ARE the “abuses” allegedly committed against their subscribers by the telecommunication firms the reason they are the richest in the country, their industry the leading moneymaker and the stock-market leader?

These abuses, according to TXTPower, a leading cell-phone consumer advocacy group, are (1) diminishing load, (2) spam messages/unsolicited broadcast messages such as ring tones, promo offers, (3) expiration of free text, (4) revising of unlimited text promo and (5) charging for a whole minute or a fraction of a minute even if subscriber used a few seconds only and (6) setting of expiration dates on prepaid call-text cards.

The industry contributes about 4 percent to the total gross domestic product (GDP). It accounted for 6 percent of total fixed asset investments in the entire country between 1999 and 2003.

It employs about 20,000 people directly and another 40,000 to 60,000 in supporting industries. These employees total wages and salaries came to more than $300 million (P15 billion) in 2005.

As of September 2006, the total combined revenue of the three largest mobile-phone companies amounted to P147.94 billion.

Of this total revenue, the Philippine Long Distance Telephone Co. (PLDT) group, owned mainly by businessman-industrialist Manny V. Pangilinan and his partners and associates, had P95.4 billion from January to September. Globe Telecom Inc., the second largest, owned by the Ayala Group led by Jaime Augusto Zobel de Ayala, had P44.72 billion.

Smart Telecommunications Inc. and Pilipino Telephone Corp. (Piltel) are subsidiaries of PLDT.

Third of the mobile-phone industry giants, Sun Cellular, which is the brand name of Digital Telecommunications Phils. (Digitel), owned by John Gokongwei’s group, had P7.82 billion.

TXT Power maintains that some of these telcos’ profits came from the “abuses” they mentioned.

What percentage is accounted for by these “abuses”? TXTPower could not specify a figure.

“We think that some of the huge profits of the telecom came from their abuse of their consumers—particularly the diminishing load and text spam,” Anthony Ian M. Cruz, TXTPower spokesman and co-convener told The Manila Times in an interview.

Cruz, however, failed to estimate the percentage of the contribution of the “abuses” to the companies’ profits.

One of the most common and primary complaints The Times hears from mobile-phone users is the expiration date of their prepaid cards. The P300 card must be used within two months from initial use.

TXTPower could not discuss this matter extensively with The Times because it is the subject of a court case between the big three and the government’s telecommunication industry regulator, the National Telecommunications Commission.

In August 2000, the NTC issued Memorandum Circular 13-6-2000, ordering telcos (1) to adopt pulse charging, (2) to extend the validity of prepaid call cards to one year from date of initial use and (3) to have each mobile phone’s SIM card registered.

The telcos opposed the NTC orders. They petitioned in the Quezon City Regional Trial Court to issue an injunction to stop the NTC from enforcing its order. The court granted their petition. The NTC then made the necessary coun­termotions. The case is still pending—after 7 years.

An informal man-on-the-street survey done by The Times showed that vanishing load is the main grievance of subscribers followed by spam messages. Vanishing load is a cell-phone user’s sudden realization that for an inexplicable reason his load has suddenly become very low. This is the result of the user’s inadvertently pressing the OK or yes digit to a promo offer or any kind of message from someone, including surveys and invitations to enter a contest.

Most of The Times survey respondents claimed having a diminishing load experience of at least P2 up to P10 a day. If only 500,000 of the approximately 40 million mobile-phone subscribers each suffered diminished load of P2 a day that makes a total of P1 million. Therefore, the amount is P365 million a year.

In 2005, the NTC reported that Filipinos sent an average of 250 million text messages a day, a 25-percent increase from 200 million messages sent a day in 2004.

“Diminishing load is a significant problem, kasi hindi lang piso ang nawawala sa subscribers,” Cruz said.

“We don’t understand why they can’t return the diminishing load from their subscribers with their sophisticated technology. A subscriber who lost P2, napakalaking bagay na sa kanya ’yun,” he added.

Formed in 2001, TXTPower is a broad organization of consumer advocates convened by students, tech experts and professionals.

The group also criticized the plan of Smart and Piltel to impose expiration dates on free-text messages or short mes­saging system (SMS) privileges they had offered to lure their subscribers.

In November 2006, Ronaldo O. Solis, then-NTC commissioner, approved the expiry of free SMS together with airtime on all e-load and regular top-up transactions.

