MANILA, Philippines - Telecommunication providers PLDT Inc. and Globe Telecom Inc. have agreed to lower interconnection charges starting Jan. 1, 2017 in a bid to reduce the rates of mobile and fixed line calls in the country.
Both companies yesterday signed a memorandum of understanding with the Department of Information and Communications Technology (DICT) to decrease interconnection charges to P2.50 per minute.
Currently, the charges for mobile-to-mobile calls across operators, as well as landline-to-mobile voice calls, cost P4 per minute, while mobile-to-landline voice calls reach P3 per minute.
The agreement is pursuant to the National Telecommunications Commission (NTC)’s issuance of memorandum circular 9-11 series of 2016 on interconnection charge for voice service.
“We made a study and compared it to other countries. The average (interconnection charge) is around P2.25 to P2.50 so the deduction we made right now is around 40 percent of the existing P4. And it will be subject to constant review on an annual review based on the memorandum circular that we issued,” NTC commissioner Gamaliel Cordoba said.
According to the NTC, the reduction in interconnection rates would translate to more affordable voice services starting next year, especially for the lower income sector and non-smartphone users.
The reduced retail rate would depend on the various plans and bundles offered by the companies.
“Around 50 percent of the market still rely on conventional calls. These are the people in the provinces, especially the lower income families. They are the ones using voice calls,” Cordoba said.
“The telcos right now, they can use the lower interconnection rates to give different promos, pocket pricing and unlimited calls, they may be crossed over from one network to another,” he added.
In a statement, PLDT director and head of regulatory affairs and policy office Ray Espinosa said the company is supporting government’s efforts to bring down the cost of telecom services in the country. For his part, Globe chief technology and information officer Gil Genio said the new interconnection rates could also help the company be more aggressive in driving the growth of voice call services amidst the rising demand in data services.
PLDT chief revenue officer Eric Alberto said both operators are still committed to maintaining the quality of connection for voice calls despite the cut in charges.
“The PLDT Group has actually been bringing down voice call rates through bundled services, especially in its mobile services – Smart, Sun and TNT,” he noted.
“We were the first to introduce unlimited voice calls from the PLDT Group mobile networks to a PLDT landline and between any of the mobile services Smart, Sun and TNT. This unlimited service resulted in much lower voice call charges among PLDT’s over 70 million subscribers,” he added.