Wednesday, Nov 21, 2012
PHILIPPINES - The National Telecommunications Commission (NTC) has ordered the country's top telecommunications firms to refund millions of subscribers after finding that the telcos have been overcharging customers for text messages.
The order, one of the three directives issued by the NTC Tuesday, is effective immediately.
"These orders are immediately executory upon receipt, but the telcos have the right to appeal," Dennis Babaran, NTC legal director, on Tuesday said at a press briefing.
Estimates by the Philippine Daily Inquirer showed that Smart Communications, affiliate Sun Cellular and Globe Telecom may have to return at least P1.42 billion (S$42 million) to their subscribers.
The telcos have been collecting 20 centavos more (P1 instead of 80 centavos) for each off-net text message, or those sent from one network to another, since December last year, the NTC said in a ruling.
Text messages between subscribers of the same network and those under unlimited or "bucket-priced" offers are not covered by the order.
About 20 million off-net messages are sent every day, based on 2010 records, which are the latest the NTC has. This is just 1 per cent of the 2 billion text messages that were sent daily on average that year in the Philippines, for years considered the world's texting capital.
Assuming that daily text message volumes have not changed since 2010, the telcos stand to pay at least P1.42 billion to refund 20 centavos for every regularly-priced off-net text message.
100 million subscriber base
Globe, Smart and Sun Cellular had a combined subscriber base of 100.65 million at the end of September 2012. This translates to about one active SIM for every Filipino, although a growing number of users now carry at least two accounts at the same time.
Smart and Sun refused to comment on the matter, but said the companies would explore possible legal remedies.
End of 'unli' service
Globe said the NTC move could spell the end of unlimited services, which in the company's opinion had made text messages affordable more than any government-mandated reduction in rates could.
"Since the very beginning of the case, we have clearly stated that SMS is a deregulated service and telcos have the right to set the retail price of this service," said Froilan Castelo, head of Globe corporate and legal affairs.
"In fact, this has worked for the benefit of the consumer because the prices have gone down drastically with the advent of customisation, bucket and combo promos, and unlimited services," Castelo said.
