PLDTI denounces moves to limit text messaging

THE PHILIPPINE League for Democratic Telecommunications, Inc. (PLDTI), a non-profit consumer advocacy organization, voiced its vehement opposition to the recent moves by major cellular service operators Globe Telecoms GMCR (Globe), Smart Communications (Smart), and Pilipino Telephone Corp. (Piltel) to unilaterally reduce their allocated number of so-called "free" SMS text messages to users per month.

The country's major cellular companies have made it known that beginning next month, they intend to cut down the SMS message allocations currently bundled with their subscriber plans and prepaid cards by as much as 60 percent.

"This is a blatantly unfair, anti-consumer move by the two major cellular players Globe and Smart, who appear to be conniving to effectively fix prices for text messaging and keep their stranglehold on the consuming public," said PLDTI president Jonathan Domingo. "Neither Globe nor Smart have presented any clear justification for this move at this time given their record profits."

Globe Telecomm, a joint venture between the Ayala group of companies and Singapore Telecom, reported that unaudited net income after income tax for the first quarter of 2001 increased to P1.07 billion, up by 219% from P335 million posted for the same period in 2000. Meanwhile, its wireless subscriber base has increased steadily, to just under 3 million cellular telephone users.

Smart's parent company, the Philippine Long Distance Telephone Company, reported consolidated net income for the first half of 2001 of P1.4 billion, up 1,022 per cent from P122.5 million in the first half of 2000. The nation's largest telephone service provider has attributed the improvement in net income to the turnaround of its wireless subsidiaries.

"We must remember that these text messages aren't really free since you can only avail of them by paying for a service plan offered by the cellular companies," added Emmanuel Amador, vice- president of the League. "These allotted text messages are part of the bundle consumers pay for. When a subscriber pays for a plan of Globe or Smart, they don't just buy airtime. They purchase a specific number of text messages as well. The cellular companies would hardly be able to sell voice-only subscriber plans without text messaging."

Amador explained that cellular companies specifically market their phones as texting devices -- as two-way pagers -- more than as actual telephones. This is done by making text messages cheap in relation to voice communication (P1 per 160-character text message, as opposed to an P8-per-minute voice call).

"Cutting down on text messages therefore is akin to what is called 'bait-and-switch', wherein customers are lured with a promise, for example, 150 text messages a month, and then the promised benefits are cut down after consumers have taken the bait," he continued.

"We hope to stop these abusive cellcos from imposing such abusive schemes on a hapless consuming public," said Atty. Rod Domingo, PLDTI legal counsel. "We will exhaust all legal means available to protect users of both Globe and Smart from arbitrary and unjust moves such as this," he said.

PLDTI is a non-stock, non-profit consumer watchdog organization for the Philippine telecommunications industry. In 1998, the group successfully spearheaded the resistance to a move by the Philippine Long Distance Telephone Company (PLDT) to impose mandatory local call metering, by alerting the public before the telecoms giant could implement its plans. After widespread exposure and numerous public hearings in various government fora, the move was shelved indefinitely.