Telcos insist on prepaid load expiry citing 'carrying cost'

Job Manahan, ABS-CBN News

Posted at Jan 27 2021 05:11 PM | Updated as of Jan 27 2021 05:20 PM

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MANILA — Telecommunications companies on Wednesday opposed calls to remove the expiration date for prepaid cell phone credits saying this will affect telcos' system maintenance and burden them with “carrying cost.”

Removing the expiry date for loads will also affect telcos ability to offer promos, an official of Globe Telecom said during a Senate hearing on the proposed Prepaid Load Forever Act. 

“It is a limited rollout and it's a limited number of subscribers because that is only the number of subscribers that are capacitized by the system,” said Globe head of policy division, corporate and legal services Ariel Tubayan. 

Prepaid loads, at present, expire after 1 year, according to Tubayan. 

PLDT-Smart also said removing the expiry dates for prepaid credits will strain networks and lead to higher system maintenance. 

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Roy Ibay, Smart Vice President for legal and regulatory group, said the National Telecommunications Commission (NTC), Department of Information and Communications Technology (DICT), and the Department of Trade and Industry (DTI) recognize the burden of carrying cost to telco firms if prepaid loads don’t expire. 

“The compromise between the carriers, DTI, NTC, and DICT way back in December 2017 was really to come up with a load period so interest would be balanced,” Ibay said. 

An advocacy group meanwhile proposed an alternative to prepaid load expiry. 

“The expiry should be treated as how the banks used to do it with passbooks," said Tito Pierre Galla, co-founder of Democracy.Net.PH. 

"You have a minimum maintaining balance, if your account is inactive for x amount of time, babawasan siya ng piso (a peso will be deducted) for example for everyday until it gets zeroed out,” Galla said. 

“In this way, it becomes a win-win solution for the consumers and the telcos, the only question now is what is the definition of inactive,” he added. 

The NTC meanwhile backed calls to scrap prepaid load expiry. 

“[Prepaid] is not the same as the [postpaid], yung [postpaid or] wired kasi naka-dedicate yung line sa’yo eh so there is that carrying cost. Yung mobile (prepaid) wala po ‘yun eh because there is no line... so lumiit nang lumiit po yan so that's the reason why I support the non-expiry, provided that pagka hindi ginagamit, binabawasan hanggang maging zero,” said NTC Deputy Commissioner Edgardo Cabarios.

(Postpaid users have dedicated lines, so there is the carrying cost, but a mobile or prepaid user does not have dedicated lines, so the line allocation becomes smaller and smaller. That’s the reason why I support the non-expiry provided that an amount will be deducted until it becomes zero.) 

The Senate Committee on Public Services and the Committee on Trade, Commerce and Entrepreneurship will form a technical working group to polish the Prepaid Load Forever Act for the Senate’s committee report. 

Sen. Sherwin Gatchalian in 2019 noted that Globe and PLDT, the country’s leading telco firms, have a combined prepaid subscriber base of 142.43 million, which accounts for 96.6 percent of the country’s mobile users. 

The two firms have 5 million postpaid subscribers.