Telco says bill vs expiration of prepaid load may lead to ‘death’ of service

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A PROPOSED Senate bill prohibiting the expiration of prepaid load cards may prompt vigorous debates by way of resistance, going by a position paper submitted by Smart Communications, Inc. (SMART) and Digitel Mobile Philippines, Inc. (DMPI) on Wednesday, Sept. 13.

The Senate committee on public services, led by Senator Grace Poe, is set to do further consultations on Senate Bill No. 848 introduced by Senate President Pro-Tempore Ralph G. Recto, entitled “An Act Prohibiting Telecommunication Companies from Imposing an Expiration Period of the Validity of Prepaid Call and Text Cards and the Forfeiture of Load Credits Thereof.” Meanwhile, the committee is awaiting the position papers of other stakeholders, of which Smart was represented by legal head Roy Ibay and Globe Telecommunications by general counsel Froilan Castelo at a hearing scheduled on Wednesday.

The said position paper by Smart and Digitel argued, among other things, that “the immediate termination of the prepaid service of the cellular industry as cellular companies cannot sell the prepaid load and cards in their present state anymore, nor can cellular companies afford building the infrastructure needed to sustain the present level of service.”

The paper also cited extensively the “practice among operators worldwide to impose an expiration date as a mechanism.”

“Removing or inordinately lengthening the expiration date of a prepaid load card would result in the failure of the prepaid service to contribute revenue to realize the minimum costs of maintaining prepaid service. The end result would be that post-paid subscribers who pay minimum monthly service fees would have to subsidize the prepaid service,” Smart and Digitel also said, adding:

“The expiration date, which ensures realization of the minimum monthly service fee, is thus the most equitable solution to ensure that cellular service is extended even to low-income users at prices which they can afford.”

On the so-called “nakaw load” incidents, Smart and Digitel said these were the result of automatic default data charging. Previously, when a subscriber’s mobile data package is consumed, their phone still connects to the internet and incurs charges of P5 per 15 minutes. Sometimes subscribers use mobile internet without realizing it. For example, they may not be are not aware that their phone settings enable the automatic updating of apps. They think their load was stolen when in fact, data charges were incurred because of this.”

“To address this concern, Smart has disabled auto default charging. Now, when a subscriber’s internet package expires or is consumed, his phone will no longer connect to the internet. He will get an SMS notification encouraging him to subscribe to a data package to resume internet activities. We have also changed the system for our value-added services, such as ring tones and ringback tunes. Subscribers have to send positive confirmation via SMS before they can be charged for these services. We have also made it easier for them to opt out of these services.”

“Because of these efforts, the number of subscribers who say they experienced this problem has significantly decreased. We expect that this will further decline as we implement other measures.” — MMB