A race to the bottom is underway in the Philippines’ voice market, with PLDT’s mobile subsidiary Smart matching rival Globe’s voice package of PHP1 ($0.02) per minute.
Under its new Express Call 50 offer, Smart’s pre- and post-paid subscribers will have access to this low rate for fifty minutes of calls to any network across three days. Its sub-brands TNT and Sun Cellular are set to provide similar offers charged at PHP5 per minute.
While in many markets data is the focus of low-cost tariffs, the reduced voice interconnect charges which came into effect in the Philippines at the start of this year have prompted heavily discounted voice offers. The lower rate was agreed by rivals PLDT and Globe Telecom – the two major operators in the market – in November 2016 in order to appease the regulator’s demands that they reduce retail prices.
Last week, Smart’s rival Globe Telecom began offering an all-net PHP1 per minute rate, and Smart’s new announcement is likely a reaction to this. Globe’s GoCall50 programme offers much the same deal as Express Call 50, but is only available to prepaid subscribers. Higher-end post-paid subscribers can opt for a PHP299 add-on which enables 300 minutes of all-net calls.
Globe anticipates that its reduced rates will increase voice traffic in 2017. The operator logged 69.1 billion minutes in 2016, which was itself an 18% increase on the previous year. However, revenue from voice dropped 8% to PHP34.1 billion in 2016, while Smart’s fell 21 per cent to PHP27.3 billion.
In recent years, rising competition and government pressure have combined to push down data rates in the Philippines, with Globe claiming that the data tariffs have plummeted 88% since 2014 to hit the current rate of PHP50 per gigabyte.