Text cost to go down by 50 centavos

By May 1, 2009, the cost of text messaging would go down from P1 to 50 centavos per text. This is according to House oversight committee chairman Quezon Rep. Danilo Suarez, as the panel agreed on the decision in a meeting with representatives from telecommunication companies (telcos) together with officials of the National Telecommunications Commission (NTC) and the Bureau of Internal Revenue (BIR).

The decision will be formalized in a resolution that he would file when Congress resumes session in April 13, Suarez said. “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 added. The 50-centavoes includes a five-centavo computer education tax.

Suarez said that their estimate of telcos’ text messaging cost is 18-19 centavos, adding the 5-centavo tax would make the cost reach about 25 centavos. “So if they offer text messaging at 30 centavos per text, they have a profit of five centavos,” he said.

Suarez continued with his illustration, “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 added that if they offer it at 35 centavos, their net profit would soar to P73 billion a year.

President Arroyo, Speaker Prospero Nograles and Senate President Juan Ponce Enrile are all supporting his text cost proposals, according to Suarez.

Representatives of the country’s leading mobile service providers, 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, also reiterated that the additional 5-centavo text tax should 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 added.

He also assured that the money would be beyond the reach of congressmen and other politicians, and that a board composed of educators would administer the trust fund.

(Source: Pinoy Business)