Cut text charges, refund subscribers

MANILA, Philippines – The regulator of the telecommunication industry ordered local mobile phone operators to reduce short message service (SMS) fees to at least P0.80 from the current P1, and refund its subscribers the P0.20 difference.

On Tuesday, November 20, the National Telecommunications Commission (NTC) stressed that this has been ordered a year ago when it issued a memorandum circular directing the 3 largest industry players — Smart Communications Inc., Globe Telecom, Inc. and Sun Cellular — to reduce their interconnection charges, which is the basis for the P0.20 SMS fee reduction.

“Interconnection charges” is the industry lingo for the amount paid by one cellular firm for every text message that passes through the network of another

Effective November 30, NTC’s memorandum circular no. 02-10-2011 ordering the 3 telco firms to reduce SMS interconnection charges to P0.15 from P0.35 will be in place.

Refunds

NTC said the it issued a show cause order after the telcos lowered interconnection charges but refused to heed NTC’s “request” to also reduce SMS fee they charge subscribers by P0.20.

NTC then ordered the telcos to refund subscribers the excess charge of P0.20 per SMS from the effectivity of the circular until fully settled.

“There was a savings of P0.20 but where did it go? Certainly, consumers did not benefit from it. So, that’s what we are demanding from the telcos,” said NTC legal head Dennis Babaran.

Reimbursement should be through prepaid load credits for prepaid subscribers and bill credits for postpaid subscribers, the NTC said.

In the same order promulgated November 20, the agency ordered the telcos to pay a fine of P200 per day from December 1 until such time they are able to comply with the order.

Moreover, the telcos must immediately submit within 15 days from receipt of the NTC order their records pertaining to SMS sent to other networks of all its subscribers who were charged the regular rate of P1 per SMS from the effectivity of the MC and the mode they chose to implement the refund.

“Smart will reserve comment on this matter as we review our options for seeking remedies,” said the mobile firm. Its parent Philippine Long Distance Telephone Co. (PLDT) acquired Sun Cellular in 2011. 

For its part, Globe senior vice president Froilan Castelo said the Ayala-led firm will seek all legal remedies available. “SMS is a deregulated service therefore the telcos can impose charges or set the retail price,” Castelo added.

Globe and Smart insist that there is no 1-to-1 equivalence between the cut in the interconnection charge and a reduction in the SMS rate charged to users. – Rappler.com