Telcos express concerns over lower interconnection charges

By Alvin Elchico, ABS-CBN News

Posted at Jul 04 2011 07:19 PM | Updated as of Jul 05 2011 03:27 PM

MANILA, Philippines - Telecommunication firms have asked the National Telecommunications Commission (NTC) to study carefully a plan to lower interconnection charges as this would result to huge revenue losses.

The NTC held a hearing on Monday on its proposal to cut charges for calls and text messages sent between rival mobile networks.

The NTC wants to lower interconnection charges for calls to P1 per minute, and texts to 15 centavors, in the next three years. Currently, interconnection fees for calls and texts are P4 and 35 centavos, respectively.

While there was no direct objection to the reduced rates, Globe Telecom Inc. asked the NTC not to implement these immediately.

Philippine Long Distance Telephone Co. and unit Smart, on the other hand, questioned why the regulator compared rates in the country with others in the region, pointing out that costs are higher in the Philippines because local telcos import their equipment.

Sun Cellular, unit of Digital Telecommunications Philippines Inc., meanwhile, raised concern that syndicates will take advantage of lower interconnection charges to "steal" calls and text messages.

Despite these concerns, the NTC said it would push through with the reduced rates once public hearings on the issue end.

The telcos admitted the NTC's proposal will cost them a lot of money.

Consumers group TXTMate, however, believes the lower rates will be good for the mobile phone industry in the long run as these would improve telcos' efficiency, as well as competition.