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TRANSPORTATION and Communications Secretary Leandro
Mendoza said phone companies should honor the new
policies, which their regulators are proposing to
implement.
Mendoza,
in an interview Wednesday, refused to comment on Globe
Telecom’s counterproposal to lower text-messaging fees
to P0.50 from P1 in lieu of the National
Telecommunications Commission’s (NTC) move to bring down
the cap on text and voice access charges.
“There
will be public hearings on that and the NTC will be in
charge of it. I have directed the NTC and the NTC has
issued draft circulars on that. So, they should respect
the memorandum circulars (MC),” said Mendoza.
For its
part, Smart Communications Inc.—which corners 55 percent
of the market share—also rejected the plan of the NTC to
limit interconnection charge to P0.15 from P0.35 on
short-message service or SMS and to P1.50 from P4 per
minute on voice calls between cellular providers
operating separate networks.
The NTC
issued the draft policies following a directive from the
Department of Transportation and Communications (DOTC)
last May 26 to “promulgate rules to effectively carry
out the objective or reducing or lowering communications
costs, and in order to maintain and foster fair
competition in the telecommunications industry.”
Initially, the DOTC wanted SMS to be free of charge. But
this pronouncement was widely criticized by the phone
firms. They said this will only make the situation worse
because they anticipate a deluge of text messaging if
this is finally implemented.
“Our
objective is really to lower the cost of
telecommunication services and the NTC has responded to
that directive by issuing the said circulars,” added
Mendoza.
The two
cellular firms said the proposed policies are illegal
and anti-investment.
“Indeed,
investors come to other countries when they perceive
that the country’s economic or financial policies are
reasonable and, more important, stable and firm. The
current attempt to violate clear and mandatory
provisions of Republic Act (RA) 7925, via the issuance
of the proposed administrative circulars, which is worse
than administrative flip-flopping, is definitely
anti-investor and anti-investment. We need not say
more…The imposition of the subject circulars must be
stopped because they are contrary to law,” said Globe
senior vice president for corporate and regulatory
affairs group, Rodolfo Salalima, recently.
RA 7925
provides that access charge sharing agreements between
all interconnecting carriers shall be negotiated between
parties and the agreement between parties shall be
submitted to the commission. In the event the parties
fail to agree within a reasonable period of time, the
dispute shall be submitted to the NTC for resolution.
Smart
had pointed out that interconnection is a voluntary
commercial transaction. As such, each party is expected
to benefit, or the nonbeneficiary will not make the
deal. It offers no benefits to the unwilling company if
the transaction results in returns less than the cost of
capital which makes the investment economically
inefficient.
“It
should be the goal of regulation to encourage
economically efficient investment to promote the
long-term interest of end users. If regulation is used
to compel cellular operators to engage in involuntary
transactions, which results in lower returns on capital
employed or economically inefficient investment, both
practical [end-users will suffer] and legal and
constitutional [unlawful taking of property without due
process of law and violation of the rights to contract]
issues will arise,” Smart said.
Smart
believes that the adverse effects of implementing the
proposed policies may be more damaging to the industry
and, ultimately, to the consuming public, than the gains
that are expected and hoped from their implementation.
Globe
has proposed to offer an off-net short message service
(SMS) rate of P20 per 40 texts per day in-lieu of the
agency-proposed cap on voice and access charges.
Effectively, the cost of one SMS sent by a Globe
subscriber to another network will be P0.50.
“It is
hoped and we pray that this offer, which is in response
to the move in the Lower House of congress and is the
end-objective of the NTC and the DOTC, will put to a
definite close further discussion of the subject
circulars,” said Salalima.
Apart
from the proposed new promo, Globe currently offers
SULITXT (P10 for 75 Globe-Touch Mobile or TM SMS) and
EVRYBODYTXT (P20 for 100 text sent within the network
plus 10 SMS sent to other networks). Effectively, one
SMS cost P0.13 under Globe and TM’s SULITXT while the
bundled EVRYBODYTXT promo yields a rate of P0.15 per
text sent within Globe’s network and P0.50 per text sent
to other networks.
Taking
into account promo utilization ratios, Globe’s average
cost of on-net text is 17 centavos per text; off-net
text costs 87 centavos per text for a blended average
cost of 22 centavos per text, Salalima pointed out. |
