Globe and PLDT agree to cut voice interconnect rates 38%

Philippines telco rivals Globe Telecom and PLDT have signed a memorandum of understanding to reduce the interconnection rate for voice calls between the two operators, which in turn will translate to lower prices for domestic mobile and fixed line calls between Globe and PLDT-Smart.

Under the agreement, the two telcos committed to take steps to lower retail rates for voice, taking into consideration the reduction in interconnection rates. Both parties also committed to maintain GOS (grade of service) in interconnection. This means both operators will ensure that sufficient telecommunications circuits or routes are available for efficient transmission of calls.

The agreement is related to the issuance by the National Telecommunications Commission of a memorandum circular providing for a reduction in the interconnection rate between the two networks. Under the circular, interconnection charge for voice calls shall not be more than P2.50 per minute (compared to old cap of P4.00/minute, representing a 38% reduction). The reduction should take effect not later than January 1, 2017.

Globe said the reduction of interconnection rates doesn’t affect international calls or domestic calls made between Globe customers – the latter is already offered to consumers on an unlimited basis

“For many years now, Globe has been strongly advocating the rationalization of interconnect access charge between the two telcos. We are confident that a reduction in the cost of interconnection for voice calls will eventually redound to a more robust economy, providing our customers with an affordable and easily accessible way of communication,” Globe Chief Technology and Information Officer Gil Genio said.

The NTC said the decision to lower interconnection rates is in line with efforts to reduce communications costs, maintain and foster fair competition in the telecommunications industry as well as to make mobile voice service more affordable to the public.

The MoU will serve as a guide to amend previous interconnection agreements.