Overcharging telcos being penalized a measly P200 a day

In the realm of punishment, it is almost like a caress. Overcharging telecommunications companies are being fined a measly P200 a day, starting Dec. 1, 2011 when the industry regulator, the National Telecommunications Commission (NTC), sent out a circular order to lower SMS rates by P0.20.

Not surprisingly, the telcos are choosing to pay the fine rather than comply with the order, continuing business as usual that rakes in billions a year from text-happy Filipinos.

 

The penalty – amounting to P72,800 a year – is based on a 76-year-old law, known as the Public Service Act of 1936, NTC director Edgardo Cabarios told GMA News Online in a phone interview on Wednesday.

The telcos have chosen to pay the negligible penalty rather than reimburse mobile users to the tune of P4 million a day since last December for overcharged text messages. The NTC ordered the reimbursement by the telcos on Tuesday.

 

That is why the NTC is now considering proposals to increase the fines to P5 million a day and another up to a maximum of P50 million, Cabarios said.

 

NTC legal director Dennis Babaran told reporters on Tuesday the savings of P0.20 per off-net SMS – as a result of lower interconnection charges between the telcos – was formulated by the commission not to benefit the telcos but for the companies to pass on the savings to their subscribers.

"Off-net SMS" are messages sent between different networks. The industry, with government approval, lowered the charges for such messages from P0.35 to P0.15, hence the P0.20 savings.

 

On Tuesday, the commission said it ordered Globe Telecom and rival Smart Communications and its affiliate Digitel Mobile Philippines to reimburse their subscribers P0.20 for each off-net SMS.

 

Cabarios said the commission was reinforcing its 2011 circular order, the “Interconnection Charge for Short Messaging Service,” which the telcos simply ignored. 

 

NTC also renewed its order to Globe, Smart, and Digitel Mobile Philippines – operator of Sun Cellular – to reduce the rate for off-net messages by P0.20 to P0.80 from P1.

NTC’s weakness

 

Industry's non-compliance highlights NTC’s weakness as a regulator, which the commission is now trying to remedy by calling for an amendment of the 1936 Public Service Act and bringing the level of fines on par with the age of mobile connectivity.

 

Compared with the revenues of telco giants Globe and Smart parent PLDT, P200 a day or P72,800 a year is loose change.

 

Globe posted consolidated service revenues of P61.3 billion in the first nine months of the year, up 6 percent from P57.7 billion a year earlier.

 

“Sustained topline growth was underpinned by strong performances of the mobile, broadband, and fixed line data businesses which grew 6 percent, 14 percent, and 9 percent over last year’s results, respectively,” Globe said in a disclosure to the Philippine Stock Exchange.

 

“Despite the very challenging competitive environment, our business remains fundamentally strong. We were able to build on our earlier triumphs, with customer focus being our key differentiator,” noted Ernest L. Cu, Globe president and CEO.

 

“Going against a traditionally lean season, we sustained our growth momentum once again in the third quarter,” Cu added.

As of end-September 2012, PLDT's consolidated core net income reached P28 billion, down 8 percent from P30.6 billion a year earlier on higher operating expenses.

 

“We continue our steady financial performance as we wait for the industry situation to stabilize,” said PLDT chairman Manuel V. Pangilinan.

 

“We hope to provide a better indication of when we can expect to return to the profit growth track when we announce our yearend results next March. In the meantime, we are maintaining our core profit guidance for 2012 at P37.0 billion,” Pangilinan added.

 

What could put a bite into NTC’s bark against the rich telcos remains pending in Congress – since 2001 at the House of Representatives and since 2009 at the Senate.

 

"Kasalukuyang nasa Congress – Senate and House – ang NTC Reorganization Bill na may pagkakaroon ng substantial increase sa fine,' Cabarios told GMA News Online.

 

The NTC Reorganization Act of 2001 proposes "to make it more responsive to the needs of the fast evolving Telecommunication Industry in the new millennium," said Rep. Simeon Kintanar in his explanatory note to House Bill 131.

 

Kintanar, a former NTC commissioner, is now the representative of Cebu's second district.

 

In 2009, Senate President Juan Ponce Enrile filed Senate Bill 3465 – also calling for a reorganization of NTC.

 

"The birth of new industry players has made it imperative for the government to provide a regulatory environment, to allow all sectors to develop the best available technology, on a leveled playing field," Enrile said in his explanatory note.

 

"There is a need now to reorganize the NTC to define and strengthen its power and functions as proposed in Senate Bill No. 3465," he added.

On Tuesday, Globe issued a statement saying it intends to exhaust all possible legal remedies against NTC. 

 

Smart, however, said it is still in the process of reviewing the NTC order. 

 

"Medyo malaki ang ire-refund nila,” Cabarios said in an interview with Kara David on GMA News TV’s “News To Go” on Wednesday.

 

“Base sa 2010, ang mga text na tumatawid between networks ay nasa 20 to 30 million sa isang araw," the NTC official noted.

 

"Halimbawa, 20 million [text messages] nalang, at 20 centavos ang ire-refund nila, P4 million po iyon per day sa isang telco," he added.

