NTC cracks down on telcos; slaps fine and orders SMS fee refund

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The quasi-judicial body also ordered the mobile phone operators to refund their subscribers and to lower the rate of SMS from P1.00 to P0.80. The decisions stemmed from the Administrative Case Nos. 2011-098, 2011-099, and 2011-100 filed against Globe Telecom, Digitel Mobile Philippines, and Smart Communications, respectively. The decisions tackled the telcos? non-compliance with NTC Memorandum Circular (MC) No. 02-10-2011 re: ?Interconnection Charge for Short Messaging Service (SMS)? which became effective on December 01, 2011. The MC reduced the SMS interconnection charge from P0.35 to P0.15 for the purpose of making SMS more affordable to the public pursuant to the directive of the Office of the President. The NTC also computed that the retail price of off-net SMS consists of the cost of the network sending the short message or text plus the cost of the network receiving the text plus the cost of the interconnection facilities as clearly emphasized in the MC. The NTC pointed out that the savings realized from the reduced interconnection charge on SMS sent to other networks (off-net SMS) was formulated not to simply benefit the telcos but was intended for them to pass on the savings to their subscribers. It added that, while SMS is in the nature of Value Added Service (VAS), the NTC is not prevented from lowering the cost of communication to better serve the interest of the public. NTC also pointed out that the issuance of the MC was a valid exercise by the State of its police power for the benefit of the consuming public. With the decision, the NTC directed Globe, Sun, and Smart to immediately:

1. Reduce off-net SMS rates from P1.00 to not more than P0.80;

2. Refund or reimburse their subscribers the excess charge of P0.20 per off-net SMS from the effectivity of the MC until fully settled, by crediting the prepaid load of prepaid subscribers and/or effecting the refund through the respective subscriber billing for postpaid subscribers;

3. Pay a fine at the rate of P200.00 day from December 01, 2011, until the date of compliance; and

4. Submit, within 15 days from receipt of the decision, the documents, records and reports pertaining to off-net SMS of all its subscribers who were charged the regular rate P1.00 per off-net SMS from 01 December 2011 containing details as required in the NTC?s order dated December 12, 2011 along with the mode of effecting the refund or reimbursement as provided in the decision.

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