July 22, 2018, 11:23 pm
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NTC to lower interconnection charge

The National Telecommunications Commission (NTC) is set to release this month the memorandum circular (MC) that will lower interconnection rates on voice and short messaging services (SMS) – one of the government initiatives to help the incoming third telecom player compete with the incumbent telcos.

Edgardo Cabarios, NTC deputy commissioner, said the MC will lower interconnection rates on voice services to P0.50 per minute from the current rate of P2.50 per minute, and SMS to P0.05 per text from P0.15 per text.

The MC will be issued by July17 or 18, according to Cabarios, just over a month after the public hearing as no major issues were raised by the telcos.

Lowering interconnection rates is one of the major issues that needs to be resolved by the government to ensure the successful implementation of the selection process for the country’s new major telecom player in the third quarter this year. This will also ensure the sustainability of its operation.

Despite the 80 percent reduction on interconnection charges, NTC mandated the telcos to deliver better quality services. 

“The network providers shall comply with the prescribed quality of service or service performance standards,” NTC said.

Manuel Pangilinan, PLDT Inc. chairman and president, earlier said the implementation of the MC will have minimal impact on company revenues – around P200 million in relation to the telco’s billion revenues on voice and SMS services.

Pangilinan also pointed out the current prices of traditional call and text services are significantly lower due to the unlimited and bucket price offerings.

Meanwhile, the Department of Information and Communications Technology (DICT)is meeting theoversight committee this week to present the result of last week’s public consultation on the terms of reference (TOR) for the selection of a new telecom player.

Based on the results of the survey conducted during the consultation, majority of the local telcos and guests preferred the highest committed level of service (HCLoS) as a mode of selection for the new player, rather than auction as proposed by the Department of Finance (DOF).

The oversight committee is composed of the DICT, DOF, Office of the Executive Secretary and the National Security Adviser.

Eliseo Rio, DICT acting secretary, said he will propose toPresident Duterte and the oversight committee that the HCLoS be used as the auction will not benefit the subscribers in the long run.

“The Filipino people will gain nothing from the auction of frequencies for they will pay for it in the long run, as it will only be passed on to them by the winning bidder to recover the amount it paid,” Rio said.  

“It will, in fact, just make telco services more expensive than when the frequencies were awarded free. It will just make the winning telco uncompetitive to the duopoly that never paid the Filipino people for their frequencies. Thus, an auction will not benefit the Filipino people, it will only benefit the duopoly,” he added.

Using the HCLoS, the winning bidder will be selected based on national population coverage, minimum average broadband speed, and annual capital and operational expenditure, computed annually over a five-year period.

The annual minimum levels for each of the criteria are 30 percent for the national population coverage, 5 megabits per seconds for the minimum average broadband speed and P40 billion for the capital and operational expenditure.

Other qualifications include acongressional franchise, paid capital of at least P10 billion and one member of the consortium must have experience in the provisioning, delivery and operation of telecommunications services for the last five years.

Using the auction, the prospective bidders should place a minimum bid of P6.28 billion.

If all goes smoothly, the DICT said it expects to have a new major telecom player by October this year.
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