Pre-paid mobile loads valid for one year as 3rd telco player sets up

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DICT OIC-Sec. Eliseo Rio Jr. (Photo: www.terrapinn.com)

By Lara Climaco | FilAm Star Correspondent

Pre-paid load bought in bulk, at minimum denominations of PHP 300, is now valid for one year in the Philippines. As announced last month, the one-year validity should cover pre-paid load credits regardless of amount starting January 5 but the Department of Information and Communications Technology (DICT) gave telecom companies a grace period of six months to fully comply with the directive.

“We allowed this to prevent their systems from the possibility of crashing if changes are made abruptly, which will not only highly inconvenience the consuming public but may even cause serious damage to the telco industry,” said DICT OIC-Sec. Eliseo Rio Jr.

Trade Sec. Ramon Lopez portrayed the extended validity of pre-paid load as the Duterte administration’s Christmas gift to Filipino consumers. The DICT, Department of Trade and Industry and the National Telecommunications Commission signed a joint memo circular to this effect last December 20 because “the government wishes to afford subscribers more time to use their pre-paid mobile credits.”

Pre-paid credits purchased as part of promos or other services with specific period of use were the only exceptions mentioned when the joint circular was announced. However, last January 5, the DICT qualified that pre-paid load credits under PHP 300 could not yet be covered with extended validity.

“We apologize for giving the public false expectations but if we have to err, it would be on the side of being 100 percent certain that nothing untoward will happen,” Rio said.

In a statement, Globe Telecom came up with technical reasons why it wasn’t quite that simple to extend the validity period of pre-paid load credits. It will require additional capacity and the purchase of licenses and software programming by third-party vendors, it said. Additionally, system tests would have to be made to ensure inter-operability, including full testing of additional number series to be made available to new subscribers.

“Telecommunications as a business requires complex, advanced and real-time systems that should be extensively tested, bearing in mind the impact to our 57 million pre-paid customers, including transactions and voice, SMS, and data traffic that these systems support,” Froilan Castelo, Globe’s general counsel, was quoted in the statement issued January 5.

“The six-month extension will give us ample time to prepare for the smooth and seamless implementation of the expiration change across all denominations,” it was added.

Responding to a comment on Facebook that “six months is like eternity for us consumers and a gift of more profits to these telcos,” Rio pointed out a silver lining.

“I see here an experiment to prove a point. If there is really a competition between the two telcos, they should be racing right now as to who can comply first to make the expiration of their load to one year. Definitely, the first one to do so would have subscribers of the other telco flocking to it. But if the two telcos would take the six months to comply at the same time, then we really have a conniving duopoly. In six months, we will have a third player that will really compete,” he told the Facebook commenter.

The entry of the third telco player is still a top concern for Malacañang. On his first press briefing for 2018 last January 3, Presidential Spokesman Harry Roque Jr. clarified that a Chinese entity would be prioritized for the third telco slot because it was “formally offered in a bilateral talk between the Chinese Premier and the Philippine President.”

“Right now, because it was offered and accepted, we will honor our word. But as I said, if for any reason, China Telecoms or any company nominated by the Chinese government finds the 60-40 requirement in the Constitution to be unacceptable, then of course, that will now give us the option to offer it to other companies,” Roque said.

Last month, Rio told local reporters that other foreign players, specifically from South Korea, Japan, the United States and Australia, have likewise expressed interest in taking the third telco slot, which the government aims to award by this quarter.

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