The Duterte administration wants to deliver on its promise to provide reliable and affordable telecommunication services to Filipinos, as it pushes for the entry of a new major player to complete with the duopoly.
President Rodrigo Duterte, in his 3rd State of the Nation Address, pledged to bring in a new telco player to ensure that the country’s telecommunications services are reliable, inexpensive and secure.
“A draft terms of reference for the entry of a new, major industry player is at hand. The terms will be fair, reasonable and comprehensive. It will be inclusive so it will be open to all interested private parties, both foreign and local,” Duterte said.
“The only condition is that the chosen entity must provide the best possible services at reasonably accessible prices,” he said.
The Department of Information Communications and Technology is in the process of finalizing the terms of reference for the selection of the third telco player.
DICT acting Secretary Eliseo Rio said the entry of new major player in the Philippine market was a mandate given by the president to the agency to address the paramount national interest on the quality of internet connection in the country.
He said the major player was expected to stir up genuine competition in the telco market and consequently lower the prices and improve the quality of the services.
Rio said the new player was expected to make a commitment that was never done by the existing telco players. “Filipinos can now expect a faster internet speed at a lower cost,” he said.
The DICT adopted the highest committed level of service or HCLoS as the mode of selection for the major player. Through the HCLoS terms of reference, the participant with the highest points gained on the basis of coverage (40 percent), speed (20 percent) and financial capability (40 percent) in the next five years would be named as the new telco player.
Existing telco players PLDT Inc. and Globe Telecom Inc. expressed no objection to the entry of new players in the telecommunications industry.
“Globe is not opposed to the entry of a third player, or for that matter, as many players that the market can accommodate. Globe has always geared itself for growth and competition,” Globe senior vice president and general counsel Froilan Castelo said.
“Competition has the potential of opening up new sources of revenue streams for telecommunications players while benefiting consumers with more innovative products and services at competitive rates,” he said.
The government through the National Telecommunications Commission also moved to reduce interconnection charges among telcos to make text and voice calls more affordable to Filipinos.
The NTC reduced the interconnection rates for mobile voice calls from P2.50 to P0.50 per minute, while the interconnection charges for short messaging services was slashed from P0.15 to P0.05 per text.
The annual reports submitted by telcos to the NTC showed that the costs of interconnection in the last three years averaged only P0.486 per minute for mobile calls and P0.44 per SMS.
These rates were much higher than in India and Australia, but lower than in other Southeast Asian countries.
The NTC said that in India, the interconnection rate was P0.0154 for text and P0.067 per minute for voice services. In Australia, the interconnection rate was P0.012 for SMS and P0.067 per minute for voice services.
Interconnection charges for voice services in Thailand stood at P0.56 per minute; Malaysia, P0.48; Indonesia, P0.93; Cambodia, P2.42; and Vietnam, P1.26.
PLDT and Globe cut the interconnection charges for voice calls by 40 percent, or from P4 per minute to P2.50 per minute for mobile to mobile and landline to mobile voice calls in January 2017.
Access charges for mobile to landline voice calls cost P3 per minute.
The country’s mobile market has a total industry subscriber identification module base of more than 118 million, with an industry penetration rate of 112 percent in 2017.
Globe had a SIM base of 60.7 million or about 51 percent of the market, while PLDT had 58.29 million.