Submission of Tentative Title and Brief Proposal
SUBSCRIBER SWITCHING BEHAVIOR OF MOBILE NUMBER PORTABILITY (MNP) IN MALAYSIA
Mobile number portability (MNP) is the ability to retain subscribers’ phone numbers when changing the subscription from one service provider to another. It allows competition by allowing consumers to switch service providers, yet retaining their old mobile phone number. As a result, mobile carriers will need to actively compete, and provide innovative as well as improved customer service, in order to retain and expand their subscriber base.
MNP is increasingly accepted as an integral part of a competitive environment and is being considered for introduction in a number of liberalizing countries (Bueler and Haucap, 2003). Its purpose is to foster consumer choice and effective competition by enabling subscribers to switch between providers without the costs and inconvenience of changing telephone numbers. From the late of the 1990s, many telecommunications regulators in the world proposed to implement MNP as a tool for reinforcing competition in the mobile market. It started in Singapore in 1997.
MNP was enforced in Malaysia starting from October 2008 (MCMC, 2008). The main objectives of MNP have been the benefits to consumers as competition between carriers lowers the prices. In particular, the availability of MNP has been expected to bring substantial benefits to subscribers: lower price, greater choice, higher quality and a greater range of services. In particular, it would allow subscribers to take full advantage of the choices that will become available in a more competitive telecommunication market. They will also be able to choose the provider that best meets their needs without incurring different switching costs by changing their phone number.
1.3 The characteristics of the Malaysian mobile telecommunication services market
Malaysia is among the largest mobile market in Asean countries. The Malaysian mobile telecommunication industry exhibits typical aspects of the industry reaching the saturation stage. Malaysia had a mobile subscriber base of more than 35.7 million at the end of third quarter 2011, representing a penetration rate of 124.7% (MCMC, 2011). The penetration rate implying that Malaysian market is already matured and saturated. There are four network operators i.e Celcom, Maxis, Digi and U-Mobile resulting in intensive oligopoly market. MNP in such a saturated market was expected to increase subscribers’ churn rate and to drive the mobile market to new level of competition.
When launching the implementing MNP, the MCMC concluded that, “MNP takes away the inconvenience associated with switching service providers. Consumers will no longer need to worry about losing their contacts when changing service providers. MNP is about improved service quality, better packages, better customer service and giving consumers choice.”
Service providers are currently allowed to charge up to RM25 each time a subscriber changes his/her service provider. This will give mobile phone users choice and freedom to choose their service providers without the inconvenience of having to change their numbers.
With a full hope that MNP will benefit Malaysian subscriber, after 3 years of its implementation, according to MCMC only 1.17% in 2008, 5.06% in 2009 and 2.89% in 2010 of subscribers have submitted their request for MNP. With the average 70% success rate, the actual ported subscribers are still low and insignificant. It could be a truth during the launching 4 year ago, a CEO of one of the service provider has downplayed the effect of MNP and has stated that the MNP is just hype. It seem that the industry analyst also agreed with him, at least for the time being. After spending for great promotion on MNP during its launching year, none of the 4 Telco’s has reported significant migration...