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NTC to push lower interconnection fees

By Paolo Montecillo
Philippine Daily Inquirer
First Posted 02:50:00 01/12/2010

Filed Under: Technology (general), Telecommunications Services, Consumer Issues

THE NATIONAL TELECOMMUNICATIONS COMMISSION is continuing its push to lower the cost of mobile services in the country, despite meeting opposition from local network operators on all fronts.

The regulator said that as soon as the issues on the new per-pulse charging scheme are resolved, one of the first policies it would pursue is the lowering of access charges on mobile phone services.

?That is part of the NTC?s program in lowering voice call and text costs. We already have that on the drawing board,? NTC Deputy Commissioner Douglas Michael Mallillin said.

Access charges, also called interconnection costs, are what subscribers pay when making a call or sending a text message to another network. As its name suggests, these charges are meant to cover the costs involved in interconnecting with another network.

?Lowering access charges will directly lower voice call and text costs for subscribers,? Mallillin said.

Last year, two draft circulars obtained by the Inquirer showed the NTC?s plans to cut interconnection charges gradually, instead of the one-time cut the regulator proposed in 2008. The 2008 rule was quickly shot down by industry players.

While short messaging service or SMS and voice call costs within a single network have significantly gone down as a result of ?bucket priced? promos offered by local firms, costs for the same services from one network to another have remained expensive.

Text messages made from one network to another are P1 each, while calls cost about P6 to P7.50 a minute.

Under the proposed rules, the interconnection charge for text messages will be brought down to 25 centavos from the current 35 centavos in the first year of implementation of the new rule.

On the third and fifth year of the circular?s implementation, interconnection fees will have to be brought down to 20 centavos and 15 centavos, respectively.

Meanwhile, the draft circular for voice calls wants to bring down the interconnection charge to P2.50 a minute from the current P4 on the first year of implementation.

The charge for voice calls will be brought down at a faster rate, the NTC circular said, with the interconnection fee to go no higher than P2 in the second year of implementation, and P1.50 on the third.

The NTC said that with the exception of Smart Communications Inc., local telecommunications firms pay more than they receive on interconnection.

This means that since Smart, with its 40 million subscribers, is the biggest mobile network in the country, there is a higher likelihood that more people from other networks contact Smart subscribers. Every time this happens, Smart gets paid for allowing other networks to enter its own.



Copyright 2011 Philippine Daily Inquirer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.



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