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Hong Kong's Lessons on Number Portability
Dr.Hair writes "Dan Gillmor once again hits the nail on the head with his comparison of Hong Kong's competitive mobile phone market to the United States. Experiences of incumbent carriers trying to thwart competition and stifle the free market in Hong Kong should be remembered as the FCC nudges US carriers to carry out number portability. In the end competition should provide better customer service, better coverage, and better pricing in the US, all of which will eat in to carrier profits. But it also might bring the US out of the tech backwaters, where customer lock-in is the marketing strategy and "innovation" is the spin of the day."
All mobile numbers are obliged to start 07, for the sake of portability and also to let people know they're calling a mobile phone (so it'll be more expensive).
:-)
Having said that, I changed my number last time - because the new one was much easier to remember
Simon.
Physicists get Hadrons!
can schoolchildren type 70wpm with their thumbs.
When anger rises, think of the consequences.
Confucius (551 BC - 479 BC)
And its the governments job to see they don't get it. Free markets aren't a naturally occuring phenomena any more than a bonsai tree. The FCC would do very well to remember this.
If you look at the current homogenized radio market you could argue that the FCC has encouraged filesharing by ruining radio. Television the less said the better. At least, there is hope for phones and the internet.
If this is going to make the US more like Hong Kong, then God help us all! I don't want to be in a restroom stall listening to 20 other guys talking on the phone... That was ackward to say the least...
---
Programming is like sex... Make one mistake and support it the rest of your life.
Things will be interesting for a while starting tomarrow as people take advantage of this new policy, but I think soon enough we'll see the phones change to everyone's benefit.
OK, I've said that 3 times now, so what do I mean? I mean that right now my Sprint phone wouldn't work if I go to AT&Ts network or Cingular's network or someone else. They all use different systems. It's mentioned at the end of the article that that just isn't the case in Hong Kong (and I believe in Japan and Europe and other places where they have number protability). The having to get a new phone part is still going to be a little bit of a wrench in this plan, but soon enough one or two carriers will try to make it so competitors phones will work on their network and maybe we'll end up with a standard (or just 3 standards that work everywhere). When this happens, our mobile phone market will be better.
It's about time this is fixed. Imagine if the government allowed TV to develop this way. You'd either be able to watch NBC, CBS, or ABC, but not all 3 unless you had 3 TVs. And if you tried to switch, you'd have to buy a new TV. Yeesh.
Horray for number portability, it's time to let the free market decide what sucks so things can improve more.
Comment forecast: Bits of genius surrounded by a sea of mediocrity.
I'm looking forward to this, but how about equipment portability? Carriers refuse to move your ESN over from an older carrier. Since the device is "activated" with a particular carrier from the start, what's to stop it from being re-activated with a new carrier? This is costly to me, and forces me to discard an otherwise perfectly functioning mobile phone. I know there are charities that take this old equipment as a donation, but I'd have a lot more cash to donate directly if I didn't have to pay an extra $40 to $100 USD every time I switched carriers.
Fred
"A fool and his freedom are soon parted"
-RMS
We have had number portability for some time here in Sweden too. I've also changed cell phone providers a couple of times but at least to me it hasn't been the great competitive thing I hoped it to be. The phone companies just have differentiated more heavily their prices, much like insurance companies. So one is cheaper to connect a call with, another is cheaper to SMS with, yet another is cheaper for something else. To really compare prices you need to know exactly what services you use a month, exactly what time you use them AND to which numbers. This is a very hard job with an individual result, so in the end not many people compare prices at all.
At some point I hope they legislate to prevent the mobile carriers from crippling the phones they sell.
When GSM first got going in N.America I bought a Motorola triband GSM phone ( 900,1800,1900 frequencies) from a Circuit City in Minnesota.
It was sold with a VoiceStream activation package.
Of course, when I took it home to Canada I found it was "SIMM locked" to only work with VoiceStream!
After some longish and not amusing phone conversations with VoiceStream I managed to get it unlocked by reminding them that they do not have service here in Canada.
Then I took it with me this summer to Malaysia and Singapore. That is when I found it was also crippled. The only frequency it would work on was the N.American 1900 band.
When I got back I contacted VoiceStream and Motorola to ask what it would take to restore the phone to allow it so work with the frequencies it was advertised as being capable of.
