NTC asked to lower interconnection fees

The Department of Information and Communications Technology (DICT) wants lower mobile calling and texting rates, steps it said would help consumers and boost prospects for a potential new major telco player.

The DICT issued an order dated May 11, 2018, directing the National Telecommunications Commission (NTC) to come up with “concrete measures that will ensure that interconnection rates for both mobile voice and short message services are reduced to the minimum.”

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

Interconnection fees, which are also charged for international calls, amount to billions of pesos every year, although these have been on the decline as more subscribers shift to internet-based platforms such as instant messaging and social media.

The interconnection rate for mobile calls was slashed as much as 38 percent to P2.50 a minute starting last year. For SMS, the rate was cut to P0.15 from P0.35 a message in 2011.

By lowering the standard rate, the DICT hopes telco operators can pass on these savings to their consumers.

In its order, the DICT said mobile calls and text service rates were among the highest in Asia. Spokespersons for PLDT Inc. and Globe Telecom said they would study the implications of the order.

“Having standard interconnection fees will eliminate the factor of choosing an operator on the basis of the current subscriptions of friends and families,” the DICT said.

The initiative comes at a time when the Duterte administration is seeking to lure a so-called third telco player to break the PLDT and Globe duopoly.

“Affordable interconnection charges would encourage competition and would attract new major telecommunications players by creating a healthy environment conducive for competition and a fair playing field,” the DICT said in its order.

The DICT is drafting the rules that will determine the selection parameters in awarding coveted radio frequencies to a new telco player. DICT acting secretary Eliseo Rio Jr. said their target was to name a new major telco player within the year.