Globe proposes 3-year lowering of interconnection fees

Wednesday, July 13, 2011

GLOBE Telecom recently proposed a three-year plan to reduce interconnection rates in support of the National Telecommunications Commission’s (NTC) request for telecommunication companies to lower interconnection charges.

In a statement, Globe Telecom submitted a position paper detailing its proposal on reducing fees for subscribers calling and sending texts outside their respective networks.

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Globe proposed a three-year “glide path” implementation beginning Jan. 31, 2012 to allow mobile operators more time to restructure business plans and models, given changes in pricing schemes as well as to help cushion possible losses in revenues.

The NTC has been pushing for lower interconnection charges for voice calls from P4 to P1 per minute within the next three years. It also requests charges for text messages be reduced from the current P0.35 per text to P0.15 per text.

Globe said studies show the Philippines as having one of the highest voice termination rates in the Asia Pacific region, averaging at $0.10, with most countries only in the $0.03-0.05 range.

Under the proposal submitted by Globe, charging for interconnection charges for voice calls will be at P2.50 on the first year, P2 on the second year, and P1.50 on the third year. For SMS, charging will be P0.25 on the first year, P0.20 on the second year and P0.15 on the third year.

For landline, charging will be P2 on the first year, P1.50 on the second year and P1 on the third year.

“Globe is in full support of NTC’s call to lower domestic interconnect rates among telcos. In fact, Globe also supports mobile to landline interconnection and vice versa, where interconnection fees should also be reduced,” said lawyer Froilan Castelo, head for corporate and legal services group of Globe.