Change Handphone Company And Keep Old Number

At long last, we can switch our mobile phone service provider without changing our mobile phone number. Wonderful, don't you think?

Sony-Ericsson W950i

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TODAY, Thursday, 17th April 17, 2008
WHO WINS IN NUMBERS GAME?
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HEDIRMAN SUPIAN
hedirman@mediacorp.com.sg

"A SEA change" is what Mr Leong Keng Thai believes full mobile number portability will bring to the local telco industry. And the Infocomm Development Authority's (IDA) deputy chief executive is not alone in expecting a shift of power towards consumers now that a key barrier to switching between operators has finally fallen.

As it stands, Singapore is well on its way to having a fully-liberalised telecoms market. Subscribers already have their pick of more than 25 mobile pricing plans from the three major telcos, and mobile subscription prices have dropped every year since 1997 - from $47 a month for a basic plan, to as low as $20 today.

Could plans become even more attractive now?

With its 5.8 million mobile phone subscribers, the Republic has a penetration rate of 127 per cent. Hong Kong has a mobile penetration rate of 152%.

Mr Leong said the IDA did an extensive study on "all" markets, and Hong Kong showed the highest annual churn rate - the percentage of subscribers that port their number from one telco to another - of 15%.

Hong Kong has five mobile network operators and in the past year, these averaged over 110,000 portings of mobile numbers each month. In total, over 1.38 million numbers were ported last year.

If such figures are any indication of what might happen here, then it is fair to expect the three telcos - SingTel, StarHub and M1 - to offer more competitive prices and plans, in an effort to retain or sway subscribers in an already saturated marketplace. SingTel has 41 per cent of the market, while StarHub and M1 trail with 31 and 27 per cent, respectively.

But consumers expecting a price war in the long run might be disappointed. Mr Quek Peck Leng, SingTel's executive vice-president (consumer), said: "Offering the best value through all our various offerings and providing the best possible service experience have always been our top priorities. Ultimately, it does not make sense for us to engage in a destructive price war and destroy value."

Mr Foong King Yew, a research director from Gartner, said: "It has happened in Australia, Hong Kong, Korea and Japan - there will be an increase in the churn rate for the first 12 to 18 months. This will stabilise eventually."

Mr Adit Harinasuta, StarHub's head of services and solutions, said: "We do not foresee full mobile number portability having a significant bearing on customer churn. We believe that cultivating loyalty will be a key focus for all operators."

Mr Foong expects telcos to "go into product or service bundling and offer handset subsidies" to offset the attraction of consumers being able to switch operators without the hassle of changing numbers. SingTel already bundles broadband, mobile phone and pay-TV services with its mio service and StarHub does a similar bundle with its Hubbing concept.

M1 has matched its competitors by offering per-second billing and savings for subscribers with multiple accounts. "Carriers will strive to hold onto their existing customers with more focus on service packaging. But I don't expect them to be draconian in their tactics," Mr Foong said, referring to the concern that telcos might impose more drastic penalties for contract termination.

As barriers are lifted for consumers, the IDA hopes new players will come in. Wireless broadband providers or Voice-over-Internet-Protocol providers could provide mobile voice calls routed through the Internet, it said.

But the odds are against new entrants.

"The market is very mature, and stacked against new entrants because the existing players already have service and product bundling, and post-paid contracts are already in place," said Mr Foong. "New entrants have to come up with something compelling or disruptive."

This is not impossible.

Japan - where prices for voice calls have been traditionally high - has seen an industry shake-up thanks to daring price moves and better product offerings.

No 3 mobile operator SoftBank has intruded on the turf of market incumbent NTT DoCoMo, by bringing prices for voice calls down. Its advertising campaign even featured a zero-yen tagline for its mobile service. KDDI, another smaller player, has lured subscribers with better mobile handsets and being first-to-market with multimedia download services.

It would be wise, perhaps, for the big telcos to keep their ears close to the ground in their battle for market share, as consumers are likely to demand more competitive prices and innovative services.

Ms Laura Khng, a public education executive, said: "I can't wait to switch. Ultimately, I want lower prices, but if they want me to stay with them, they may need to offer better loyalty rewards and cooler products.

"Consumers are better informed these days. It's easy for us to compare and spread the word around when there's a good deal. The operators should take heed of that."