"What this Country needs is not a change OF men but a change IN men" March 1980

Sunday, June 08, 2008

Text's 20-centavo-cut is a poor bargain

WHY SETTLE FOR A 20-CENTAVO discount, when you can push for a 50-50 split on telecommunication companies’ text revenues?

This was the question posed by Sen. Richard Gordon upon learning about the bid of the National Telecommunication Commission (NTC) to reduce telco charges.

According to Gordon, the NTC’s circular ordering telcos to reduce their interconnection or access fee from 35 centavos to 15 centavos per call or text message would be hardly felt.

“Considering the leverage the government has, the 20-cent average reduction in the interconnection fee is a poor bargain. Who saves money 20 cents at a time?” Gordon pointed out.

“What we need is a means of pooling together the savings created by reduced charges and using this fund to make gigantic improvements on our peoples’ lives,” he said.

Gordon said eliminating charges on text messaging could either maim or kill the proverbial goose that lays the golden egg. Instead, he proposed that text charges remain at P1 but only 50 centavos should go to the telcos.

The remaining 50 centavos, he said, “will be given to government and pooled in a special fund that will be used in overhauling the public education system, funding public health programs and improving benefits for senior citizens.”

He said telcos would agree to his proposal which will be filed as a bill to create a special education tax fund.

“There is a real justification for them (telcos) not to charge the whole P1, because texting is really just a value added service. What I am proposing is that they keep 50 cents to maintain or expand their systems but give government the remaining 50 cents. We will do away with the promos on texting and keep the charges at P1 per text all the way. In this way, the people will be contributing to their children’s education,” the senator said.

According to Gordon’s computation, 9,958,000 mobile phone subscribers sending 10 text messages a day at 50 centavos for every text message sent could generate as much as P98.4 billion a year or P492.3 billion in five years.

(Actually, the correct computation is P18.17 billion a year or P90.87 billion in five years.)

“There are 400 million text messages sent a day. What we are proposing to collect from telcos is about half of this amount and target it towards programs that will have a long- term impact on our people’s ability to achieve a greater measure of asenso (progress) or meaningful socioeconomic upliftment,” Gordon said.

He added that with just one year’s worth of the special education tax fund amounting to P P98.4 billion, telcos could help the government:

• Wipe out the existing classroom backlog at the cost of P6.95 billion

• Provide desks and textbooks for all students at the cost of P4.17 billion

• Hire 12,733 teachers and pay them an additional P15,000 a month for 7 months plus 13th month pay. The total cost would be P3.81 billion

• Hire 24,709 principals at the cost of P4.43 billion

• Feed 12,202,297 school children in all grades for 120 days at the cost of P58.5 billion.

20¢ cut in text fees poor bargain--Gordon
By Cynthia Balana
Philippine Daily Inquirer
First Posted 01:08:00 06/08/2008


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