Cellphone firms pocket unused prepaid credits
POSTSCRIPT By Federico D. Pascual, Jr.
The Philippine Star 03/08/2005

VANISHING CREDIT: Finally, a senator is questioning
the legality and fairness of cellphone companies'
forfeiting the balance of pre-paid phone card values
that are not used within a restrictive short time.

Sen. Manuel Villar, finance committee chairman, has
filed a resolution asking the public services
committee to look into possible violations of RA 7295
that provides that rates of telecom firms "must be
fair, reflective of a fair return on their
investments, reasonable and are not distorted such
that the public is adversely affected."

A Globe Telecom callcard load of P100 must be used in
15 days, otherwise its balance at the end of that
period is forfeited. If no more credit is loaded in 60
days, the SIM card (subscriber identity module) of the
phone is deactivated and becomes unusable.

A Globe load of P300 or P500 must be used in 60 days.
Any unused balance after that period is forfeited, and
if no more credit is loaded in 120 days, the SIM card
is deactivated.

Smart Communications, on the other hand, has set a
60-day deadline for using up a prepaid load of P300,
P500 or P1,000, and a three-day limit for P30
auto-load, six days for P60 auto-load, and 12 days for
a P115 load.

* * *

POOR USERS HIT: The deactivated SIM cards of phones
using pre-paid loads cannot be used again. The user
has to buy and install another SIM card, which carries
another phone number, to continue using his phone.

Villar said the time limit on the use of prepaid cards
is too short and restrictive, especially for
low-income users who are usually people with tight
budgets.

"Forfeiting too soon the stored value of their prepaid
phone cards or permanently deactivating their SIM
cards is like taking away their hard-earned money," he
said.

The forfeited unused credits in deactivated pre-paid
cards are included in the phone companies' operating
revenue. "I would like to know whether such policy or
practice violates certain laws," the senator said.

* * *

WINDFALL: "Considering the number of prepaid-card
subscribers have reached millions, we can assume that
the unused values that get forfeited also reach
millions or even billions of pesos," he said. "In this
case, the telecom companies' gain becomes the phone
subscribers' loss."

Smart reported operating revenues of P4.99 billion in
2003 -- of which P4.09 billion, or 82 percent, came
from its more than 10.7 million prepaid subscribers.
On the other hand, Globe reported P8.08-billion
revenues from nine months of 2003 from its more than
7.4 million prepaid subscribers.

Phone user Mon Ramirez of dpmasia complained in an
email: "Why do we have to use up, say, a 100-peso
prepaid card in 10 days or a 30-peso e-load in three
days, or P10 per day? If we don't, the load is lost.
The telcoms earn from the unused load; the consumer
paid for the load it was not able to use.

"This practice prevents us from making tipid since we
must use all the load before the expiration date. It
is like buying a school pad that we must use within a
specified date or else it disappears."

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