Rivalry among telcos takes centerstage
Dec 30, 2012 (The Manila Times - McClatchy-Tribune Information Services via COMTEX) --
The year 2012 was highlighted by the neck-to-neck battle for supremacy between Globe Telecom and Smart Communications, the two of largest telecommunications companies in the Philippines.
Globe and Smart have been trying to outdo each other in modernizing and transforming their networks, and offering the best deals to the public.
The National Telecommunications Commission (NTC) said that the competition between Globe and Smart is good for consumers, because the telco giants will try to give their best to consumers in terms of service and rates.
The past year also saw a marked increase in the complaints of consumers against Globe and Smart for dropped calls and unsent text messages.
For its part, the NTC directed all telcos to reduce their interconnection charges from 35 to 15 centavos for short messaging services. The telcos, however, contested this order in court.
Globe is expanding and upgrading its network at an estimated total cost of $700 million. Once completed, the new network will have an all-Internet Protocol architecture as well as 12,000 additional kilometers of fiber optic cable capacity to handle the expected increase in voice and data traffic, and the capability to upgrade to more advanced technologies.
"This [modernization program] is the answer on the quality of services that the subscribers is asking from us," said Yoly Crisanto, Globe head of corporate communications.
Meanwhile, Smart said that tests by the NTC had validated the superiority of their network. It added that despite this, Smart continues to work hard in order to provide our customers superior service."
"By completing our network transformation in mid-2012, we are now moving on to deliver to our subscribers next generation of services such as the Long Term Evolution, or LTE," it added.
While the NTC is monitoring these developments that it hoped would be beneficial for consumers, it is not closing its eyes to complaints against telcos.
NTC Commissioner Gamaliel Cordoba had called the attention of both Globe and Smart to the increasing complaints from customers about dropped calls and undelivered text messages.
Cordoba asked both companies to explain the causes for the disruptions and to give a timetable for completion for their network modernization programs.
Last quarter battle: Telcos vs. NTC
In the last quarter of the year, NTC directed Globe,Smart, and Digitel Mobile Philippines Inc. (Sun Cellular, now a sister company of Smart), to immediately comply with its circular reducing the short messaging service (SMS) interconnection charge from 35 centavos to 15 centavos.
The commission had issued three separate decisions filed against the firms over their non-compliance with NTC Memorandum Circular No. 02-10-11, which became effective in December 2011.
In three separate decisions, NTC directed Globe, Sun and Smart to immediately reduce off-net SMS rates from P1 to not more than 80 centavos; refund or reimburse their subscribers the excess charge of 20 centavos per off-net SMS; pay a fine of P200 a day from December 1, 2011 until the date of compliance; and submit documents and report pertaining to off-net SMS of all its subscribers who were charged at the regular rate of P1 per off-net SMS.
According to the NTC, "unli" (unlimited) promos and such other services are not permanent remedies because the telecommunication companies can pull them out anytime and could only last for a specific period of time.
The telecommunication giants said they would contest the NTC decision.
"We will avail of all legal remedies to preserve our right to determine pricing," said lawyer Froilan Castelo, head of the corporate and legal affairs group of Globe Telecom.
In a statement, Smart said that it would seek a reconsideration of the NTC decision.
Dennis Babaran, NTC legal director, admitted to The Manila Times that while it has the power to regulate telcos, it is powerless in forcing them to lower their text messaging rates because it does not have the power to cite them in contempt.
In December, the country's biggest mobile phone companies filed a motion for reconsideration with the NTC. Smart argued that the assailed decision was vague and thus, creates confusion and ambiguity, where there should be none if the plain letter of the circular were simply implemented.
According to Smart, the NTC did not specify to which particular off-net SMS service among Smart's various SMS service offering the refund should apply.
On the other hand Globe asked the NTC to reconsider, reverse and set it aside.
While the NTC looks "toothless" in enforcing its order to reduce SMS rates, the improvement of the services of the two telco giants along with the growing popularity of smartphones are proving beneficial to the public.
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