PLDT, Globe reduce interconnection voice calls to P2.50
MANILA, Philippines (UPDATED) – By January 1, 2017, interconnection rates of Globe Telecom Incorporated's and PLDT Incorporated's voice services will no longer be higher than P2.50 per minute.
At present, the interconnection charges for mobile-to-mobile and landline-to-mobile voice calls cost P4 per minute, while those for mobile-to-landline voice calls cost P3 per minute. (READ: PCC: Make policy changes to open telco, energy markets)
The new memorandum circular (MC) on interconnection charges for voice services was signed a few days after President Rodrigo Duterte's pronouncement for telcos to lower rates or improve services or he will open the markets to foreign players.
"We made a study and compared it with other countries. The standard is between P2.20-P2.50 in other countries. Reduction is about 40% from the existing P4 per minute," National Telecommunications Commission (NTC) Commissioner Gamaliel Cordoba said in a memorandum of understanding (MOU) signing in Quezon City on Monday, November 28.
In effect, rates for voice services will be made cheaper considering the agreed interconnection charge, the latter being a component of voice calls.
According to NTC Deputy Commissioner Edgardo Cabarios, the average cost of a mobile voice call per minute is P6.50. With the reduced interconnection rates, the NTC expects retail rates for voice calls to be "lowered by about P1 per minute."
Cordoba said the MOU will serve as a guide to amend previous interconnection agreements.
"This is just the first step. It wouldn't stop with voice. It will continue with text, Internet. We will lower the prices," Cordoba promised during the ceremony.
A 'challenge' in voice revenues
For PLDT, the lowered interconnection rates would reflect a 40% drop in interconnection charges.
"Yes, the voice business is a challenge. This actually lowers the revenue that we generate from voice. Rate introduction reflected many quarters ago. The market reality is competition and market demands bringing pricing down. This is actually regulation chasing market condition," PLDT chief revenue officer Eric Alberto said during the event.
He noted that the PLDT Group has actually been bringing down voice call rates through bundled services, especially in its mobile services – Smart, Sun, and TNT.
For Globe, the new rates mean a 38% reduction in charges.
"For many years now, Globe has been strongly advocating the rationalization of interconnect access charge between the two telcos. We are confident that a reduction in the cost of interconnection for voice calls will eventually redound to a more robust economy, providing our customers with an affordable and easily accessible way of communication," Globe chief technology and information officer Gil Genio said.
The reduction of interconnection rates will not affect intra calls (Globe-to-Globe and PLDT-to-PLDT), as these are not subject to interconnection charges and are already offered to consumers on an unlimited basis. International calls will likewise not be covered. – Rappler.com