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By Darwin G. Amojelar, Reporter
COMMERCIAL arrangements between telecommunications companies make
the cost of cell phone usage “unreasonable” in the Philippines,
with subscribers bearing the brunt.
This is the reason, says Edgardo Cabarrios, a
director of the National Telecommunication Commission (NTC), why his
agency is proposing to cut the access or interconnection charges
among the telcos.
In August, the telecommunications
commission issued a draft circular imposing a P0.15-interconnection
charge per text message, which is lower than the current rate of
P0.35.
Another circular also issued would reduce the
interconnection charge for voice calls to P1.50 or lower per minute,
or 63 percent cheaper than the current rate of P4 between mobile
operators with separate networks.
Cabarrios believes that reducing the cost of
mobile phone usage will bring down also the telcos’ landline
charges.
“The mobile phone controls the market, if you
lower its rates, the fixed line costs will follow. You should hit
the one that controls the market,” Cabarrios said.
“The reason why there’s no movement downward
in the rates of the basic phone service is because nawala yung
subsidy,” Cabarios said.
Before, Cabarrios said, the costs of the
fixedline service were subsidized by higher revenues from the
national and international long distance services.
But, with the entry of the mobile phone
services, particularly texting the landline business went down.
At present, telcos charge a monthly fee for
residential landlines of between P600 to P700 a month.
The NTC official added that one of the reasons
why landline phone rates remains high is because of the fixed
maintenance costs. “There is a fixed cost, the telephone lines
whether you used it or not must be maintained,” he said.
In Thailand, Cabarrios said the landline rates
are lower because they are implementing the metering system.
“It’s better if the telephone service is
metered because the efficiency is higher. You can use the network
more efficiently. In return, your maintenance costs are lower,” he
said.
“Efficiency means lower costs and this would
reflect in your billings,” he said.
Philippine Long Distance Telephone Co. (PLDT)
said the growth of the fixed line market, however, has remained weak
these past years because of the surge in demand for cellular
services and, in the past, due to the general sluggishness of the
national economy.
Data from NTC showed that fixed line subscribers
rose by only 8 percent to 3.9 million last year from 3.6 million in
2006.
As of last year, PLDT’s landline subscribers
stood at 2.1 million from 2 million in 2006. Globe Telecom Inc. and
its unit Innove Communications Inc. had 329,908 subscribers last
year.
For the first nine months of the year, PLDT’s
revenue from fixed line business grew by only 2 percent to P36.7
bilion from P35.8 billion last year.
The company’s revenue from local and national
long distance was down by 2 percent, while international long
distance revenues continued to decline as its dollar-linked sales
were adversely impacted by the 6 percent appreciation of the average
dollar-peso exchange rates and reduction of termination rates and
call volumes.
For Globe, wireline voice revenues also dropped
by 14 percent to P1.56 billion in the first six months of the year
from P1.823 billion on the back of declining average revenue per
user which in turn is driven by continued shift of traffic from
fixed to mobile and the impact of the strong peso and price
pressures driven by intense competition.
New WLL technology
Cabarrios said the entry of wireless landline
(WLL) service gives subscribers an option of rates cheaper than the
traditional fixed line service.
“There is a market for this kind of service as
people want mobility at a cheaper rate. The trend now is that people
want to move because of the cell phone. They want mobility while
moving around,” he said.
Cabarrios said mobile landline monthly charges
range between P500 and P600 a month, offering call and text services
within networks for free.
Bayan Telecommunications’ mobile landline is
called Bayan Wireless Landine. PLDT’s is called LandlinePLus.
Globe and Digital Telecommunications Philippines
Inc. (Digitel) also offer wireless landline service through Globe
Wireless Landline and Mango, respectively.
The International Data Corp. earlier said that
the WLL service is becoming more popular in certain markets as
operators use the technology to offer unlimited voice calls that
resemble services offered by traditional landlines.
Mobile voice
call expensive
While Cabarrios agreed that the text messaging
cost in the country is one of the lowest in the region, the demand
to lower the price of text messages is still “reasonable”
because of the higher volume.
The NTC estimates Filipinos send about 500
million to 600 million text messages a day.
At end-June, the country’s mobile phone
subscribers stood at more than 60 million. Smart Communications Inc.
and Pilipino Telephone Corp. have a combined 33.2 million
subscribers, while Globe had 22.7 million and Sun, more than six
million subscribers.
He noted that the voice call rate in the country
is “quite high” compared to the rest of Asia.
Cabarrios said the retail price of text and
voice will follow if the interconnection charges go down.
“If you have P1.50 access charge, your voice
rate will be P2 up. This is lower than the P8 that telcos are now
charging,” he said.
This is also the same in the case of SMS rates.
NTC Chief Ruel Canobas said the cut in
interconnection charge would translate to lower retail text rate per
SMS within a telco’s network.
“Definitely it will be lower because
interconnection charge is part of the cost of the retail price of
SMS,” he said.
The retail price of SMS consists of the cost of
the network sending the short message or text plus cost of the
network receiving the text plus the cost of the interconnection.
Currently, the telcos charge P1 per text
message.
The agency estimated that with a P0.35 access
charge, SMS rate may come down to P0.40-to-P0.50 range.
For voice, the NTC is proposing an
interconnection fee of P1.50 per minute, comparable with Thailand,
P1.36 to P1.70 per minute and Malaysia, between P1.24 and P1.30.
Philippine telecom companies charge their
subscribers from P6 to P8 for one-minute voice call.
If their new circular limiting interconnectivity
fees prevails, the NTC estimates the voice call charges may range
between P3 and P4 per minute.
Cabarrios also noted that lowering communication
costs in the country could lower the prices of the other products in
other industries.
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