 

Lowering the cost of communication as a service to the public is in line with the directive of President Benigno Aquino III, said Babaran, adding that SMS is a value added service and should not be expensive. — VS/HS, GMA News

Source: http://www.gmanetwork.com/news/story/283197/economy/companies/overcharging-telcos-being-penalized-a-measly-p200-a-day

Smart expands LTE service across Metro Manila

Smart Communications’ Long Term Evolution (LTE) mobile broadband service is now available in more cities across Metro Manila, further extending the network’s lead over rivals in the rollout of “ultrafast” Internet connectivity.

In a statement, Smart said its LTE service is now accessible in more areas in the northern, central and southern areas of Metro Manila. These areas include SM Southmall in Las Piñas, Greenhills Shopping Center in San Juan, UP Diliman, Ateneo De Manila, Miriam College, Sikatuna Village and the Eastwood Mall in Quezon City.

“Smart LTE lets you enjoy the fastest 4G connection all over the Metro Manila area,” Smart broadband Internet and data services head Lloyd Manaloto said.

“With 10 cities now powered by our super-charged broadband service, we have more than doubled our coverage since the commercial launch less than two months ago,” he said.

Other cities with LTE connectivity are Makati, Taguig, Mandaluyong, Pasig, Pasay, Muntinlupa and Manila.

In line with the improved coverage, Smart has continued to distribute even more LTE “sticker pins” in various establishments around Metro Manila to serve as a visible guide to subscribers using LTE.

'Super Wi-Fi' poised for growth in US, elsewhere

Move over Wi-Fi, there's a new wireless technology coming.

So-called "Super Wi-Fi," which offers a bigger range than existing hotspots, is being deployed in the United States and generating interest in a number of countries, including Britain and Brazil.

Super Wi-Fi is not really Wi-Fi because it uses a different frequency and requires specially designed equipment, but it offers some of Wi-Fi's advantages, and more.

The name was coined by the US Federal Communications Commission in 2010, when it approved the deployment of unused broadcast television spectrum, or so-called "white spaces," for wireless broadband.

The long range and use of the broadcast spectrum could allow wireless signals to travel farther than Wi-Fi -- in theory as far as 100 miles (160 kilometers) -- although for practical reasons the range will probably be only a few miles.

Michael Calabrese, director of the Wireless Future Project at the New America Foundation, said that is an advantage of using the broadcast spectrum.

"Wi-Fi has been booming, but it has been limited by the frequencies it operates on, which go only a few hundred meters," said Calabrese, who has been pressing for the use of "white spaces" since 2002.

In contrast, "television frequencies travel long distances at low power and penetrate through buildings, trees and bad weather," Calabrese said.

This could provide high-speed Internet to sparsely populated rural areas which lack broadband. It could also allow consumers to create their own hotspots, which could be used on devices while away from their homes.

The first deployment of Super Wi-Fi came last year by Rice University in Houston, Texas, followed by another earlier this year in Wilmington, North Carolina.

A coalition of organizations has announced plans to deploy Super Wi-Fi to college campuses in rural areas starting early next year in a project called AIR.U, backed by Google and Microsoft.

Super Wi-Fi would be on "unlicensed" spectrum, like Wi-Fi, so companies would not bid on exclusive spectrum rights. This can lower costs. And there is often excess capacity, especially in rural areas, where fewer TV stations operate.

Mobile phone companies could use Super Wi-Fi, as they do now with Wi-Fi, to relieve some of the "spectrum crunch" from the explosion of mobile devices like smartphones and tablets.

But in order for Super Wi-Fi to gain traction, manufacturers of PCs and other devices would have to make chipsets that could operate on both systems.

Dan Lubar of the WhiteSpace Alliance, an association dedicated to new wireless technology, said he sees Super Wi-Fi gaining momentum in the US and other countries with unused broadcast spectrum.

"Everybody understands the value of this spectrum," he said. "It is the biggest swath of spectrum and has the most favorable characteristics."

Chipmaker Texas Instruments recently joined the alliance, suggesting that equipment makers are ready to start making Super Wi-Fi equipment.

"It's definitely going to be here in visible ways by the middle of next year," Lubar said.

Calabrese said that because of a lack of compatible equipment, most of the early Super Wi-Fi deployments are being back converted to regular Wi-Fi signals. At some point soon, he said, people may start using air cards or dongles to capture Super Wi-Fi.

Gerry Purdy, an analyst and consultant with MobileTrax LLC, was more cautious about prospects for Super Wi-Fi, saying it may take several years to gain traction.

"It's a good utilization of spectrum, but I'm more conservative than some people," he said.

"Building chipsets takes times, software standards take time; I don't think people should have false expectations."

The most vocal criticism comes from the Wi-Fi Alliance, which has a trademark on the name Wi-Fi and fears consumers will be confused by incompatible technical norms.

The group said it supports the use of unlicensed spectrum for broadband but that Super Wi-Fi "does not inter-operate with the billions of Wi-Fi devices in use today" and does not "deliver the same user experience as is available in Wi-Fi hotspots and home networks."

Although the name is the most controversial part of Super Wi-Fi, that did not come from the backers of the technology, but from the FCC and chairman Julius Genachowski.

"I wish we had thought of that. We had been calling it Wi-Fi on steroids," said Calabrese.