Globe Telecom CEO says no increase in SMS, call costs

By Erwin Lemuel Oliva, INQ7.net

GERARDO Ablaza, Jr., Globe Telecom Inc. president and chief executive officer assured subscribers on Wednesday that the company will not increase the cost of making calls or sending text messages with the implementation of the reformed value-added tax (RVAT) this month.

"Competition is heading towards making prices lower. So it's counterproductive for Globe to raise its prices due to reformed value-added tax," Ablaza told reporters.

He did not disclose details on how Globe intends to absorb the additional tax on services.

Republic Act 9337 or the Reformed Value Added Tax law has adjusted the current rate from 10 percent to 12 percent for services.

Smart said last week that it would not increase the cost of making calls and sending text messages either. Costs will remain the same for its prepaid subscribers despite the RVAT. Smart’s SMS rate will remain at one peso per message.

Smart added, however, that it would have to reduce discounts to retailers buying wholesale electronic load or airtime packs.
Ramon Isberto, Smart Communications public affairs head, told INQ7.net that this was the best way to keep their subscribers and the retailers of their electronic loading service happy.

"This means that retailers of the electronic loading will have smaller margins. But how do we keep them happy? We will soon come out with new set of products for them. So we're encouraging our retailers not to increase their prices if they sell electronic load (airtime) to subscribers," Isberto added.

Meanwhile Globe will release a more detailed explanation on how it intends to "absorb" the additional 2 percent VAT on services, according to Jones Campos, assistant vice president for Globe Telecom public relations.