Companies selling ringtones no longer required to meet RP ownership rules

MANILA, Philippines - Companies that sell ringtones, music, logos, and video clips through mobile phones are no longer required to meet Philippine foreign ownership restrictions. This was announced by the National Telecommunications Commission (NTC), citing a decision which relaxed foreign ownership rules for value added service (VAS) providers for the local telecommunications industry. As a result, prices of mobile content services may be reduced, benefiting consumers. The move could also attract foreign investors and stimulate growth and development of telecommunications facilities and services, Edgardo Cabarrios, director of NTC’s common carrier and authorization department earlier said. Companies that provide mobile content no longer needs to be 60 percent owned by Filipinos, the agency said in Office Order No. 28-03-2009. It added that the order amends or supersedes any order or memorandum circular of agency. VAS providers only serve a particular telecommunications company, an activity covered by a private contract, the NTC said, adding that the telco owns and manages the transmission, switching, and distribution facilities. "The citizenship requirement of at least 60 percent Filipino shall apply only to mobile content service providers that offer the service/s directly to the general public or to whoever may wish to avail of the same," the regulator said. Currently, only Filipino-owned companies can provide telecom and Internet content directly to local subscribers. Meanwhile, foreign-owned companies are required pass through local telecom firms under previous regulations. The order was issued after a Department of Justice opinion said that the nationality requirement imposed by the 1987 Constitution on public utilities is not application apply to VAS providers. "The activities of VAS providers are not included in List B of the Foreign Investment Negative List, which can only be amended upon the approval of the president," DOJ said. Earlier, the NTC issued a certificate of registration to Zed as a VAS provider, allowing the company to operate for five years until March 2014. The agency previously denied Zed’s application because it was 99 percent foreign-owned. ZED is one of Smart and Pilipino Telephone Corp.’s service providers. The foreign company offers ring tones, wallpapers and other applications to mobile-phone subscribers. - GMANews.TV