NTC order to cut telcos’ interconnection fees lands PHL now with 3rd lowest rates in Asean

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WITH the National Telecommunications Commission’s (NTC) order to lower the interconnection fees among telcos, the Philippines now ranks as the third nation—after five countries—in Southeast Asia with the lowest interconnection charges.

Thursday saw the regulator ordering telcos to lower their interconnection charge to 50 centavos per minute from P2.50 for voice calls, and to five centavos from 15 centavos for every text message.

An interconnection rate is a fee collected by a telco whenever a subscriber calls or texts another person from a different operator.

Telcos are required to amend their interconnection agreements to comply with the NTC memo within 10 days from its effectivity date, which is pegged for some time next month.

Before the lowering of the said charges, the Philippines had the highest interconnection rate for voice calls in the Asean. With the new matrix, it now ranks as the third country in terms of the lowest interconnection rates for calls.  Telecommunications companies in Singapore, Myanmar and Brunei Darussalam do not charge any interconnection charge, while Malaysian telcos only impose a 48-centavo-per-minute charge.

The highest in the Asean today is Cambodia, which allows telcos to charge interconnection fees of P2.42 per minute, followed by Vietnam at P1.26 per minute, Indonesia with 93 centavos per minute, Lao PDR with 73 centavos per minute, and Thailand at 56 centavos per minute.

According to the memo, the lowering of interconnection charges in the Philippines is for “the best interest of the ordinary Filipino consumer.”

The last round of reduction of interconnection fees was done in 2016.

Acting Information Secretary Eliseo M. Rio Jr. ordered the regulator to reduce further the interconnection fees in May to facilitate the entry of the future third telco player.

The said initiative is also part of the four issues that were raised by an oversight committee for the selection of the new major player in the telco market two months ago.

Rio has said that cutting interconnection rates further between public carriers can help the potential third player compete better against incumbent telcos. Having standard interconnection fees will eliminate the factor of choosing an operator on the basis of the current subscriptions of friends and families.

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Lorenz S. Marasigan

Sources regularly see Lorenz at telco and transport conferences. He graduated from the University of Santo Tomas, and has been covering the beat since 2013. He likes to featurize stories, and tries to find another angle for spot news. He travels during his spare time, and likes his coffee black -- no cream, no sugar.
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