Home > Kahindik-hindik, Philippine Marketing, wawamTECH > corporate greed : telcos with multi billion revenues refuse to refund consumers on overcharging on text

corporate greed : telcos with multi billion revenues refuse to refund consumers on overcharging on text

this is the news today – giant telcos Smart and Globe have been overcharging consumers on the text messages they have been sending in the past year to the tune of a total of P1.4B according to the Philippine wawamDaily Inquirer (PDI).

philippine consumers have taken to texting as the most often used way to communicate with each other that the philippines has become the texting capital of the world. the PDI article says filipinos send a total of 20M texts a day or 600M texts a month.

the overcharge is a result of the telcos charging consumers P1.00 per text instead of P0.80 as directed by the NTC (National Telecommunications Commission) effective December of last year.

the order to reduce text costs to consumers was a result of a separate directive by the NTC to reduce interconnection charges. interconnection charges were reduced to P0.15 from P0.35 but the telcos did not pass the savings on to consumers.

the whole idea behind the reduction of interconnection charges was to reduce the cost to consumers but telcos instead decided to pocket the savings and fatten their profits.

(read PDI article in full here: Text overcharging bared)

the telc0s in their interviews are saying they will contest the refund in the courts. in other words, they really want to keep the P1.4B for themselves even though these savings were obtained for precisely the reason of reducing charges to consumers.

what will happen to the telcos if they refund consumers? nothing.

for sure, they will not go bankrupt nor will they loose sleep even for a night, not even during siesta if they give the refund. the P1.4B refund is a mere 0.8% of the combined revenues of  Smart and Globe of P166.8B (source: PDI article). the telcos refunding the consumers will hardly affect their bottom line.

while for sure the telcos will not go bankrupt, it will certainly be appreciated by consumers. around 85% of the philippine population belong to the DE socio-eco classes and that means these are the bulk of the customers of globe and smart. in the first place, it is  this high percentage of the poor being their customers which has made texting the most popular service of the telcos. to the poor, even a few peso savings and in this case in texting cost matters a lot.

happier and appreciative consumers will mean increased usage by the consumers. so in the end it will be a no loss and in fact a gain by the telcos. whatever amount they give to consumers for sure will come back to them in increased usage.  except of course when corporate greed strikes.

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