Despite gov’t order, SMS rate likely to stay at P1

Basic text messaging rates may remain at P1 a message, despite recent government orders for local phone firms to cut fees for over 90 million subscribers around the country.

Instead of an outright rate reduction in text messaging—a feature of mobile devices also known as the short messaging system—local telcos are opting to launch even more “bucket-priced” or “unlimited” promo offers that allow subscribers to send more text messages for a fraction of the usual price.

“The intention of the commission is for rates to go down without having to avail of these promos,” said Edgardo Cabarios, head of the National

Telecommunications Commission (NTC) common carrier’s authorization division.

The NTC earlier this year ordered telcos to cut interconnection rates on text messaging, which have stayed the same for over a decade. The interconnection rate covers the cost of sending a text message from one network to another.

Cabarios said the regulator had given companies until Friday to comply. Companies may face administrative charges if they defy the NTC’s order, he added.

In a statement, Ayala-led Globe Telecom claimed it had complied with the NTC order by offering “bucket-priced” promos to subscribers. As a result of these promo offers, industry estimates now show that companies effectively earn just 10 centavos for every text message sent, instead of the previous P1.

Also, Smart Communications said it was still in discussions with the NTC on how to address the order.

The company declined to say whether its basic text messaging rate would go down from P1. “But the interconnection rates have not stopped us in the past from offering subscribers lower rates because of the dynamics of competition,” said Ramon Isberto of Smart.

He said while nothing is final, the “effective” SMS rate in the country is already “much lower” than P1, because of the range of subscription-based promos offered by companies.