Telcos to appeal SMS refund order

MANILA, Philippines - Major telecommunication providers led by PLDT’s Smart Communications Inc., Digitel Mobile Philippines Inc., and the Ayala-controlled Globe Telecom Inc. refuted accusations of the National Telecommunications Commission (NTC) that they overcharged subscribers and said NTC had no basis to order a refund.

In a statement, Smart said it will seek a reconsideration of the NTC’s decision that it violated provisions of Memorandum Circular 11-24-2011.

“First, our position is there is no basis for finding that Smart has violated the NTC memorandum circular and overcharged its subscribers,” the company said in a statement.

Smart argued that the circular issued by NTC last Oct. 24, 2011 required mobile phone operators to reduce interconnection charges to P0.15 per short message service (SMS) or text message from P0.35.

Interconnection charges pertain to rates that mobile phone operators charge each other in order to deliver text messages from other networks to their own subscribers.

“Smart has already complied with this circular. The said circular did not order mobile phone operators to reduce retail rates that are charged to customers,” Smart explained.

Smart went on to explain that Republic Act 7925 states that NTC’s residual powers “can only be exercised when ruinous competition results or when a monopoly or a cartel or combination in restraint of free competition exists and the rates or tariffs are distorted or unable to function freely and the public is adversely affected.”

“None of these conditions exists. In fact, the Public Telecommunications Policy Act (Republic Act 7925) clearly states that the NTC shall exempt any specific telecommunications service from its rate or tariff regulations if the service has sufficient competition to ensure fair and reasonable rates or tariffs.”

Smart said competition in the country’s telecommunications industry remains very keen, resulting to mobile operators offering a wide range of competing service offers – including bucket and unlimited packages – in their drive to attract and retain subscribers. “

“As a result, Filipino consumers are enjoying SMS services that are among the most affordable in the world,” it said.

Digitel – operator of Sun Cellular – said in a separate statement that it would also appeal the NTC decision. – Aurea Calica