“May you live in interesting times,” goes an oft-repeated Chinese curse. Malaysian telcos can be forgiven for believing that this saying was especially written for Malaysian mobile operators.

Kashminder Singh

From the abolishment of access fees, to the prepaid and postpaid wars and the arrival of 3G, it has always been, well, interesting to operate in the mobile industry.

There’s more to come yet apparently. Recently, one of the biggest fears of the telcos took a big step forward to realization.

The MCMC (Malaysian Communications and Multimedia Commission), on September 1, released a public inquiry paper on the Implementation of Mobile Number Portability (MNP) in Malaysia. For the first time, concrete details of how number portability would be implemented in Malaysia were made available for comments and counter proposals.

Understandably, mobile operators were content to let the initiative play out slowly and the MCMC obliged. Number portability was first announced in Malaysia in 2004. This was followed by a long period of silence before the public inquiry paper was finally issued.

Why the long delay? According to Adelina Iskandar, Head of the Corporate Communications Department at MCMC, the delay was unavoidable. "Progress was not slow," she says, "We had to be extra careful because it involved other national priorities."

The slow pace, with submission of comments and feedback for the inquiry paper set for this month, means that MNP will only be implemented in 2007 at the earliest. MCMC says that it is targeting a period of 12 to 15 months for the technical implementation of MNP.

Addressing almost every area of concern in great detail, the proposal is the equivalent of a slow-ticking time bomb for mobile operators. A big barrier that has prevented unhappy mobile users from switching to other mobile operators will be removed with the onset of MNP.

With MNP, mobile subscribers will be able to take their existing phone numbers with them when they switch to competing mobile operators. In other words, the current situation of being able to identify service providers by their 01X prefix will no longer exist. One could have a 012 number and be on DiGi while a 019 number could be on the Maxis network if one were to make use of MNP.

Leaving aside the technical details, the salient features in the inquiry paper are as follows.

A one-time fee of RM10 to be charged to the user whenever a subscriber ports his number to another telco.

Telcos may be allowed to impose a maximum contract period of one year.

The imposition of additional costs on callers when placing calls to ported numbers. (Since callers will not know if a number is ported, MCMC proposes a system that alerts callers that they are calling a ported number either through a recorded telephone information service or an SMS information service, which provides the correct tariff information on input by the user of the number which will be called or an audible warning tone that allows users to cancel an off network call).

The unspoken fear in the telco industry is that MNP will lead to mass migration of discontented users to competitors. RM10 is a reasonable fee to pay to switch to another telco while keeping existing handphone numbers.

Most users, when informed of the proposed porting charges, said that the proposed charges were fair and would not stop them from switching to other operators if they got better deals elsewhere.

University student Karl Chai Chen Wei says, "I would go for number portability if it costs only RM10. Any more than that will be bad, though." However, like most other users we spoke to, he had no plans to do so just yet. "I am currently happy with my current telco, DiGi." he said.

Danny Chen, also a university student echoed Chai’s views, "Yes, if it costs RM10, I might switch to another telco if I am unhappy, but so far I am satisfied with the service provided by Maxis."

The general indication is that users are not inclined to switch en masse. This may be because all three telcos are perceived to be somewhat equal in terms of service quality and pricing. However, telcos have every reason to fear MNP.

Its onset may unleash a new round of price cuts and marketing blitzes as telcos strive to retain existing users while enticing those from other networks to port their number over to their network. In that scenario, anything would be possible including large scale switching by users.

The experiences in other countries indicate that this fear is not unrealistic. In Hong Kong, more than 60 percent of users switched to other telcos when MNP was implemented in 1999.

In Finland, which saw MNP in July 2003, the figure was 50%. Taiwanese telcos, are bracing for similar blows this very month when MNP begins operating there. Surveys undertaken by various parties in Taiwan show that 10% to 20% of users will switch telcos when MNP is implemented.

Singapore is on route towards MNP implementation and the telcos there are resisting. According to a Straits Times newspaper report, all three telcos there have submitted objections to the MNP proposal on the grounds that the it was not cost-efficient and would only benefit a small number of users.

Not surprisingly, the Consumers Association of Singapore is in favour of the MNP plan.

Malaysian telco executives seem to have accepted the unavoidable. "The industry and MCMC will work together to implement MNP," says Maxis Head of Consumer Marketing Ng Keng Ming.

A DiGi spokesperson was even optimistic, "We believe we are well positioned to capture any changes resulting in the implementation of mobile number portability in time to come," she said.

However, it’s pretty certain that telcos will have much more to say when they finally respond to the questions posed in the inquiry paper by November. After all, the arrival of MNP will mean that much of the branding work done previously which depended a lot on the 01X prefixes will be lost.