Mobile Number Portability

Topics: Mobile phone, Local number portability, Mobile number portability Pages: 14 (3830 words) Published: April 23, 2012
RESEARCH PROJECT

Submission of Tentative Title and Brief Proposal

SUBSCRIBER SWITCHING BEHAVIOR OF MOBILE NUMBER PORTABILITY (MNP) IN MALAYSIA

1.INTRODUCTION

1.0 Background

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.

1.2 Introduction

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.

1.4 Purpose

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...

References: Aoki, R. and Small, J. (1999), ‘‘The economics of number portability: switching costs and two-part tariffs’’, CRNEC working paper, mimeo, University of Auckland, Auckland.
Bjorkroth, T. (2005), ‘‘Fierce price competition and teaching to port numbers – investment in future generation subscriber base?’’, paper presented at the 15th International Telecom Society, Berlin, Germany, September 9-12.
Borenstein, S., MacKie-Mason, J. and Netz, J. (2000), ‘‘Exercising market power in proprietary aftermarkets’’, Journal of Economics and Management Strategy, Vol. 9 No. 2, pp. 157-88.
Buehler, S. and Haucap, J. (2004), ‘‘Mobile number portability’’, Journal of Industry, Competition, and Trade, Vol. 4 No. 3, pp. 223-38.
Bueschken, J. (2004), Higher Profits through Customer Lock-in: A Roadmap, Thomson Learning, New York, NY.
Dick, A.S. and Basu, K. (1994), ‘‘Customer loyalty: toward an integrated conceptual framework’’, Journal of the Academy of Marketing Science, Vol. 22 No. 2, pp. 99-113.
Gand, A. and King, R. (2000), ‘‘Consumer behavior and marketing strategy’’, research paper, Center for Customer Behavior Research at University of Minnesota, Twin Cities, MN.
Gans, J.S., King, S.P. and Woodbridge, G. (2001), ‘‘Numbers to the people: regulation, ownership and local number portability’’, Information Economics and Policy, Vol. 13 No. 2, pp. 167-80.
Gerpott, T.J., Rams, W. and Schindler, A. (2001), ‘‘Subscriber retention, loyalty, and satisfaction in the German mobile cellular telecommunications market’’, Telecommunications Policy, Vol. 25 No. 4, pp. 249-69.
Grzybowski, L. (2005), ‘‘Regulation of mobile telephony across the European Union: an empirical analysis’’, Journal of Regulatory Economics, Vol. 28 No. 1, pp. 47-58.
Guston, D. and Sarewitz, D. (2002), ‘‘Real-time technology assessment’’, Technology in Society, Vol. 24 Nos 1-2, pp. 93-109.
Haucap, J. (2003), ‘‘Telephone number allocation: a property rights approach’’, European Journal of Law Economics, Vol. 15 No. 2, pp. 91-109.
Jeong, J.H. and Park, M.C. (2003), ‘‘A study on service churning intention in Korean mobile communication industry: impact of mobile number portability’’, JCCI 2003, 2003.4.
Jones, M.A., Mothersbaugh, D.L. and Beatty, S.E. (2002), ‘‘Why customers stay: measuring the underlying dimensions of services switching costs and managing their differential strategic outcomes’’, Journal of Business Research, Vol. 55 No. 6, pp. 441-50.
Keaveney, S.M. (1995), ‘‘Customer switching behavior in service industries’’, Journal of Marketing, Vol. 59 No. 2, pp. 71-82.
Klemperer, P. (1987), ‘‘The competitiveness of markets with switching costs’’, Rand Journal of Economics, Vol. 18 No. 1, pp. 138-50.
Krupp, N. (2005), ‘‘You can take it with you. A study of wireless local number portability effects in the United States telecommunications market’’, Proceedings of International Conference Association, New York, NY, May 24-28, 2005.
Lee, S.-W., Kim, D.J. and Park, M.-C. (2004), ‘‘Demand for number portability in the Korean mobile telecom market’’, Proceedings of the 37th Hawaii International Conference on System Sciences.
Malaysian Communication and Multimedia Commission (MCMC) Q4, 2008 Report
MacKie-Mason, J.K
Park, M., Kim, D. and Lee, S. (2007), ‘‘Demand for number portability in the Korean telecom market’’, Journal of Global Information Management, Vol. 15 No. 1, pp. 43-64.
Park, M.H., Oh, W.K. and Lee, C.S. (2004), ‘‘The effect of sequential introduction of number portability on mobile telecommunication market and economic welfare’’, Korean Economics Review, Vol. 52 No. 1,
pp
Reichheld, F.F. (1996), The Loyalty Effect: The Hidden Force behind Growth, Profits and Lasting Value, Harvard Business School Press, Cambridge, MA.
Reinke, T.H. (1998), ‘‘Local number portability and local loop competition’’, Telecommunications Policy, Vol. 22 No. 1, pp. 73-87.
Shin, D. (2006), ‘‘A study of mobile number portability effects in the United States’’, Telematics and Informatics, Vol. 24 No. 1, pp. 1-14.
Srinagesh, P. and Mitchell, B. (1999), ‘‘An economic analysis of telephone number portability’’, in Gillett, S.E. and Vogelsang, Competition, Regulation, and Convergence, Lawrence Erlbaum, Mahwah, NJ.
Wright, J. (2002), ‘‘Access pricing under competition: an application to cellular networks’’, Journal of Industrial Economics, Vol. 50 No. 3, pp. 289-315.
Yang, H.T. and Choi, M.K. (2003), ‘‘Study on customer retention strategies for the wireless telecommunication service providers at the introduction of MNP’’, Journal of Korean Institute of Communication Sciences, Vol. 28 No. 2B, pp. 157-69.
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay on Mobile Number Portability
  • Synopsis on Mobile Number Portability Essay
  • Mobile Number Portability Essay
  • Mobile Number Portability in Ghana First Year Report Essay
  • Marketing Research on Mobile Number Portibility in India Essay
  • Mobile Number Portability Essay
  • Mobile Number Portability Essay
  • Essay about Mobile Number Portability

Become a StudyMode Member

Sign Up - It's Free