The response was that as VoiceStream ordered these with only 1900 capability the rest was "turned off" in the ROM version shipped to VoiceStream.
"Can they "repair" it?"
"No."
I will pay ( even though I should not have to)
"No"
Can I return it?
"No"
Total rip-off..
Maurice W. Hilarius Voice: (778) 347-9907
What you are going to see is the mobile companies chasing after customers with lower prices. The WalMart of pricing - with the service to match. Since nobody talks about phone SERVICE, the only thing to compete on will be price.
This means we will see lower prices, worse service, worse coverage for rural areas and the big markets will be saturated with low-cost plans.
We might see some hardware consolidation - because only the really big players are going to be able to afford to stay in the game.
It's got to be easier when there are a lot of them. There are one or two guys in my hallway (I'm a college student living in a dorm) who talk on their cell phones in the bathroom. We've only got 3 stalls, they don't do it often, and it's usually talking to a girlfriend. It's quite unnerving hearing people say "I love you," out of nowhere in the stall next to you.
GL
Here in Germany we have number portability (only mobile phones) since exactly one year and :
nobody cares.
Only a small percentage of the swappers
take their number with them.
This is partly blamed to the high costs
around 25 Euros.
Column...
eJournal
Just an idea.
Comment forecast: Bits of genius surrounded by a sea of mediocrity.
Actually the numbers don't belong to the businesses. All numbers are handed out in North America by the North American Numbering Plan Administration in coordination with local regulatory agencies.
To allow businesses to compete on something that isn't their property is definitely ludicrous.
In Britain, all four providers use GSM. In the US there's at least four widely used standards, iDEN, GSM, IS-95 (often also known as "CDMA"), and IS-136 (or rather a bunch of slightly different standards based upon it, also known as "TDMA" or "D-AMPS") plus AMPS (the original analog service.) Only GSM and iDEN support "personal mobility" - the ability to keep your subscriber details seperate from the physical hardware you use to connect, and as there's only one iDEN operator, it's somewhat irrelevent for the latter.
Thankfully GSM is finally taking off in the US, but with IS-95 and its successors being the dominant standard for now, US subscribers will have to wait for Qualcomm to pull their finger out and support personal mobility as well before having the same portability of hardware that's standard in Europe. Unfortunately, while Qualcomm has done this for a couple of markets (notably in China), they've stalled on the issue with the US, even claiming it would be illegal to do so (because they've standardised in ESN numbers to identify subscribers, and an FCC rule bars moving an ESN from phone phone to another.) The fundamental reason is actually that the carriers do not want this.
You are not alone. This is not normal. None of this is normal.
In England you have to have your phone "unlocked" to use it on another network. The process isn't legal, but small shops will do it for about 10 quid.
This is entirely dependent on the network you use. Orange lock all of their phones, whereas Vodaphone generally don't (although a few of their recent Live! offerings have been locked). The process of unlocking the phone is completely legal in a lot of cases. I used to have a Siemens SL42e on Orange. You could unlock it by sending it to an official Siemens support centre. I also had a friend who was going travelling for a few months and wanted to be able to use foreign Pay As You Go SIM cards in his Siemens S55. He phoned up Orange and they unlocked it over the air for him. I know for a fact that Vodaphone's locked version of the Sony Ericsson T610 can be unlocked by applying an official SE firmware to it.
It's 100% legal in all cases. You own the phone, you can unlock the SP lock if you wish - there is absolutely nothing illegal about it, that's why you see it advertised in shop windows etc.
Changing the IMEI number (GSM serial number, basically) is illegal, however because this is what the CEIR blocklist for stolen phones it based upon. You can see your IMEI on a GSM handset by ptying *#06#
I couldn't possibly disagree more with your post. Firstly, the one thing that unites just about every civilization since Sumeria is a free market. The practice of barter is just about the most ancient one in human history.
Secondly, I would argue that the FCC contributes to a poor market in this case, by shutting out all but a few players. These companies have licenses which amount to an effective monopoly over a segment of bandwidth. They have little incentive to be good to their customers, since the range of competition is also limited and like-minded.
Ironically, the reason why the FCC exists is to allocate interference-free frequecy bands, but the most advanced communication methods in use (i.e., spread spectrum) are expressly designed to tolerate interference. Perhaps the FCC has outlived its usefulness.
