Live Issue... Number portability unsettles telcos

Freedom doesn’t always come at a price. So says StarHub, the Singaporean telecommunications firm which has just offered its mobile services for free in the week that the Government passed a law that allows people to change their network operator without having to change their phone number. Unlimited calls, text messages and MMS without paying a cent, for three months. No contract necessary and no subscription charge.

StarHub’s ‘Freedom movement’ campaign is the first attempt by one of Singapore’s three big telcos to take advantage of mobile number portability (MNP), which came into being on 13 June. “They can say what they want, whenever they want, without worrying about being charged,” claims the campaign.
Which is not dissimilar to SingTel’s ‘Free speech’ campaign, which encouraged Singaporeans to exercise their “right to free speech” by signing up for its discounted services last year.

SingTel, the market leader, will no doubt hit back with a generous offer of its own. Although the company refuses to reveal its plans in any detail, it is probable that they will involve the iPhone. SingTel secured a deal with Apple earlier this month to become the first Singaporean telco to offer the 3G version of thehandset. Industry watchers are warning of a price war also involving number three player MobileOne, while media owners are anticipating a spike in marketing spend.

MNP is soon to hit Malaysia too, a country with an equally competitive mobile telco market. Maxis, Celcom, DiGi and the newcomer U Mobile have only a few months to prepare. But will it really make much difference to the market?

It did in Japan, notes Chris Beaumont, the president of Grey Japan. “MNP immediately levels the playing field,” he says. “It gives consumers more flexibility, and challenger brands the opportunity to steal share from the market leader - which is what Softbank did at the expense of DoCoMo.”

SoftBank announced a price plan that dramatically undercut those of DoCoMo and KDDI on the eve of MNP launch in October 2006. The move followed a report by Nikkei that predicted SoftBank stood to lose 25 per cent of its customers when MNP came in - a much bigger hit than its rivals.

“The impact of MNP on the market is far bigger than the transition from 2G to 3G,” adds Beaumont.

“Early adopters are, in this case, irrelevant. Players become more aggressive as they try to attract or retain customers - if you stand still, you will go backwards. As for consumers, it is a true test of loyalty. And loyalty is simply the absence of a better value choice.”

Other than price, operators will be busy arguing whose service is best. In this regard, Chit Quah, the MD of Naga DDB, has his money on DiGi to win out in Malaysia.

“While Maxis tends to be seen as big and arrogant, DiGi is seen as hungrier and more personal,” he says.

“This has big implications for businesses, which have been put off switching because of the time and cost of changing their numbers.”

MNP has social implications too, reckons Lara Hussein, MD of M&C Saatchi, which handles Celcom’s advertising.

“Your phone is an extension of your body, of who you are. And so is your number,” she says. “If a DiGi ‘012’ prefix is calling, you can bet that the caller is someone younger than you. If it’s a ‘019’ Celcom number, they probably have money. MNP will democratise mobile phone use which can’t be bad.”