The National Telecommunications Commission (NTC) on October 24 issued memorandum circular (MC) 02-10-2011 on the new interconnection charge for short message service (SMS), which is paid by one cellular firm for every text message that passes through the network of another.
Under the rules, the new interconnection fee for each SMS is 15 centavos, a cut from the current 35 centavos per text.
This directive shall take effect not later than 20 days upon the effectivity of the circular, which will be on November 8 or 15 days after the publication of the MC from the day it was signed by the NTC commissioners.
The same MC also orders all phone firms to amend their interconnection agreements to comply with the new circular within 10 days from November 8.
“Each of the parties to the interconnection shall provide the interconnection links or circuits required to carry their respective SMS traffic. The parties shall ensure that termination equipment is sufficient to connect the interconnection links or circuit to their respective networks. The parties shall provide the interconnection links and facilities with sufficient capacity in a timely manner,” the NTC order said.
In line with this, cellular firms must ensure that their facilities are sufficient to guarantee that 99 percent of SMS are received by the addressees within 30 seconds from the time the texts are sent.
“Violations of the prescribed guidelines shall be imposed penalties pursuant to existing laws, rules and regulations,” the NTC said.
In the first draft MC released on June 28, the NTC proposed an interconnection rate of up to 25 centavos per SMS on the first year; a maximum of 20 centavos on the second year; and not higher than 15 centavos on the third year onward.
But the regulators revised this.
“SMS is widely used by the public in their day-to-day activities. It is the cheapest form of communication so we want our consumers to benefit from this as soon as possible,” NTC Commissioner Gamaliel Cordoba said.
He said consumers may pay only 30 centavos for a regular text message from the current P1. The retail price of SMS consists of the cost of the network sending the short message plus cost of the network receiving the text plus the cost of the interconnection facilities.
The NTC is also contemplating on reducing interconnection charges for cellular voice. Released also on June 28, the agency wants to set interconnection charges for cellular voice at a maximum of P2 per minute during the first year; not more than P1.50 on the second year; and a maximum of P1 on year three onward.
A phone firm currently charges another carrier P4 per minute on interconnection for voice calls.
Interconnection rates to mobile-service operators in the Philippines remain one of the highest in the region, the NTC noted. In Thailand and Malaysia, the charges range from P1.36 to P1.70 per minute and P1.24 to P1.30 per minute, respectively.
