MANILA, Philippines - The House oversight committee decided yesterday to cut the cost of text messaging by half, from P1 to 50 centavos per text.
House committee chairman Quezon Rep. Danilo Suarez said the panel made the decision in a meeting with representatives of telecommunications companies (telcos) together with officials of the National Telecommunications Commission (NTC) and the Bureau of Internal Revenue (BIR).
Representatives of the country’s leading mobile service providers, however, refused to comment on the congressional plan.
Smart Communications and Globe Telecoms have both opposed previous proposals from lawmakers to reduce text messaging costs and impose additional taxes on texting.
Suarez said the decision would be formalized in a resolution that he would file when Congress resumes session on April 13.
“The resolution will be binding on NTC, which will fix the maximum cost of text messaging at 50 centavos per message based on our agreement. The current average cost is about P1,” he said.
He said the 50 centavos includes a five-centavo computer education tax.
Since the tax is part of the maximum cost, it is in effect a pass-on levy, meaning it would be borne by subscribers, though Suarez claimed it is not.
He said as agreed with telco and NTC representatives, the 50-percent reduction in the cost of text messaging would take effect on May 1, Labor Day.
Suarez pointed out 50 centavos would be the maximum cost.
“Our estimate of the telcos’ text messaging cost is 18-19 centavos. If you include the five-centavo tax, the net cost should be about 25 centavos. So if they offer text messaging at 30 centavos per tax, they have a profit of five centavos,” he said.
“Since Filipinos send two billion text messages per day, making us the texting capital of the world, a five-centavo profit translates to P100 million a day, P3 billion a month and P36 billion a year,” he stressed.
He said if telcos offer text messaging at 35 centavos, their net profit would soar to P72 billion a year on this service alone.
Suarez revealed that President Arroyo, Speaker Prospero Nograles and Senate President Juan Ponce Enrile are supporting his text cost proposals.
He suggested that collections from the five-centavo text tax be spent exclusively for free information technology (IT) and computer science education.
“I will make sure that collections go to a trust fund for IT and computer science education. We will build computer laboratories and offer IT and computer science education for free,” he said.
He estimated that the five-centavo tax from text messages and voice calls would amount to at least P50 billion a year.
Responding to questions, Suarez said the money would be beyond the reach of congressmen and other politicians.
A board composed of educators would administer the trust fund, he said.
He said his committee and NTC and BIR officials also agreed that NTC would install a “metering system” that would enable the two agencies to monitor gross revenues of telcos.
“This will be like your Meralco meter. It will measure your consumption – how many voice calls and text messages are made. Telcos won’t be able to cheat on their gross revenues with the metering system,” he said.
He expressed doubt on the P150 billion in combined gross earnings telcos reported for 2007.
“At that time, there were already one billion text messages a day. At P1 per text, telcos raked in at least P365 billion in 2007 on text messaging alone. It’s obvious that they are cheating the government,” Suarez said.
Smart and Globe officials have claimed the proposals are unconstitutional, discriminatory and anti-consumer.
They said the proposals would discourage investors and are a violation of the equal protection clause, singling them out for the questioned financial imposition.
They have also branded the proposals as anti-consumer since it intends to bring back the price of P1 on all SMS transactions from the current price of as low as 10 centavos per text message.
At present, the price of a text message sent within the same telco network ranges from 10 to 30 centavos.
For SMS sent inter-network, the price has been brought town to 50 centavos per text.
50% off on TEXTING
Originally Posted by progmetal
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