Lower interconnection fees to have minimal impact on telco revenues

The decision of the government to lower the interconnection fees among telcos would have minimal impact on revenue this year, telco giant PLDT Inc. said.

“It will have a minimal impact on our revenues, probably (just to give you an idea) around P200 million. In relation to our billion revenues, this is minimal,” PLDT chairman and chief executive officer Manuel V. Pangilinan told reporters.

PLDT expects to see a return to revenue growth and profitability this year. In particular, it expects service revenues to grow four percent this year from P143.5 billion last year.

The guidance for recurring core income, meanwhile, was set at P24 billion this year, eight percent higher than the P22.3 billion last year.

Pangilinan said the reduction of the interconnection fees would also have no impact on the price of service to consumers.

“I don’t want to give the impression that it will translate into lower prices. That is not the case,” he said.

Pangilinan said the lowering of interconnection fees is more relevant to telcos than consumers.

“It might be an attraction to the third telco player because the interconnection fees are low,” he said.

Late last month, the Department of Information and Communications Technology (DICT) asked the National Telecommunications Commission (NTC) to come up with a memorandum circular (MC) to lower the interconnection rates among telcos.

Under the NTC’s proposed MC, interconnection rates for mobile voice calls would be reduced to P0.50 from P2.50, and lowered to P0.05 from P0.15 for short messaging services.

DICT acting secretary Eliseo Rio Jr. said earlier the move is being undertaken as the country has the the highest call and text rates in the region.

The government also sees the initiative as beneficial to consumers and the incoming third telco.