Nationwide MNP launches
KUALA LUMPUR: Mobile number portability (MNP), which allows mobile phone users to switch operators without the need to change their existing numbers, is finally here. Energy Water and Communications Minister Datuk Shaziman Abu Mansor is scheduled to launch MNP nationwide here this afternoon, flagging off what is expected to be an even fiercer battle in the mobile space. MNP had been on a limited live trial in the Klang Valley from Aug 29 (for prepaid users) and from Sept 15 (for postpaid users).
The extent of the impact from MNP is still unknown at present, given that each of the four service providers — Celcom (Malaysia) Bhd, DiGi.Com Bhd, Maxis Communications Bhd and U-Mobile — could only accept up to 100 requests a day during the trial period at five designated porting locations each. Any additional porting requests were to be put on queue for the following day. There is also limited publicity allowed on the service during trials. Moreover, business customers and organisations can only port after today’s nationwide launch.
CIMB Research recently downgraded the local telecommunications sector to neutral from overweight on concern that MNP would bring about higher risk of a price war, resulting in margins and profits thinning for mobile operators.
“We believe the potent mix of MNP and the entry of newcomers U Mobile and mobile virtual network operators (MVNOs) heighten the risk of price disruption… industry revenues in Japan and Taiwan declined following the introduction of MNP, largely due to lower ARPU (average revenue per user),” CIMB said in a note dated Sept 30.
MNP is likely to inflate subscriber and retention costs, CIMB said, noting that earnings before interest, tax, depreciation and amortisation (Ebitda) margins of telcos in North Asia fell for three to four quarters by five percentage points from their “normal” run rate due to MNP.
In Singapore, MNP had left revenues intact but Ebitda margins fell 3.5 percentage points, it added. Malaysian cellular operators currently enjoy margins of between 45% and 52% versus the regional average of 35% to 40%. Still, the launch of MNP is good news for the consumer, especially during difficult times when every ringgit counts.
Service providers are allowed to charge a maximum of RM25 for each request to change the service provider. Analysts expect some service providers to absorb this fee as part of its package to attract new users
The extent of the impact from MNP is still unknown at present, given that each of the four service providers — Celcom (Malaysia) Bhd, DiGi.Com Bhd, Maxis Communications Bhd and U-Mobile — could only accept up to 100 requests a day during the trial period at five designated porting locations each. Any additional porting requests were to be put on queue for the following day. There is also limited publicity allowed on the service during trials. Moreover, business customers and organisations can only port after today’s nationwide launch.
CIMB Research recently downgraded the local telecommunications sector to neutral from overweight on concern that MNP would bring about higher risk of a price war, resulting in margins and profits thinning for mobile operators.
“We believe the potent mix of MNP and the entry of newcomers U Mobile and mobile virtual network operators (MVNOs) heighten the risk of price disruption… industry revenues in Japan and Taiwan declined following the introduction of MNP, largely due to lower ARPU (average revenue per user),” CIMB said in a note dated Sept 30.
MNP is likely to inflate subscriber and retention costs, CIMB said, noting that earnings before interest, tax, depreciation and amortisation (Ebitda) margins of telcos in North Asia fell for three to four quarters by five percentage points from their “normal” run rate due to MNP.
In Singapore, MNP had left revenues intact but Ebitda margins fell 3.5 percentage points, it added. Malaysian cellular operators currently enjoy margins of between 45% and 52% versus the regional average of 35% to 40%. Still, the launch of MNP is good news for the consumer, especially during difficult times when every ringgit counts.
Service providers are allowed to charge a maximum of RM25 for each request to change the service provider. Analysts expect some service providers to absorb this fee as part of its package to attract new users
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