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NEWS UPDATES Asean Affairs        29  June 2011

Philippines may lower telecom charges

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The National Telecommunications Commission (NTC) has revived the proposed reduction of access charges among mobile phone providers, which would bring down the cost of text and voice messaging by half.

In a Memorandum Circular on Interconnection Charge for Short Messaging Service, the regulator cut the interconnection charges for text between two separate networks 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 make SMS more affordable.

Edgardo Cabarios, director of NTC's Common Carrier and Authorization Department, said the circular proposes that the interconnection charge for SMS for the first year from effectivity would not be higher than P0.25 per text. For the second year, the charge would not be higher than P0.20 per SMS; and for the third year, no more than P0.15.

The existing interconnection charge for SMS is P0.35 per text, while a text message costs subscribers P1.

Under the circular, SMS in the first year would cost P0.50; in the second year, P0.40; and in the third year, P0.30.

At present, telcos offer SMS at a price of P0.15 within their respective network through promotional offerings.

The NTC said the retail price of SMS consists of the cost of the network sending the text message plus the cost of the network receiving the message and the cost of the interconnection facilities.

The regulator also said that SMS network providers shall ensure that facilities are sufficient to guarantee that 99 percent of SMS sent are received by the addressee within 30 seconds from the time the message is sent.

A separate draft circular was also issued to reduce the interconnection charge for voice calls to P2 per minute for the first year of effectivity; to P1.50 per minute for the second year; and to P1 per minute for the third year.

Given this, the cost of voice calls per minute would go down to between P3 and P4 in the first year; P2 in the second year; and P1 in the third year of implementation.

At present, telcos impose between P6 and P6.50 per minute for voice calls.

Industry studies show that the Philippines has the highest access charge rates in Asia at P4 per minute of call, whereas subscribers pay only P1.24 to P 1.30 per minute of call in Malaysia, and P1.24 to P1.30 per minute of call in Thailand.

The NTC is set to hold a public hearing on July 4.


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