TNVS over-regulated; Cheaper telecom rates

posted August 22, 2018 at 08:05 pm
by  Ray S. Eñano
The transport network vehicle service is no longer a luxury—it has become a necessity amid the Metro Manila traffic congestion

A commuter, instead of bringing his vehicle to ply the busy and tumultuous streets of Metro Manila to get to his destination, can take public transportation with several choices. He can either take a bus, a jeepney, the train, or even a taxi. But not one of these choices seems to be appealing. Except for a taxi, the other modes will not bring you direct to your destination. But many taxi drivers can give you nightmares—they are reckless and discourteous, their air-con doesn’t work, and worse they ask for amounts on top of what their meter reads.

The TNVS providers offer a different choice. By simply downloading apps on your mobile phone, you can book a ride and the rate is there for you to see. The app tells you where your hailed ride is exactly and you are informed real time when it has arrived. It also provides you a photo of the driver, his mobile number and the plate number of the vehicle that will be fetching you. These are information that you can share to someone for protection.

Demand for TNVS, thus, has skyrocketed in recent years because of convenience. Around 600,000 bookings are being made daily, but news reports indicate only 20,000 TNVS vehicles were registered with the Land Transport Franchising and Regulatory Board, a fraction of the 100,000 TNVS vehicles in the country.

What accounts for the difference? The government is making it difficult for TNVS vehicles to operate. They have to secure provisional authorities and certificates of public convenience to avoid being tagged as colorum or illegal. 

Why do TNVS drivers, especially private owners of vehicles, have to go through such a rigorous process and treat them like public transport vehicles like jeepneys, buses, and taxis? 

In the United States, rules subject TNVS app providers such as Uber to a rigid screening process to protect the public without applying the rules on ordinary taxis.

Making things worse for the TNVS system is the cap that LTRFB has placed on the allowable common supply base for TNVS cars, which as of February is at 65,000. In its official masterlist, LTRFB has 55,000 vehicles for purposes of processing the certificates of public convenience  and provisional authorities but only 35,000 are active daily.

LTRFB’s suspension of the P2 per minute travel time charge last April also has greatly affected driver income, resulting in the number of online drivers dropping by 6 percent from April to July.

Grab and the other TNCs have been asking LTFRB to open the remaining 10,000 slots to increase the supply of cars but LTFRB declined to take immediate action.

The limited TNVS supply is making it difficult for the new local TNC players to get drivers and start operations. Newcomer Hype had to move its launch date multiple times because they don’t have enough drivers for a proper launch.

Regulation is good but overregulation is bad for business.

Boon to phone users 

For Filipinos feeling the squeeze because of surging prices, the cost of voice calls and text messages should be the least of their worries.

The National Telecommunications Commission recently ordered the reduction of interconnection rates among network operators to “make voice and SMS more affordable to the general public.” The lower rates comes as a relief to a nation known as the “texting capital” of the world as it tries to come to grips with the surging prices of consumer goods.

Memorandum Circular No. 05-07-2018, signed by NTC Commissioner Gamaliel Cordoba on July 19, 2018, slashed the interconnection rate for voice calls by 80 percent, bringing it to P0.50 from P2.50. The directive also reduced the interconnection rate for SMS by 66 percent to P0.05 from P0.15.

Lower interconnection charges mean consumers will not shell out more for their communication needs. The current rates should be reduced once the new charges take effect in the middle of August.

The measure essentially benefits every mobile phone user across the socio-economic spectrum with phone calls and text messages anticipated to be cheaper, unlike other commodities which have become more expensive due to lack of supply.

The country’s telecom companies may have misgivings due to lower return on investment and revenues, but the new rates should encourage consumers to use their services more. Simply put, more calls and SMS should translate into better earnings.

The NTC last adjusted the interconnection rate for voice calls in 2016 when it cut the charge by half from P5 to P2.50. Interconnection rate for SMS dropped in 2011 to P0.15 from P0.35.

The NTC earlier joined forces with the Department of Trade and Industry and Department of Information and Communications Technology in late 2017 to mandate telcos to extend the validity of prepaid load to one year.

Both Globe Telecom Inc. and Smart Communications in July reported their compliance to MC No. 05-12-2017, which extended the prepaid load validity to one year. Only prepaid load amounting to P300 and above had a one-year validity prior to the directive.

Weary consumers can at least appreciate the fact that some agencies in the government are protecting their interest amid the high inflation rate.

Topics: Land Transport Franchising and Regulatory Board , transport network vehicle service , Land Transport Franchising and Regulatory Board , Metro Manila , Globe Telecom Inc , Smart Communications , Department of Information and Communications Technology , Departmen
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