NTC directives to limit telephone carriers’ access charges

MANILA, Philippines - The National Telecommunications Commission (NTC) is expected to issue twin draft circulars today that seek to limit access charges for voice and short message service (SMS), amid earlier warnings from telecommunications firms of fading growth due to soaring consumer prices. Once enforced, access charges — imposed by telephone carriers for the use of their networks — will go down by as much as 10%, NTC Director Edgardo Cabarios said Friday. The draft circulars will be released to carriers, who will be given a chance to state their position at public hearings that will start on June 5. Mr. Cabarios said the policy would lead to lower retail rates for voice calls and text messages. "[The] reduction in retail costs will be substantial," he told reporters. Carriers earlier said the teeth of rising consumer prices have yet to bite deeply into their business, but a global slowdown could take its toll on profits via lower consumer demand. Still, he noted that while the company is cautious about the downturn and rising consumer prices, it is confident that 2008 would be a better year. Telephone companies impose a P3 per minute access charge on calls made from a landline to a mobile phone. The access charge on calls made from a hand phone to a landline is higher at P4 per minute. Meanwhile, the access fee for SMS is 35 centavos per message. Landline and prepaid mobile subscribers will likely benefit most from the 10% rate cut, while postpaid subscribers under different plans may enjoy more minutes of talk time and free SMS. Mr. Cabarios said the move is the NTC’s response to a call made by Transportation and Communications Secretary Leandro Mendoza to make text messages free. Following his announcement, Mr. Mendoza ordered the NTC early this week to look at ways to lower communication costs. Mr. Cabarios said telephone companies could continue negotiating bilaterally on access fees, but the amount charged on subscribers would be limited. Mobile leader Smart Communications, Inc. and rival Globe Telecom, Inc. declined to comment on the NTC directive. Telecommunication companies have threatened to raise voice call rates in reaction to the government proposal to abolish charges on short message service. They said their franchises authorize them to offer text messaging as a commercial service. The Philippines is said to be the text capital of the world. Of the estimated 35 million cell phone subscribers in 2006, about 350 to 400 million text messages are sent daily. This figure is more than the total daily text messages sent in the US and Europe combined. — Anna Barbara L. Lorenzo, BusinessWorld