Telcos to buck lower interconnect rates, refund order

TELECOMMUNICATIONS giants Globe Telecom and Smart Communications will file motion for consideration on the recent memorandum issued by the National Telecommunications Commission (NTC) lowering interconnection rates and requiring mobile operators to give refund to their subscribers for the alleged excess charge for text messages.

The telecommunications industry in the Philippines is a de-regulated sector thus have the right to set the retail prices of their services, said Yoly Crisanto, Globe Telecom corporate communications head, during last Wednesday’s interview.

“The recent directive will take that freedom from the telecom players,” said Crisanto.

Crisanto said that because of competition telecom companies have been providing lower prices of services including text messaging, even lower than P0.80 centavos which is what NTC said the prices per SMS should be.

“Globe will use all legal remedies and grounds to preserve its right to determine its pricing,” said Crisanto.

Crisanto added that they are ready to sit down with NTC for a dialogue.

In a statement they sent to Cebu Daily News, Smart Communications,Inc said it will seek reconsideration of the NTC decision.

“First, our position is there is no basis for finding that Smart has violated the NTC memorandum circular and overcharged its subscribers,” the statement read.

The said circular, which was issued on October 24, 2011, required mobile phone operators to reduce interconnection charges from P0.35 to P0.15 per SMS.

These interconnection charges pertain to rates that mobile phone operators charge each other in order to deliver text messages from other networks to their own subscribers.

According to Smart, they have already complied with this circular.

“The circular did not order mobile phone operators to reduce retail rates that are charged to customers.Second, under the law and existing NTC regulations, SMS is a deregulated service. The rate-fixing power of the NTC is residual in nature and may be exercised only under specific circumstances.” /Reporter Aileen Garcia-Yap