The Market Monitor Minding the Nation's Business
It worked.
On November 24, President Duterte warned the country’s telecommunications giants that he would open the country’s information and technology sector to foreign firms, mainly Chinese companies that have long sought entry into the local market, if telcom rates remained high.
A week later, voice rates were lowered while internet and text charges are expected to follow suit.
Arriving from New Zealand where he had a stopover after attending the Asia Pacific Economic Cooperation (Apec) forum in Lima, Peru, Mr. Duterte said, “The only way to make this country move faster to benefit the poor is really to open up communications, the airwaves, and the entire energy sector.
My decision now, at this moment ,is to open the Philippines (for business). It’s about time we shared the money of the entire country and to move faster, make competition open to all.”
Deviating from a prepared speech, Duterte cited the “Ayalas” and “Pangilinans” who control the telecommunications, power and water services.
“Who are the players? Who have the billions? ‘Multi’ is the first name, ‘billion’ is the last name. So why will I think twice? And I do not owe you anything. Precisely, I was avoiding you during the last election,” he said. “Let us open everything so that the suffering of Filipinos can end.”
Nonetheless, he said that if these companies would “dive” their rates “then there would no problem, I will forget my statement.”
On November 28, or a little over a week after the President’s speech, Philippine Long Distance Telephone Co Inc. (PLDT) lowered by as much as 40 percent its interconnection charges for voice calls to Globe Telecom mobile phones and fixed lines resulting in the reduction of rates.
“We are supporting government’s efforts to bring down the cost of telecom services in the country.
This agreement will translate in different ways to more affordable voice call rates for our subscribers,” PLDT Director and Head of Regulatory Affairs and Policy Office Ray Espinosa said.
He added that the interconnection rate for voice calls between the telco firms will be reduced to P2.50 per minute across-the-board starting January 1, 2017.
At present, mobile-to-mobile and landline-to-mobile voice calls cost P4 per minute while mobile-to-landline voice calls cost P3 per minute.
PLDT Chief Revenue Officer Eric Alberto said both PLDT and Globe are also committed to maintaining the highest quality of connection for voice calls between the two networks even as they endeavor to reduce interconnection charges.
The National Telecommunications Commission (NTC) last Thursday added that it is looking at slashing
the rate of short message service (SMS) and internet cost after the reduction in interconnection charges for voice calls.
NTC Commissioner Gamaliel Cordoba spoke of affording the public a cheap but high quality way of communication since 50 percent of the market still relies on conventional calls.
“These are the people in the provinces, especially the lower income families. They are the ones using voice calls,” he noted.
“The telcos right now, they can use the lower interconnection rates to give different promos, pocket pricing and unlimited calls; they may be crossed over from one network to another,” Cordoba said.
The NTC recently issued Memorandum Circular (MC) No. 09-11-2016 on Interconnection Charge for Voice Service, which directs that interconnection rates among the telcos’ voice services shall no longer be higher than P2.50 /minute from the previous P4 /minute charge.
The interconnection charges are also subject to an annual review by the NTC.
NTC Deputy Commissioner Edgardo Cabarios said that “effectively, the retail rates should be dropped by P1 across all plans” following the agreement signed by the telcos.
Cabarios explained that with the lower interconnection charges, the current retail rates of P6.50 per minute for mobile calls and P7.50 per minute for mobile to landline calls are expected to drop to P5.50 and P6.50, respectively.
The NTC said the new reduced interconnection charges shall be effective not later than January 1, 2017, to give sufficient time for the necessary adjustment in the operators’ respective billing system.
LUIS LEONCIO