Subscribers of Smart and Piltel who buy P300 prepaid cards can enjoy 33 free texts, while those worth P500 and P1,000 allow subscribers to enjoy 83 and 250 free-text messages, respectively.

The PLDT units said free SMS would expire together with the airtime, which means that subscribers should maintain at least P1 on their accounts to avail themselves of the free text.

Previously, these free-text messaging privileges did not have expiry dates.

Cruz said the imposition of expiry dates on free text allocations violates the rights of Smart and Talk ‘N Text subscribers to make full use of the value of the prepaid load they buy from both companies.

“The value of any prepaid load bought by subscribers includes these so-called free text allocations and free airtime. Smart and Piltel must respect the manner by which subscribers opt to use their prepaid load, including the free text allocations and free airtime,” he said.

“At a time when the industry is moving toward bulk pricing, and in the face of growing consumer demand for the lifting of expiry dates of prepaid load and prepaid SIM [subscriber identification module] cards, the twin moves of Smart and Piltel look like a sore thumb,” Cruz added.

If left unchecked, Cruz said, then the similar plans of Smart and sister company Piltel will adversely affect millions of subscribers, considering that these two companies operate the largest wireless network used by the most number of mobile telephony users.

Piltel only has prepaid subscribers while Smart’s prepaid customers constitute more than 90 percent to its subscriber base.

Cruz stressed that this is a serious problem because consumers cannot get the value of what they buy.

“They want to steal the 33 free-text messages [for a P300 prepaid card]. Ang nawawala sa kanila [subscribers] ay P33 [worth of text],” he estimated.

“Wala kaming makitang dahilan para gawin nila ’yun. Gaano ba kalaki ’yung free text na binibigay nila. Ikalulugi ba nila ’yun?,” Cruz said.

The group also said that the advertisements put out by Smart and Piltel announcing its plan do not adequately inform all their prepaid subscribers.

They stressed that the Piltel and Smart announcements on January 8 were small and plain, compared to their usual full-page or multipage advertisements in full color.

“If the objective of the latter is to attract attention, [Smart and Piltel] seem to aim for these plain announcements to be ignored. We denounce such disrespect for the basic right of the consumer to information,” Cruz said.

Smart’s rivals Sun Cellular and Globe also have expiration dates for their free-text messages.

Touch Mobile or Globe P500 prepaid card has free 82 text and P300 prepaid card with 35 free SMS.

Sun Cellular, on the other hand, offers as much as 90 free texts with prepaid phone cards in P50, P150, P300 and P500 denominations.

Edgardo Cabarrios, director of the National Telecommunications Commission Common Carrier Authorization Department (CCAD), explained that before Smart and Piltel did not follow the moves of Sun and Globe to have expiration dates on free SMS.

Cabarrios added the PLDT wireless subsidiaries want to be different from their rivals. However, last November, Smart and Piltel also sought NTC approval to impose expiration dates.

However, the NTC barred the telcos’ plan on January 15, the day Smart and Piltel had planned to implement their expiry on their SMS privileges.

“In order to give time to TXTPower to argue its objections and Smart and Piltel to respond to the objections and more importantly so as not to adversely affect the existing users now enjoying accumulated free texts, the [NTC] directs Smart and Piltel to hold in abeyance the implementation of the expiration of free SMS together with airtime on all e-load and regular top-up transactions until further orders from the Commission,” Ab­raham R. Abesamis, NTC chief said.

“This is a victory for consumers sick and tired of these big companies’ daily acts of abuse and disrespect,” Cruz said.

“The NTC should make their order permanent since there’s no rhyme or reason for the plan of Smart and Piltel,” he added.

Had consumers not complained, Cruz said, Smart and Piltel would have had a field day since January 15, 2007, in “fleecing their subscribers who did not have full knowledge that they would be losing all the free text and free airtime load once their regular load expired.”

TXTPower contends that all so-called free text and free airtime load obtained by subscribers every time they buy prepaid load are “not really free and form part of the total value of the prepaid load subscribers buy.”

“Ergo, any move by Smart and Piltel to forcibly expire these so-called free text and free airtime is tantamount to theft. This could mean millions of pesos of losses for consumers who were not even provided adequate and complete information by the telecom giants,” Cruz noted.

The group also asked NTC to look at Globe, Smart and Piltel’s revised unlimited texting services within their network. [See details in “Only 30 complained.”

The telecommunications companies, however, vigorously denied the allegations that “abuses” make them profitable (See “Telcos refute allegations of “abuse.”)

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