Recto: New NTC ruling to spur RP growth
abs-cbnNEWS.com | 07/06/2009 6:50 PM
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MANILA - The National Telecommunications Commission's (NTC) new guidelines on the longer shelf life of prepaid credits will help boost economic growth as these will encourage Filipinos to make more phone calls and send more text messages, Socioeconomic Planning Secretary Ralph Recto said Monday.
"Anything that helps the consumers should be positive to the economy," he told reporters.
Consumer consumption is one of the key drivers of the Philippines' annual economic growth.
Recto was referring to NTC's memorandum circular 03-07-2009, which requires mobile phone companies to extend the validity period for prepaid load credits. (Read background stories here and here.)
The NTC has also issued MC 03-06-2009, which sets service performance standards for cellular mobile phone services. For instance, telecommunications firms are required to maintain a maximum of 4 calls for every 100 call attempts.
Consumption
The government has lowered its growth projections for 2009 at a range of 0.8 to 1.8 percent, following the economy's dismal 0.4-percent gross domestic product (GDP) growth for the first quarter of the year.
Multilateral and international organizations have even bleaker forecasts for the country at zero and negative growths, citing the declining trade and slower consumer spending.
Filipinos have been holding back on making phone calls and sending text messages as they make the most of their hard-earned money in a time of crisis. Based on the financial reports of the country's top two telecoms firms for the first three months of the year, more Filipinos are subscribing to wireless mobile services but each subscriber has been spending less on voice calls and text messages.
Both Philippine Long Distance Telephone Co. (PLDT) and Globe Telecom Inc., respectively the biggest and second-biggest mobile phone service providers, reported continuous growth rates in the number of prepaid users signing up. What they both noticed, however, is a coordinated and steeper decline in their average revenue per subscriber (ARPU), a key indicator of consumer behavior.
Despite the decline in ARPUs, both Smart and Globe's total revenues increased for the three-month period, driven mainly by their bucket-priced promotional offerings which more than offset the decline in their standard rates.
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