A Good News?

Lower texting fees to boost phone firms' revenues

MANILA, Philippines - Contrary to expectations, Philippine mobile phone companies are expected to benefit from lower text messaging charges since it will encourage more people to use the service," an analyst said.

Instead of being detrimental, the rate cut could increase revenues, Grace Cerdenia of online brokerage company 2tradeasia.com said.

Revenues will be volume-driven," she said, referring to a move to reduce text messaging fees by half to P0.50, which was announced by President Gloria Macapagal-Arroyo during her annual report to Congress on Monday.

Before being overtaken by China, the Philippines was considered as the world’s text messaging capital, with more than 50 million subscribers as of the first quarter this year.

Last year, an estimated one billion text messages were sent everyday.

However, lower text charges are only good until October.

For his part, Smart Communications, Inc spokesperson Ramon Isberto said that it is too early to tell how the new promotion will affect the company’s revenues.

It is designed to provide an alternative to customers who want to send messages also to other networks. Let’s see how it goes, if the market accepts it," Isberto said in a phone interview.

Sun Cellular officials could not be reached for comment, but company senior vice president for legal affairs William B. Pamintuan earlier said it will respond" to industry rates.

Globe Telecoms Inc refused to comment. - GMANews.TV