The National Telecommunications Commission (NTC) released a memo today (July 19) that will order all telco companies to reduce their interconnection fees for both short messaging service (SMS) and voice calls.
According to the agency’s Memorandum Circular No. 05-07-2018, the country’s mobile services providers will reduce their voice rates to other networks from the current P2.50 per minute to P0.50. Meanwhile, text messaging rates will be down from P0.15 per message to P0.05.
Last May, the Department of Information and Communications Technology (DICT) demanded the reduction of interconnection rates by ordering the NTC to produce “concrete measures that will ensure that interconnection rates for both mobile voice and short message services are reduced to the minimum.”
Aside from making mobile services more affordable, the DICT aims to make it easier for a new major telco player to break the PLDT-Globe duopoly.
Higher rates than other ASEAN countries
The NTC ruled out that despite the reduction of voice call and SMS rates last year and in 2011, respectively, overall rates in the country are still higher compared to our Southeast Asian neighbors.
“The prevailing interconnection charges for voice service and SMS are high compared to most of the ASEAN countries,” said the circular.
The agency found out that based on the annual reports submitted by telecoms, the cost of connecting from one network to another is P0.486 per minute and P0.044 per SMS.
In addition to lower rates, the circular mandates telcos to ensure that they have the infrastructure to accommodate the possible increase in mobile traffic.
Globe and Smart are expected to implement the new rates not later than 20 days after its effectivity day, which is around 15 days after the circular’s publication on major newspapers.
How much higher?
Based on the findings of the NTC, the Philippines has one of the highest calls per minute rate in the region. Currently, our Southeast Asian neighbors bill the following mobile termination rates to their customers:
- Thailand: P0.56 per minute
- Malaysia: P0.48 per minute
- Singapore: No charge
- Myanmar: No charge
- Indonesia: P0.93 per minute
- Cambodia: P2.42 per minute
- Vietnam: P1.26 per minute
- Brunei: no charge
- Laos: P0.73 per minute
According to both Globe and Smart’s prepaid rates, the standard call per minute is P7.50, while P1 on text messages to other networks.
Over the past few years, a lot of countries have reduced their rates in hopes of making SMS cheaper and more open to the public. South Africa, Spain, and Switzerland are just some of the countries that pushed for cheaper interconnection rates to consumers.
Since taking office in 2016, President Rodrigo Duterte vowed to break the PLDT-Globe duopoly in the Philippines by inviting a major telco player to offer its services to the country.
Although there were names floating around as to who will be the new service provider in the Philippines, the DICT said that the challenger will be named in October 2018. Both stakeholders and consumers agree that the main criteria for selecting the new player is a commitment to providing quality service to the public.