MANILA, Philippines – The National Telecommunication Commission (NTC) on Tuesday ordered Globe Telecom, Sun Cellular and Smart Communications to "immediately" reduce interconnection charge for SMS from P1 to 80 centavos.

”The savings realized from the reduced interconnection charge on SMS sent to other networks (off-net SMS) was formulated not to simply benefit the telcos but was intended for them to pass on the savings to their subscribers,” the NTC said in its order.

The NTC came out with the decision after tackling the telcos’ non-compliance with the NTC memorandum circular in October last year on interconnection charge for SMS, which became effective on Dec. 1, 2011.

The commission reduced the SMS interconnection charge from P0.35 to P0.15 to make SMS more affordable to the public pursuant to the directive of the Office of the President, according to the NTC.

The NTC, in its decision, pointed out that SMS is in the nature of Value Added Service (VAS) and the commission is not prevented from lowering the cost of communication to better serve the interest of the public.

Reimburse subscribers

With the decision to lower interconnection charges cost, the NTC also directed the three telecommunication companies to refund their subscribers the excess charge of P0.20 per off-net SMS from December 2011.

The telcos have also been ordered to pay P200 fine per day for not following the memorandum circular since Dec. 1, 2011.

The NTC also directed the telcos to submit within 15 days from receipt of the decision all the documents, records and reports pertaining to off-net SMS of all its subscribers who were charged the regular rate of P1 per off-net SMS from Dec. 1 last year.

The Philippines has over 100 million mobile subscribers with sister companies Smart and Sun accounting for combined almost 70 million subscribers and Globe with over 32 million users.