The Philippines’ two major telecom operators – PLDT and Globe Telecom - have agreed to reduce their voice interconnection rates to bring down the price of domestic mobile and fixed line calls in the country.
Department of Information and Communications Technology (DICT) Secretary Rodolfo Salalima and National Telecommunications Commissioner (NTC) Gamaliel Cordoba witnessed the signing of the memorandum of agreement.
The NTC said the decision to lower interconnection rates is in line with efforts to reduce communications costs, maintain and foster fair competition in the telecommunications industry as well as to make mobile voice service more affordable to the public.
Under the agreement, the two companies committed to taking steps to lower retail rates for voice and to maintain a grade of service (GOS) in interconnection. This means ensuring that there is sufficient telecommunications circuits or routes for efficient transmission of calls.
“We are confident that a reduction in the cost of interconnection for voice calls will eventually redound to a more robust economy, providing our customers with an affordable and easily accessible way of communication,” Globe chief technology and information officer Gil Genio said.
The reduction of interconnection rates, however, will not affect international calls.
The NTC has earlier issued a memorandum circular mandating a 38% reduction in the interconnection rate between the two networks, which should take effect not later than January 1.
“We are supporting government’s efforts to bring down the cost of telecom services in the country. This agreement will translate in different ways to more affordable voice call rates for our subscribers,” PLDT director and head of regulatory affairs and policy office Ray C. Espinosa said.
The interconnection rate for voice calls between the telco firms will be reduced to 2.5 pesos ($0.12) per minute across-the-board starting January 1, 2017. At present, mobile to mobile and landline to mobile voice calls cost 4 pesos per minute while mobile to landline voice calls cost 3 pesos per minute.
PLDT Chief Revenue Officer Eric Alberto added that improving voice services will provide customers more options to connect with their family and friends, at home or on the go.
The memorandum of understanding will serve as a guide to amending previous interconnection agreements.
Earlier, the two telecommunication companies called on the government to streamline government policies and regulations to speed up the deployment of broadband infrastructure in the country.
“We are calling for a national consensus to harmonize policies and regulations in support of building digital data infrastructure. We also hope to deepen understanding of our people, at the community level, how vital telecoms infrastructure are to our lives. When these facilities are damaged or stolen, this harms our welfare as surely as when roads and bridges are washed away,” said PLDT and Smart Communications Senior Vice President for Network Services Mario G. Tamayo in a speech at a summit hosted by the DICT.
In anticipation of the continued growth of data traffic and digital services in the country, PLDT said it plans to increase the capacity of its data infrastructure by ten times come 2020.
For 2016 alone, PLDT has allocated 48 billion pesos ($963.5 million) capital expenditure to fortify and expand its fixed and wireless networks, including the utilization of its recently acquired 700-MHz spectrum.
Meanwhile, Globe Telecom emphasized the need for more cell sites in the country taking into account dramatic rise in mobile data demand. Genio pointed out the company’s quarterly data traffic increased exponentially to 98 petabytes in the third quarter of the year from only 9 petabytes in the first quarter of 2013 amid growing customer propensity for multi-media content.