Toronto-area transit rider? Rate your ride.
In Denmark we've had number portability for several years. My current cell number has been through 3 different providers. IMO it's been a huge benefit to competition. For instance, I recently switched provider during a price battle that cut my phone bill in half. (My old one followed through most of the way, but they'd never have done it without number portability) They are obliged to extend number portability to work between cell and fixed line phones this april which I'm not so sure is a good idea - I like to know where I' calling because of pricing.
Best current rates in Denmark are about 10c/min, SMS's are 3-4c apiece with no subscription. Some expect the price to fall even lower within the next year. The government agency on IT and Communication runs a helpful price guide to internet and phone providers. Of course all the providers interoperate, so you can just switch sim cards to switch provider and you can call and SMS anyone.
Several providers offer subsidized phones that can be very cheap, but they're not allowed to simlock it to their network for longer than 6 months. It's not illegal to have the simlock prematurely unlocked and it is offered publicly for 15-20 Euro. (You might get better rates elsewhere). Your contract will however be enforceable, so you'll pay subscription fees. I used this possibility recently to use my phone with a german provider during my stay there. (It's illegal in Germany though - I sent my phone from Germany to Denmark to have it unlocked - go call the police)
Any sufficiently advanced libertarian utopia is indistinguishable from government.
On paper, yes, capitalism works. In reality, however, capitalism is often times the practice of analyzing your competition to discover how you can offer the same or similar [sub-par] service or goods with only a slightly shinier silver lining. Clever marketing has been capitalism's greatest acheivement thus far, recently trumping free market (eg, wireless annual contracts: "Stay with us for 1+ year(s) on pain of an early termination fee and we'll give you fluff in return"). Most companies would never settle for less profit unless it is the very last option left on table, even after trimming the fat around the office. The US wireless market is a prime example of this. Apart from fancy new phones with near useless features, when is the last time there was major innovation in the US wireless marketplace? As far as I can tell, the dead zones have increased, reception has not improved, and, quite frequently, conversations still closely resemble arguments with the Jack in the Box drive thru speaker.
...an opinion, anyway.
What you are talking about has a different name - Idealism - and unfortunately it only works on imaginary paper.
It goes from God, to Jerry, to me.
I don't see what this has to do with monopolies. Number portability does decrease the switching costs of consumers, but it doesn't give any company more of an advantage or disadvantage, and it's not going to change the number of companies on the market because it's regulated by the FCC.
Many economists would argue that the only true monopolies are those granted by the government - gas companies, local phone companies, cable companies, ect.
The interesting thing is that one of the most innovative and profitable cell phone companies developed in spite of, not because of government regulation. I'm talking about NexTel. They wanted to start a cell phone company, but couldn't get a frequency, so they bought a bunch of shortwave radio licenses held by taxi companies, messanger services, ect. The FCC said they had to include the radio feature on their phones, so they introduced Direct Connect push to talk service, and it's made them a ton of money.
I have blog like everyone else
The American cellular telephone market has evolved differently than the rest of the world. In Europe and Japan, you (gerneally, there are exceptions) go buy a nice phone or a cheap phone; whatever has what you need. You can expect to pay from $50 to over $500 for a phone, depending on the features you want.
;-)
Compare it to buyinga PDA or a laptop computer.
Then, you went and picked a phone plan you want and they gave you the account information in a SIM card, which you put in whatever phone you got and you're off to the races.
But in the US, phone prices were deemed too high to make good inroads, so providers subsidised the cost of the phones. So you buy your service and it comes with a "free" phone, or a "$30" phone.
When someone's phone breaks, they take it in and find that to get a new phone, they will have to pay over $100 for essentially the same model phone. Outrage ensues!
Of course, the subsidising didn't work out exactly well because people got unhappy with some aspect of the service and left for another company. That's where the 1- and 2-year contracts started coming in, so the providers could recoup the costs of subsidising the phone.
In the mean-time, US cellular phone customers have come to believe that cell phones truely cost around $30-$50 and balk at paying what amounts to actual retail price for one. It doesn't help that many of these cell phones look and feel like $30 pieces of electronics rather than the $180+ pieces of highly engineered hardware that they really are.
These people have such an bizzare facility with language that it would make Orwell's Big Brother blush. "Innovation" is NewSpeak for thwarting innovation, and "competition" means eliminating all competitors.
