Philippine telcos ordered to cut SMS fees, face fines

Philippine telcos have been ordered to cut their SMS rates by 20 percent and could also face a hefty fine for allegedly failing to fully comply with a regulatory directive last year.

The National Telecommunication Commission (NTC) of the Philippines wants the three telcos--Globe Telecom, Sun Cellular and Smart Communications--to "immediately" reduce interconnection charges for SMS from 1 peso (US$0.024) to 0.8 peso (US$0.019), according to an article Tuesday by The Philippine Star.

The decision was based on the telcos’ non-compliance with a memorandum circular last October for interconnection charges for SMS, which became effective last December.

The NTC had reduced the SMS interconnection charges from 0.35 pesos (US$0.008) to 0.15 pesos (US$0.0036) to make texting more affordable to the public, noted the report.

The regulator also directed the telcos to refund their subscribers the excess charge of 0.20 pesos (US$0.0048) per off-net SMS from December 2011. Off-net refers to messages which terminate on a different operator.

The operators are expected to challenge the regulator's latest directive in court and seek an injunction.

The Philippines has over 100 million mobile subscribers with sister companies Smart and Sun accounting for combined almost 70 million subscribers and Globe with over 32 million users, according to the news site.

The NTC's move follows suggestions last week from International Monetary Fund chief Christine Lagarde for the Philippines to tax text messages to shore up state coffers in its bid to balance the national budget.

In September, the regulator revealed it was mulling over imposing sanctions on telcos providing lousy service, by banning them from taking on new subscribers. This was over the worsening quality of service standards stemming from unlimited plans straining the networks.