Rather than see it as a threat, local telecommunication companies are being urged by the Philippines" National Economic and Development Authority (NEDA) to support the deregulation of Voice over Internet Protocol (VoIP) telephony.

NEDA Director-General Romulo Neri lauded the draft guidelines released recently by the National Telecommunications Commission (NTC) classifying VoIP as a value-added service.

In a statement, Neri pointed out that the deregulation of VoIP will spur competition among local service providers which would allow businesses to benefit from the expected lowering of telecommunications costs.

"We are now seeing the benefits of competition, especially in the telecommunications industry, which has been a major source of growth for the Philippine economy," the NEDA chief noted.

National Benefit

Neri is urging telecommunications companies to help the NTC come up with guidelines that would be fair to all industry players, "but more especially to benefit our citizens and foreign investors who have been complaining about the continued high cost of telecommunications in the country."

By NEDA"s estimates, the current cost of international calls can be reduced by as much as 75 percent from 40 cents to about 10 cents or lower per minute.

Neri urged telcos to improve their respective infrastructure in support of VoIP and enhance the overall quality of communication services in the country.

"It will be more beneficial for the telephone companies to hasten the wider use of this technology, or they would suffer the consequences of being left behind," Neri said.

A public hearing on NTC"s draft memorandum is scheduled on May 3. Philippine Long Distance Telephone Company (PLDT), which operates wireless subsidiary Smart Communications Inc., is yet to issue an official statement regarding VoIP.

Globe Telecom Inc., likewise, is keeping mum on the issue and is reserving its official position until the May 3 public hearing, according to its president and CEO Gerry Ablaza.

"I think any new technology we should capitalize on, in terms of bringing about new consumer benefits and, if possible, better pricing," Ablaza answered when asked about the local rollout of VoIP during an earlier interview with reporters.

Ablaza noted that how service providers will charge for VoIP services would not only depend on the "cost structure" of the technology but will on other factors like termination rates and access fees as well.

"Sometimes people equate VoIP with very cheap service. It is, in fact, a more efficient carrier of different services, including voice. However, this is not the only determinant of the cost price structure," he said.

ISP Role

Aside from telcos like Globe and Smart, internet service providers (ISPs) can also now offer VoIP commercially, following the deregulation of this telephony technology.

Already, one local ISP, Mosaic Communications Inc. (Moscom), has said it will begin offering this month VoIP services free of charge to its high-end customers.

The Philippine Internet Services Organization (PISO) has been strongly advocating the deregulation of VoIP since last year. In its official statements, PISO, an industry body of local ISPs, has reiterated that VoIP is a not a voice service that rely solely on the traditional switching technology used by telcos.

According to PISO, VoIP is a multimedia Internet application and allowing only telcos to offer it as a service will be detrimental to the growth of businesses that benefit from it such as call centers and gaming companies.