Telcos to fight NTC circular

CEBU, Philippines - Telecommunication operators in the country will explore legal avenues to fight  the implementation of National Telecommunications Commission (NTC) memorandum circular (MC) 11-24-2011 lowering interconnection rates and requiring mobile operators to refund subscribers for the alleged excess charge for text messages.

In an interview, Yoly Crisanto, Globe Telecom head for corporate communications, said that since the telecom industry in the Philippines is a deregulated sector, it has the right to set the retail prices of their services.

In fact, Crisanto said, because of the intense competition telecom operators are lowering the prices of their services, specifically text messaging via unlimited offers which benefit  the consumers.

“The prices of telecom services, including text message,  had gone down drastically. We have been giving premium discounts,” said Crisanto adding that a ceiling rate for text message is not needed.

“Globe will use all legal remedies and gounds to preserve its right to determine its pricing [for services],”  she said.

Likewise, Smart Communications said   that it will seek a reconsideration of the NTC decision.

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

The said circular, which was issued on October 24, 2011, required mobile phone operators to reduce interconnection charges from P0.35 to P0.15 per SMS.

These 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.

Second, under the law and existing NTC regulations, SMS is a deregulated service. The rate-fixing power of the NTC is residual in nature and may be exercised only under specific circumstances.

Republic Act No. 7925 states that such residual powers can be exercised only 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 No. 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.”

Competition in the Philippine telecommunications industry remains fierce. Mobile operators are 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.  – (FREEMAN)