Regulator orders Philippine telcos to cut SMS rates, refund customers

MANILA Wed May 7, 2014 6:04am EDT

MANILA May 7 (Reuters) - The Philippine telecommunications regulator ordered mobile phone firms to cut mobile text messaging rates by 20 percent and reimburse their subscribers for excess charges from December 2011 onwards, In a decision likely to be challenged by the companies in court.

In three separate orders, the National Telecommunications Commission (NTC) told Globe Telecom Inc, Smart Communications Inc, and Digitel Mobile Philippines Inc to bring down text messaging rates to 0.80 pesos ($0.02) from the current 1 peso.

Smart and Digitel are units of Philippine Long Distance Telephone Co (PLDT), the country's most valuable listed company. Globe Telecom is a unit of the Philippines' oldest conglomerate, Ayala Corp.

The NTC order could cost both PLDT and Globe "billions of pesos" in refunds, NTC Director Edgardo Cabarios said. Mobile phone operations remain the key source of revenue for Philippine telcom firms.

PLDT and Globe Telecom would study the NTC order before making further comments and announcing their next moves, their respective spokespersons said.

In December 2011, the NTC instructed telcos to cut their text interconnection fees by 0.20 pesos, but the mobile phone companies disputed the order, saying this does not mean text messaging fees should also decline.

Operators are entitled to challenge the regulator's latest directive in local courts.

The Philippines is home to some of the world's most prolific mobile text messaging customers, with nearly two billion messages sent via SMS everyday.

($1 = 44.32 Philippine Pesos) (Reporting by Siegfrid Alegado and Erik dela Cruz; Editing by Miral Fahmy)

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