Globe to Touch Mobile access charges removed

Mobile subscribers of Globe Telecom’s Handyphone brand as well as those of Globe’s wholly-owned subsidiary Innove Communications’ Touch Mobile brand are expected to benefit from lower prices following the elimination of access charges between calls from and to both brands.

The removal of access charges is an offshoot of the recent approval by the National Telecommunications Commission (NTC) of the assignment by Innove of its TM consumer prepaid subscriber contracts in favor of Globe.

In consideration of the assignment, Globe will be paying Innove P125 per subscriber or about P1 billion.

Also, under the agreement signed by Globe president Gerardo Ablaza and Innove CEO Gil Genio on May 8, Globe shall pay Innove fees of around P950 million as well as value-added taxes of around P113 million for the use of Innove’s frequency and facilities. The annual fees shall be in lieu of all interconnect charges on calls and messages between the two networks.

Innove, however, shall continue to pay Globe the monthly capacity utilization fee of P75 per subscriber, exclusive of VAT, for the use by Innove mobile subscribers of Globe’s wireless network.

Globe used to pay P3 and 35 centavos for calls and text messages to the Innove network and vice-versa as access charges being separate brands. Now that Globe and Innove subscribers are under one management – Globe Telecom – there is no need to pay access charges.

Rivals Smart and Talk and Text, while using the same network, are considered different entities using different frequencies and therefore, call and texting between the two are considered “inter” rather than “intra” and subject to the payment of access or interconnection charges.

As of end-March 2008, Globe’s combined mobile subscriber base reached 21.27 million, up 26 percent from the same period last year. Globe prepaid users accounted for 12.44 million, followed by TM with 8.12 million and Globe postpaid with 714,000 subscribers.

As a result of the assignment, all consumer mobile subscribers using both Globe Handyphone and TM brands and products will now be managed by Globe. However, Innove will continue to manage and maintain certain private corporate customers and affinity group plans which are currently on the TM brand.

Innove will remain as a corporation and will primarily handle the Globe group’s landline business. The Touch Mobile brand will also continue to be owned by Innove.

Company officials said this will enable Globe to build on the synergies created by the earlier integration of the Globe and Innove wireless networks, as well as meet market demand with more focused services better tailored to the needs of subscriber segments.

They added that this also paves the way for more convergent and complementary services to both Globe and TM subscribers and supports government’s thrust to promote more efficient and affordable telecommunications services.

The agreement will build on the synergies earlier achieved by the integration of the Globe and Innove wireless networks that the NTC approved in 2002.

Globe consumer wireless business head Ferdinand dela Cruz said this will not only enable the company to further strengthen its market competitiveness but will also allow Globe and TM subscribers to enjoy the benefits of superior products and services at more affordable rates.

In his earlier letter to the NTC, Globe regulatory affairs head Froilan Castelo said that with the assignment, the more than eight million consumer prepaid subscribers of Innove will enjoy the benefits of the superior services, authorized tariffs, and promotions of Globe, without any diminution of whatever benefits they may be currently enjoying under their contracts.

“More importantly, access charges between calls from and to both Handyphone and TM brands will be eliminated – thus, the lowering of prices for both Globe and Innove subscribers – as the subscribers of both brands will commonly become Globe Telecom CMTS subscribers, albeit under different brand names and plans,” Castelo explained.

Also, Dela Cruz explained that the assignment allows Globe certain flexibilities to offer market promotions for both brands.

The benefit of the transfer of TM subscribers to Globe, he said, is exemplified by the three new promos.

With the assignment, Globe’s unlimited text promo will now extend to Globe to TM texting. In the same way, TM’s Todo Text promo will now be available for texting from TM to Globe subscribers.

Prior to the assignment, Globe and TM were considered separate brands having separate networks and therefore, they can only offer unlimited or bulk promos within their own brands.

Also, Globe’s bulk text promo (Sulit Text) which used to be P15 for 100 Globe to Globe text messages will now extend to Globe to TM messages. On the one hand, TM’s own bulk text promo of P10 for 75 messages will apply not only to TM to TM messages but also to TM to Globe texting.

The third promo, known as Everybody Text, will also be expanded. Globe’s P20 for 100 text messages to another Globe subscriber (plus 10 SMS to other networks) will now apply to Globe to TM texting. Vice-versa, TM’s P10 for 55 messages to another TM subscriber (plus five SMS to other networks) will now benefit TM to Globe messaging.