NTC revives proposal to lower SMS access charges

The National Telecommunications Commission (NTC) has revived the proposal to reduce access charges among mobile phone providers that could bring down the cost of text and voice messaging by half next year. In a draft Memorandum Circular on Interconnection Charge for Short Messaging Service (SMS), the regulator has proposed to cut the interconnection charges for inter-network text messages on a staggered basis for over three years. The circular aims to reduce communication costs, maintain and foster fair competition in the telecommunications industry, and to make SMS more affordable to the subscribers. Edgardo Cabarios, director of NTC's common carrier and authorization department, said that the interconnection charge for SMS for the first year from effectivity would not be higher than P0.25 per text; P0.20 per SMS for the second year and P0.15 per SMS for thir year. Currently, the existing interconnection charge for SMS is P0.35 per text and telcos impose P1 per text message. According to Cabarrios, this means that the SMS rate in the first year would be P0.50 per text; P0.40 per text for the second year; and P0.30 per text in the third year of implementation. At present, the NTC said that telcos are are offering SMS at prices as low as P0.15 per text within their respective networks via promotional offerings. Retail price of SMS The NTC said that the retail price of SMS consists of the cost of the network sending the short message or text plus cost of the network receiving the text plus the cost of the interconnection facilities. The NTC also said that SMS network providers should ensure that facilities are sufficient to guarantee that 99 percent of short messages or texts sent are received by the addressees within 30 seconds from the time the texts are sent. A separate draft circular was also issued to reduce the interconnection charge for voice calls to P2 per minute for first year of effectivity; P1.50 per minute for the second year and P1 per minute for the third year. Given this, the voice calls per minute should go down by between P3 and P4 in the first year; P2 in the second year and P1 in the third year of implementation. At present, the telcos impose between P6 and P6.50 per minute for voice calls. Industry studies on SMS usage Industry studies show that the Philippines has the highest access charges rates in Asia at P4 per minute of call while they only pay P1.24 to P 1.30 per minute of call in Malaysia and P1.24 to P1.30 per minute of call in Thailand. Gamaliel Cordoba, NTC Commissioner told the Manila Times that mobile phone interconnection charge rates were last adjusted in 2003. "I think its the right time to reduce the access charges. The country's 85 million subscribers stand to gain from the circulars," Cordoba said. He said that the the agency will invite the Department of Finance, Department of Trade and Industry, the telcos and the consumers for a public hearing to make additional inputs for the circulars. The NTC is set to hold a public hearing on Monday, July 4. Represenatives of Smart, Globe and Digital Telecommunications Phils. Inc. were unavailable for comment as of press time. In 2008, the NTC issued draft circulars that mandated a P0.15-interconnection charge per text message and P1.50 for voice calls, but the regulator shelved the proposals in the wake of opposition from big telcos such as Smart Communications Inc. and Globe Telecom. Moreover, the two telcos have argued that the rates for voice services have been steadily going down as mobile service providers offer increasingly lower calling rates. — TJD, GMA News