DOTC directs NTC to seek measures to lower telecom costs

The Department of Transportation and Communications (DOTC) has directed the National Telecommunications Commission (NTC) to seek measures to lower the cost of communications – particularly voice and text messaging.

In an interview, NTC deputy commissioner Jorge Sarmiento told The STAR that they recently met with DOTC Secretary Leandro Mendoza who gave the directive, amidst calls for the lowering of text messaging charges.

Mendoza first brought up the idea of mandating local mobile phone service operators to render their text messaging services to their subscribers for free, a plan that immediately drew flak from the three mobile phone firms Smart Communications, Globe Telecom and Digitel Mobile (Sun Cellular).

Sarmiento said the NTC is drafting a memorandum circular that will provide for the lowering of cost of communications. This can be achieved by lowering access charges on off-net text messages (i.e. from Smart to Globe and vice-versa).

He explained that at present, while the on-net (i.e. Smart to Smart) access charge for text messaging is as low as 13 centavos per message, the off-net access charge is as high as 35 centavos per text. “The facilities cost is another 30 centavos, which explains why the text messaging rate for off-net is P1 per text,” he said.

He also revealed that the interconnection charges for off-net voice traffic will also be subject to review.

Asked on whether the NTC has the power to mandate the lowering of access charges, Sarmiento said this matter is still being studied. “Anyway, the proposed memorandum circular will still be subject to public hearing,” he said.

Sarmiento also pointed out that as far as he knows, there is nothing in the legislative franchises of telcos that mandates them not to charge subscribers for text messages.

House committee on information and communications technology chairman Rep. Joseph Santiago said he is not aware of any provision in the franchises of telcos that requires text messaging services to be given for free. “This is a purely commercial affair. No business will invest nor render services for free. If text messaging service is classified as a value-added service, does it follow that all those classified as VAS such as Internet services should be rendered for free,” he pointed out.

Meanwhile, Philippine Long Distance Telephone Co. (PLDT) policy and regulatory head Ray Espinosa emphasized that Smart, Piltel and CURE, which comprise the group’s wireless business all have the legal authority and right to charge for texting under their respective franchises.