manuel V. Pangilinan said in an interview last month the cut would have a “minimal impact” on PLDT’s revenue.

This is mainly because text messaging and voice calls have been on the downtrend as subscribers shift to smartphones and use internet-powered platforms such as instant messaging and social media to communicate.

The DICT’s move to lower call and text rates would have the biggest impact on subscribers using 2G, or second-generation, mobile phones.

2G phones are still used by about 40 million subscribers in the Philippines, according to estimates of industry players.

The government is hoping PLDT and Globe will fully pass these savings on to their subscribers—a view that is currently being challenged by the telcos.

When the NTC ordered the telcos to cut the interconnection fee for text messaging by P0.20 in 2011, it also ordered a cut in the retail price from P1 per message to P0.80. Moreover, the telcos were told to refund their customers and pay a fine.

Globe argued then that a “reduction of the SMS interconnection charge does not automatically translate to a reduction in the SMS retail charge per text.” The matter was elevated to the Supreme Court in September last year.