Telcos: No such thing as free SMS, not even in the US

While willing to discuss text rates, telecommunications companies are balking at a recent announcement that government wants to make text messaging free, saying this implies that telcos were unduly pricing the service when they were not.

"Reports have cited Verizon, a major US mobile carrier, as offering 'free' text messaging. A check with the Verizon website shows that the service being offered is not 'free' text messaging but unlimited text messaging. The unlimited SMS offer is part of their monthly service plans, the lowest priced of which costs US$59.99 or roughly P2,400 a month," Smart Communications Inc. spokesman Ramon Isberto said in a recent statement.

Unlimited text messaging is already available in the Philippines, he added.

"SMS rates in the Philippines are already among the lowest in the world. While the standard rate remains P1 per message, Philippine operators, including Smart, now offer many different text and call packages that have drastically reduced the effective price of SMS from 10 to 20 centavos per message or even lower in the case of unlimited text packages," he said.

Globe Telecom Inc. SVP Atty. Rodolfo Salalima agreed in a separate statement.

"While we do not take it from government to feel their concerns for the mass public, we need to sit down together (to discuss rates).... In Australia the cost per text is P2.4, in Malaysia P1.07, in China P1.55, in Taiwan P4.25, in Europe it ranges from P15 to about P25," he said.

As for lowering text rates, Salalima said the price of one text message was now only about 13 centavos because intense competition has driven telcos to offer promos.

He added that there was a public service aspect to the service, and if telcos were forced to make it free despite the heavy investment required to cope with data traffic and to improve quality of service, then text messaging may not be sustainable.

Digital Telecommunications Phils. Inc., operator of the Sun Cellular mobile brand, likewise said that text messaging was already very cheap in the Philippines.

"The fact that it is being contemplated to make it free or lower prices implies there is an impression that it is expensive. But in fact we are among the lowest especially when we count the promos. Of course, we can discuss this better if we get a formal policy or statement from government," Digitel SVP William Pamintuan told reporters recently.

But the NTC said it has already come up with twin circulars proposing to trim charges not only for text messaging but for voice calls as well. It has also announced that it will hold a public hearing about the proposed rates this week.

NTC wants to slash the access charge (also known as the interconnection charge) for text messaging between different operators (Smart to Globe, Sun to Smart, etc.) to 15 centavos from 35 centavos. This would put the charge at par with the current 15-centavo access charge for two brands using the same network (Smart to Talk n' Text, Globe to TM, Sun to Sun).

NTC believes that cheaper access charges between networks would drive down the price of text messaging from the nominal rate of P1.

As for voice calls, NTC wants access charges for off-network activity (Smart to Globe or Smart to Sun, and vice-versa) to go down to P1.50 from the current P4.

Telcos have declined to comment on the specific rates, saying they have not received a copy of the circulars. By Riza T. Olchondra - Philippine Daily Inquirer