"When I use a word, it means just what I choose it to mean - neither more nor less" - Humpty Dumpty - Through the Looking Glass
"How perfectly Goddamn delightful it all is, to be sure" Charles Crumb
Prostitution has a long history but it's not correct to therefore claim that every civilization is united by an appreciation of sexuality. Barter took place in Stalinist Russia, but did not constitute a free market. In addition to producers and consumers, a free market requires barriers to competition that are low; this will virtually never occur in the absence of both government oversight and a liquid monetary system, neither of which is required for barter.
- First they ignore you, then they laugh at you, then ???, then profit.
Here in Germany, we traditionally have different "area codes" assigned to the different providers. That is, by looking at the area code, you know which provider the mobile is on. This was a good thing, since the cost of calling a mobile depends on the provider (e.g. I refuse to call an O2 mobile before 8 p.m., it's too expensive). With the advent of number portability, this association could get lost. It hasn't yet, since nobody uses it, but the possibility is there. How will I know how expensive my call is going to be?
Ok, compare to Australia then...
We've had number portability for a couple of years now...and I don't think you'll find many countries much less densly populated.
Advanced users are users too!
Apparently there will come a time in the US where you can switch your landline phone number to a cellular phone and vice versa.
They're not there yet. I was able to retain my landline phone number when switching providers (BellSouth to Birch). However just moving down the road required a totally new phone number - with the same phone company. Makes no sense to me, because the cell phone companies and now the VoIP phone companies can give you a number in any area when you set up or move service. Especially intriguing is the offer from iconnecthere.com to give subscribers a choice of international numbers (presently UK and Israel) that a person in the USA could have on their VoIP phone. It means that theoretically my UK family could call me for pennies at the weekend!
However, this doesn't mean people will suddenly get multiple phone numbers so that Auntie Flo can call them on the cheap. Rather, it is nationwide calling plans on landlines which will capture that market - services like former Worldcoms' Neighborhood - $50/mo and unmetered across whole USA. Speaking on nationwide calling plans it's about time European telecom operators got together to offer "unmetered" calls across Europe for a single monthly service fee. Oh, and to have a Euro plan where standard minutes are used rather than the expensive ones presently charged.
Mark.
"When portability went into effect in 1999, about 45 percent of the local population had mobile phones. Today it's north of 99 percent, says Kwan, and portability is one reason."
Wow, that means the telecoms stand ready in the hospital when a new citizen is born. Fierce competition indeed!
Remarkable I have not seen any comments from Hong Kong. I happen to live there for 1 1/2 years now, and of course I have my mobile phone.
So far I have once switched providers - an easy and painless issue. It cost me like $20 admin cost (1USD=7.8HKD, so that is abt USD2.5), and three days later it was ported over.
On calling cost: that is indeed truly low. I pay $89 (abt USD12) a month for 500 mins airtime (calling and being called), including call forwarding (press when being called on the mobile, and answer on the land line: no airtime paybable!), voicemail, SMS services, etc.
Calling landline to landline is free. Calling landline to mobile is free (mobile pays airtime only).
Calling cost are so low, many providers do not send you a paper invoice (costs $10 (just over USD1) service cost), only SMS and e-mail invoice.
Don't forget Hong Kongs 7mln people live on an area only 30x50 km in size, of which a large part is water. The high buildings are the largest problem for the networks: reflections. Buidling a country wide network is therefor easy and cheap. Networks are good and reliable, also high in the mountain (up to 990m high it goes here!) you have network.
Oh and for price comparison: though life is expensive, and Hong Kong has a name of being an expensive place to live, that is only housing. Everything else is cheap here.
Wouter.
The new number portability provision will help a lot, but it only eliminates one form of lock-in, one based on the social norms where users become reliant on their current phone number.
Another form of lock-in, one based on economic norms, is the penalty to be payed when switching away from a wireless provider before your service term is up,which we all are bound to by contract.
Most people I know hate switching not because they have to switch numbers, but because they have to pay a stepp $200+ fine for ending a service contract prematurely.
I don't think number portability will have as huge an effect for competition as they say they will. It will help consumers switch when their contracts are done, but because we are bound by contracts with such steep penalties, most people will remain locked into their poor performing carriers.