To Smart, Globe, Sun, refund P111 million for illegal text charges – Bayan Muna


MANILA – Lower texts rate now and sanction non-complying telecommunication firms.

This was the demand of the progressive party list group Bayan Muna as its members held a protest in front of the offices of the National Telecommunications Commission (NTC) early this week. The group decried what it said was the NTC’s “inutility” in sanctioning the country’s telecommunications companies for ignoring the commission’s order to lower rates for short message services ( SMS or more popularly known as texts messages). The group also pushed the NTC to order the telcos to refund consumers. Based on reports, the telcos Smart, Globe and Digitel owe their subscribers at least P111 million ($2.58 million) because they continue to charge 20 centavos more for every text.

Rates should have been lower by 20 centavos since November 30 after the NTC issued memorandum circular 02-10-2011. The circular prescribes the maximum interconnection charge for text messages and the new fees should be imposed not later than 20 days from the circular’s effectivity. The circular took effect last November 10. The agency is also considering cutting interconnection charges for cellular voice calls at a maximum of two pesos per minute during the first year; and not more than P1.50 on the second year; and a maximum of one peso on year three onwards. The country’s telcos currently charges each other four pesos per minute on interconnection for voice calls.

If the proposal is approved, voice call rates can be lowered to between three to four pesos ($0.069 to $0.093) per minute on the first year; two pesos ($0.046) per minute on the following year; and one peso ($0.023) per minute on the third year onwards. Currently, cellular voice call rates are pegged at P6.50 ($0.15)( per minute. Mobile phone interconnection rates were last adjusted in 2003.

The NTC said interconnection rates to mobile service operators in the Philippines is still one of the highest in Asia.

Based on reports, the telcos Smart, Globe and Sun owe their subscribers at least P111 ($2.58 million) million for still collecting the 20 centavos that should have been deducted since November 30. Recently, Bayan Muna Rep. Teddy Casiño said the NTC and the telcos risk being the subject of a congressional inquiry and the latter may lose their franchises if the refund is not released immediately.

Casiño said the telcos should refund the P111 million ($2.58 million) which is the total amount in five days of the 20 centavos reduction in the interconnection charge for text messages which they have refused to implement.

He explained that the estimate is based on data extrapolated from the latest financial reports provided by the telcos themselves, which reveal a gross income of at least P185 million ($4.30 million) per day from text messaging services.

Assuming half of the text messages are between telcos and subject to interconnection fees, the 20-centavo reduction in said fees would mean the telcos have been overcharging their consumers by P18.5 million ($430 thousand) per day, or a total of P92.5 million ($2.15 million) for the five days that the NTC order remains unimplemented.

“This is a conservative estimate considering the fact that as text capital of the world, some 1.5 to 1.8 billion text messages a day are sent in the Philippines. In some of our computations, the overprice even reached five times this amount,” said Casiño. “The telcos should immediately comply because this amount increases by the day and consumers deserve this break considering that SMS messaging should be free in the first place. The telcos should not force us to call them into an investigation in Congress or revoke their franchises.”

Casiño also criticized the NTC for its failure to lay down sanctions against the erring telcos.

“The NTC should stop being inutile and immediately sanction mobile operators who failed to comply with its order to reduce interconnection fees for text messaging. The government should show these giant companies they can’t simply ignore a lawful order and get away with it. How would the telcos follow the NTC when they know that they can circumvent its orders just like that? “ he said.

Consumers deserve good service

Consumer rights advocacy groups Computer Professionals’ Union (CPU) and TXTPower, for their part, also demanded that the NTC lay down the law against the telcos.

CPU’s Rick Bahague said consumers have been paying an excess of 20 centavos per text since November 30 and an refund is immediately in order. He pointed out that in 2009 alone , Globe and Smart recorded 800 million and about 1 billion messages, respectively. “A combined SMS traffic of 1.8 billion messages per day passes through the largest telcos. The NTC should sanction telcos now Smart, Globe and Digitel, which continue to defy the NTC order and continue to charge more on their services,” he said.

Bahague also shared that Globe on its blog site said that the memorandum will allow them to “offer more aggressive and competitive SMS” based on their usual promos.

“Not all consumers avail of their promos. As consumers, we should be given high quality and cheaper service not only during the promo periods,” he said.

CPU is currently running a survey on the quality of services of broadband providers. Visit the survey form here, (

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