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July 27, 2008

Philippines: Telecom industry needs friendlier NTC

The telecom industry is satisfied with the performance of the National Telecommunications Commission (NTC) but is urging the regulator to create a more business-friendly environment, reported local daily Manila Times on Sunday.

“The [telecom] industry has benefited from the liberalised regulatory environment that the NTC has implemented based on the law passed in 1995. We hope that it will continue because the past 10 years have shown that not only the industry but the customers have benefited from this kind of liberal regulatory environment,” Ramon Isberto, spokesman of Philippine Long Distance Telephone Co., the country’s biggest telecom firm, was quoted as telling the newspaper.

Isberto added that the NTC should continue this kind of regulatory environment, as it is the best for both the industry and the consumers “because you’re dealing with an industry that requires a great deal of investment periodically. These investments have to be made because changes in the environment, advances in technology, are taking place,” he said.

Players in the cellular phone industry have invested about P700 billion (700 billion  peso) to P800 billion since 2000.

Isberto said the NTC should maintain a business-friendly environment while at the same time protecting consumer welfare.

The NTC last month issued a draft circular imposing a P0.15 interconnection charge per SMS, which is lower than the current rate of P0.35.

The retail price of SMS consists of the cost of the network sending the message plus the cost of the network receiving it, as well as the cost of the interconnection. At present, telecom companies charge P1 per text message.

A separate circular would also reduce the interconnection charge for voice calls to P1.50 or even lower per minute. This is 63-percent cheaper than the current rate of P4 per minute between mobile operators of separate networks.

These circulars were opposed by the telecom companies, saying they are contrary to law.

Isberto noted that there is no need to cut access charges because the telecom companies in general are now talking of lowering not just text and voice rates but also the broadband Internet usage rates.

Eric delos Reyes, the president of Philippine Association of Private Telephone Companies Inc. (Paptelco) agreed with Castelo. He added that the NTC’s policies are consistent with the direction of the government to provide cheaper and affordable communications.

The NTC reported that as of June, the regulator issued 886 orders and decisions compared to 310 in the same period last year.

These include extension and renewal of provisional authorities and certificates of public convenience and/or necessities on various telecom services, radio and television networks, and cable television operations, among others.

The telecom regulator has also issued circulars on interconnection of local exchange carriers (LEC) in local calling areas, which require telecom companies to connect their networks.

NTC has also issued a circular on value-added services to open the market to more players. This will enhance competition in the market and bring about other benefits to the industry and the consumers.

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