Globe proposes 3-year plan to reduce interconnection rates

13 Jul

In support of the National Telecommunications Commission’s (NTC) request for telecommunication companies to lower interconnection charges, Globe Telecom submitted a position paper detailing its proposal on reducing fees for subscribers calling and sending texts outside their respective networks.

In the position paper, Globe proposed a 3-year “glide path” implementation method beginning January 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 pushes interconnection charges for voice calls be lowered to P1 per minute from P4 within the next three years. For text messages, NTC requests charges be reduced to P0.15 from the current P0.35 per text. According to studies, the Philippines has 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 is at P2.50 on the first year, P2.00 on the second year, and P1.50 on the third year. For SMS, charging is P0.25 on the first year, P0.20 on the second year and P0.15 on the third year, which is congruent with the NTC’s proposal. For landline, charging is P2.00 on the first year, P1.50 on the second year and P1.00 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. This way, subscribers will experience lower service charges,” said Atty. Froilan Castelo, Head for Corporate and Legal Services Group of Globe. “So as to give ample time for Globe to adjust its tariffs and billing system, Globe requests the NTC to implement these new charges by January 2012.”

To date, Globe is the only mobile operator that has submitted a proposal to show cooperation to the NTC. Last April, Globe completed full interconnection with Bayan Telecommunications (BayanTel) and Digitel Telecommunications Philippines (Digitel) in all areas of common presence and operations nationwide, benefitting subscribers who need not pay long distance rates to call another subscriber from a different network.

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Posted by on July 13, 2011 in Globe Telecom, Technology


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