NTC orders cut in text charges

Mobile phone users can expect lower and more affordable rates for their short messaging service (SMS) with the approval by the National Telecommunications Commission (NTC) of a reduction in the interconnection charge for text messaging.

Through Memorandum Circular No. 02-10-2011 issued on Oct. 24, 2011, the NTC ordered that the interconnection charge for SMS between two separate telecommunications networks should not exceed 15 centavos per SMS.

With the enactment of the new rate, the interconnection cost of SMS will be cut by 20 centavos from the prevailing rate of 35 centavos per SMS.

According to NTC Commissioner Gamaliel Cordoba, the new SMS interconnection rate was in line with the provisions of the Public Telecommunications Policy Act of the Philippines, which seeks the establishment of fair and reasonable interconnection among public operators and other telecommunications service providers at reasonable and fair cost.

It also complies with Executive Order 546 of 1979 aiming to further reduce telecommunications costs and foster fair competition in the telecommunications industry, Cordoba added.

The NTC chief expressed hope that the reduced SMS interconnection rate will translate to lower retail prices of text messaging service and make the popular telecommunications service more accessible and affordable to a greater number of people throughout the country.

At present, telecommunications entities charge a rate of as low as 10 centavos per text message within their respective networks, but this amount goes up with the addition of the cost of the network receiving the text message, plus the interconnection charge that costs 35 centavos per SMS.

Text messaging service is one of the most widely used means of communications for millions of Filipinos because of its affordability and accessibility, especially for residents of far flung areas where fixed line phone services are unavailable.

Under the same circular, all SMS network providers were also ordered to ensure that they have adequate facilities that would guarantee that 99 percent of text messages reach their destinations within 30 seconds from the time the messages are sent.

Each of the networks involved in the interconnection should provide the interconnection links or circuits required to efficiently and effectively handle their respective SMS traffic.

The telecommunications firms should ensure that adequate termination equipment are in place to quickly connect the interconnection links and circuits to their respective networks.

The NTC memorandum circular will take effect 15 days after its publication, and the new interconnection charge will be imposed not later than 20 days from the effectivity of the circular.

Because of this, telecommunications networks are required to amend their interconnection agreements to meet the requirements of the circular within 10 days from its effectivity.

Cordoba said that the cut in the interconnection charge for text messaging service is one of several policy initiatives enacted by the NTC that would redound to the benefit of millions of consumers through lower and affordable telecommunications costs, better and quality service and new, innovative and consumer-friendly products.

Also under consideration by the regulatory agency are the rules on the 6-second pulse billing that would safeguard the mobile phone users against possible theft and which would bill them based on actual usage.

Mandatory Internet peering, on the other hand, would require Internet service providers (ISPs) to deliver and receive traffic between end-points without passing across the national borders.