NTC: Telcos to refund P7B to subscribers

MANILA, Philippines - Telecommunication companies would have to refund over P7 billion to subscribers for failing to roll back the cost of text messages, the National Telecommunication Commission (NTC) said yesterday.

According to Edgardo Cabarios, NTC director for the Common Carriers Authorization Department, the wireless arms of Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom Inc. would have to effect the refund within 30 days from receipt of the order dated May 7.

Cabarios said about 10 percent or 200 million of the two billion text messages sent by subscribers of PLDT’s Smart Communications Inc. and Digitel Mobile Philippines Inc. or Sun Cellular, as well as Globe, are charged the regular rate of P1 per text.

He pointed out that 20 percent or 40 million of the 200 million text messages that are charged the regular rate of P1 per text are “off-net” or sent from one network to another.

Of the 40 million text messages charged P1 for a total of P40 million, Cabarios said the telco providers would have to refund P0.20 or P8 million per day under the NTC Memorandum Circular 02-10-2011 or the “Interconnection Charge for SMS” that took effect December 2011.

Cabarios said telco providers would have to refund at least P8 million per day for 880 days for a total cost of P7.04 billion.

On top of the refund, each telco provider would have to shell out P160,000 for failing to comply with the order.

Last May 7, the NTC issued separate orders denying the motions for reconsideration filed by Smart, Sun Cellular and Globe filed in December of 2012 seeking to reverse NTC’s order on the roll back of short messaging system (SMS) rates to P0.80 from P1 in December 2011.

The NTC circular that took effect in December 2011 supposedly reduced the SMS or text interconnection charge to P0.15 from P0.35 for the purpose of making text messaging more affordable to the public pursuant to the directive of the Office of the President.

This should have lowered the rate to P0.80 per text message instead of P1 per text message as early as Dec. 1 last year.

The companies were directed to refund or reimburse their subscribers the excess charge of P0.20 per off-net text messages sent from one network to another network from the effectivity of the circular until fully settled.

The NTC computed the retail price of off-net text messages based on the cost of the network sending the message plus the cost of the network receiving it plus the cost of the interconnection facilities as clearly emphasized in the circular.

The NTC pointed out the savings realized from the reduced interconnection charge on text messages sent to other networks was formulated not to simply benefit the telcos but was intended for them to pass on the savings to their subscribers.