NTC okays 15% hike in Smart's monthly billing

The National Telecommunications Commission (NTC) has given Smart Communications Inc. the go-signal to raise its monthly charges for basic telephone service by 15 percent.

However, the regulatory body has deferred approval of Smart's request to implement phone metering until after the guidelines are issued by the Department of Transportation and Communications.

Metering or local measured service (LMS) is a billing system which charges telephone subscribers for every minute of call made.

At present, PLDT and most of the carriers offer unlimited local calls for a certain fixed rate.

Smart currently charges P440.30 and P913.44 for its some 150,000 residential and business customers, respectively.

The NTC decision, thus, increases the rates by P67 for residential and P141.50 for business.

The new charges will take effect once an announcement is made by Smart via a newspaper with nationwide circulation.

Smart's move to ask for a rate hike was prompted by the continuous decline in international toll revenue brought about by the reduction in the revenue share between local and international carriers for every minute of processed call.

With the situation, Smart and the other players would have difficulties subsidizing the capital extensive, yet low yielding local exchange carrier (LEC) service.

Moreover, the operation of international simple resale (ISR) and the growing popularity of voice over Internet Protocol (VoIP) contributes further in decreasing the ability of international gateway facility (IGF) operators to fund their LEC service.

"Since the ability of the IGF operator to provide subsidy to the LEC is threatened by the continuous decline in the accounting rates and settlement operation of the ISR and VoIP, the commission to give the authority to the applicant to balance its rates," the NTC said.