Number portability faces several hurdles

Dreams of mobile phone number portability remain as distant as ever in 2009, as private operators raise questions about the cost-effectiveness and necessity of implementing the policy.

Numbers matter to manymobile customers,wholook for lucky and auspicious combinations availablefromsellers atMBK,one of the capital’s most popular spots for phone-shopping. POSTFILEPHOTO

Mobile number portability (MNP), a feature common in many international markets, allows consumers to use the same telephone number even if they switch service providers.

Implementation in Thailand has been hindered in large part by mobile operators, who know that the reluctance of users to change numbers helps reduce customer "churn" and acquisition costs.

But the National Telecommunications Commission (NTC) sees MNP as benefiting consumers and strengthening competition within the telecommunications sector.

Building a central clearing house to support MNP is estimated to cost $20 million (696 million baht), excluding additional investments needed by individual operators to facilitate number switching.

MNP is one of the key industry reforms that the NTC wants to push in 2009. The national regulator also hopes to press ahead with awards of third-generation mobile licences and passage of regulations to govern Wi-Max broadband wireless internet systems.

NTC chairman Gen Choochart Promprasit said MNP would directly benefit the public who could change network operators without the need to change their mobile numbers.

He acknowledged that a number of issues remained to be worked out, including the creation of a clearing house to route calling traffic between different networks, transfer fees to be charged for changes in a customer's billing operator and a timeframe for local mobile operators to implement the change.

"But number portability will also depend on the private sector as well. Unfortunately, it seems the momentum for the idea has faded," Gen Choochart said, adding that numerous discussions between the NTC and private operators on the programme had met with few results to date.

One reason behind the inertia behind the concept may rest with the peculiarities of the Thai mobile market.

Up to 90% of the numbers in use are owned by pre-paid customers, who are willing to sacrifice the convenience of a single, unchanging number for flexibility in payments. Pre-paid customers are also much more price-sensitive and ready to switch camps to take advantage of lower rates even if it means they have to change their numbers.

Post-paid customers, meanwhile, make up the top end of the market, and typically spend more than double that of pre-paid customers on a monthly basis. Post-paid clients, which include corporate users, professionals and middle- to upper-income consumers, are also more loyal to the brands. Local phone companies have spent large sums on strengthening their customer relationship management systems and premium service offerings to retain the loyalty of post-paid clients.

Given the market structure dominated so overwhelmingly by pre-paid users, MNP makes little financial sense. Purchasing a new SIM card with a new number may very well be cheaper than paying an MNP charge for the right to continue using a number after changing operators.

"Right now, we have some 300 million mobile phone numbers, which is more than sufficient to cover demand in the near future," Gen Choochart said.

"MNP will involve an investment cost, whether it be in the clearing house itself or switching systems for each operator. The concern is whether it will be worth it or whether the demand actually exists in the market."

For Advanced Info Service, the country's mobile leader, MNP is certainly not high on the list of its priorities for 2009.

"AIS doesn't really have any need for MNP. But if it's a regulatory policy, then we will comply," said AIS president Wichien Mektrakarn.

AIS and other operators already try to facilitate changes in mobile-phone numbers by sending out mass SMS messages to a user's phonebook alerting of the change of numbers.

In any case, the private operators and the NTC will have a relatively wide gap to bridge before MNP materialises.

For one, the NTC wants to the transfer fee customers who wish to change operators have to pay to be at 100 baht, whereas the operators want the actual cost to be used as the basis for the fee.

The NTC also wants a service standard of three days to be applied for the transfer of a number from one operator to another, compared with five days requested by the phone companies.

As for the clearing house, investment costs are projected at $15 million to $20 million, with each operator expected to contribute based on the size of its customer base.

Additional expenses will be required for each company's own IT and network systems. AIS estimates implementing MNP would cost it a minimum of $12 million, with DTAC projecting a cost of $7 million and True Move $6 million.