Cut in interconnection charges to have ‘minimal’ impact on PLDT revenues

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PLDT, Inc. said the reduction of interconnection charges will have no significant effect on the company’s revenues, or result in lower rates for consumers.

“It will have a minimal impact on our revenues. Probably [just give you an idea] around P200 million. In a relation to our billion revenues, this is minimal. So we are a net receiver on the voice side, and net payer on the SMS side. So on the whole if you net the two, probably revenues will drop by about P200 million, “ PLDT President, Chairman, and CEO Manuel V. Pangilinan told reporters on June 13.

The Department of Information and Communications Technology (DICT) has directed the National Telecommunications Commission (NTC) to cut interconnection charges between telecommunications companies, as a way to reduce consumer costs and encourage the entry of a “third” telecommunications player. DICT has said that the NTC plans to lower rates to from P.250 to P0.50 for voice calls and from P0.15 to P0.05 for short messaging service (SMS).

However, Mr. Pangilinan said the reduction in interconnection charges will not mean lower rates.

“What I only want to clarify is most likely there will be no impact on the price of the service to consumers, because I don’t want to give the impression that it will translate into lower prices, and that’s not the case. Interconnection is relevant to the telcos. It might be an attraction the third telco player because the interconnect fees are low,” he said.

Meanwhile, PLDT said it is preparing for fifth generation (5G) network by 2020, saying that this is the schedule based on an “informed decision,” while Globe said it is sticking to its schedule of rollout of a home broadband 5G service by the second quarter of 2019.

“I think we’d be asleep at our job if somebody else gets ahead of us in launching the 5G service in whatever way or form,” Mr. Pangilinan said.

In response, Globe said it will stick to its commitment to connect homes by 5G technology.

“Globe has been 5G ready since 2016… The technology is one step closer to deployment in the Philippines after its successful demonstration of 5G capabilities in a real-world outdoor environment over a live network,” Globe said in a statement.

Both telcos partnered with Huawei Technologies Ltd. for the development of their 5G networks.

Telcos around the world have been announcing their 5G rollout schedules. The international telecommunications industry has yet to set final standards for 5G.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Patrizia Paola C. Marcelo