[November 16, 2009] Cut in interconnection costs pushed Tweet Nov 16, 2009 (The Manila Times - McClatchy-Tribune Information Services via COMTEX) -- THE National Telecommunications Commission (NTC) has to cut interconnection charges among mobile phone service providers to stimulate greater use in a maturing market, according to an international research firm. Natin Bhat, Frost & Sullivan senior vice president in Asia Pacific, told reporters that access charges are "high" in the Philippines compared with other countries. "It [interconnection charge] has to come down to pick up usage," Bhat said. Bhat said the growth rate in the country's mobile phone industry is beginning to slow "as we are getting closer to market maturity. " He said the Philippine telecom industry is likely to grow 6 percent a year starting 2009 until 2012. Bhat said interconnection charges should come down by 30 percent to 40 percent in the next two years. The reduction of access charges, Bhat said will entice more people to use voice and text services. At end-September, the country's mobile phone subscribers stood at more than 74 million. Last year, the NTC issued a draft circular imposing a P0.15-interconnection charge per text message, lower than the current rate of P0.35. A separate circular would also reduce the interconnection charge for voice calls to P1.50 or lower per minute, or 63 percent cheaper than the current rate of P4 between mobile operators with separate networks. At present, the telecom players impose P1 per text and P6 per minute for voice calls. The agency estimated that with a P0.35 access charge, the short messaging service (SMS) rate may come down to the P0.40-to-P0.50 range. For voice, the NTC is proposing an interconnection fee of P1.50 per minute, comparable with Thailand, P1.36 to P1.70 per minute; and Malaysia, between P1.24 and P1.30. With the new circular, NTC estimated the voice call charges may range between P3 and P4 per minute. The circulars have been pending before the NTC due to the opposition by the big telecom players such as Smart Communications Inc. and Globe Telecom Inc. Smart and Globe earlier said that the cap on interconnection charges will discourage further investments in the industry as telecom companies cannot expect a reasonable period of time for the return on their investments. The two telcos said the rates for voice services have also been going down as mobile service providers provide service packages that offer lower calling rates. They added that the P1 per SMS charge is already one of the lowest in the world, pointing to SMS rates in Singapore at P1.60 per text; Thailand, P2.70; Indonesia, P0.46; Australia, P10.50; Canada, P6.62; Middle East, P1.16; United Kingdom, P2.59; South Africa, P1.28 and Malaysia, P1.35. Smart and Globe also said the voice rate of between P5.50 and P6 per minute is lower than Mobile One's P5.11, Far Eastone's P6.80, CTM's P7.44, IDEA's P10.10, and Optus' P19.56. Maxis of Malaysia charges P4.02 per minute. To see more of The Manila Times, or to subscribe to the newspaper, go to http://www.manilatimes.net. Copyright (c) 2009, The Manila Times, Philippines Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. [ Back To TMCnet.com's Homepage ]