MANILA, Philippines—The National Telecommunications Commission (NTC) is bent on implementing lower interconnection rates for local phone companies within the year in a bid to bring down call and text messaging costs.
In a recent interview, NTC Commissioner Gamaliel Cordoba said that mobile phone service rates in the Philippines have remained the highest in the region, despite the country having one of the most competitive and mature markets in the world.
“Hopefully we can pass (lower interconnection rates) before the end of the year. Definitely, we need to bring down our rates,” Cordoba told reporters.
In other Southeast Asian countries, interconnection rates, or the fees charged by phone companies whenever subscribers from other networks try to reach their own users, are at most P2 per minute for voice calls. This is much lower than the P4 charged by phone firms today.
Text messaging interconnection rates in other countries, meanwhile, are no higher than 15 centavos per message. Local telcos, on the other hand, charge 35 centavos per message.
A reduction in interconnection costs, which are passed on to consumers, will result in lower call and text message service rates.
The NTC earlier this month published draft rules that would mandate a reduction of interconnection rates over three years to be more aligned to regional averages.
Cordoba said the NTC has been trying to determine a “sweet spot” in the rates to be applied for the country.
But he noted that a recent estimate by the NTC’s common carriers authorization division showed that the appropriate interconnection rate for local firms was around P1.90 for voice calls.
“That estimate already takes into account other costs for companies like advertising their services,” Cordoba said.