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."

Comments

Similar in the UK

[Space cowboy]

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.

Re:Similar in the UK

[weave]

The difference in the U.S. is number portability extends to landline phones too. So I can move my home phone number to my mobile phone and disconnect forever my landline. This is why the RBOCs (landline providers) are fighting this so hard.

The only reason the US can get away with this is because the owner of the phone pays for both incoming and outgoing calls. It doesn't cost the caller anything extra to call a mobile phone.

Only in Hong Kong

[Pingular]

can schoolchildren type 70wpm with their thumbs.

Every Company Seeks a monopoly

[Crashmarik]

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.

Re:Every Company Seeks a monopoly

[blmatthews]

Originally bonsai *were* naturally occuring phenomena, it's only after all the stunted trees growing on rocks in the mountains were found and removed that people started shaping their own bonsai.

I agree with your main points though.

Oh God No!

[Quasar1999]

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...

We Need the Phones Changed

[MBCook]

We need the phones changed and I suspect that it will happen soon with number portability going into effect.

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.

That's great

[ThisIsFred]

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.

My experience from Sweden

[Anonymous Coward]

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.

Not the only problem

[mauriceh]

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..

Re:Not the only problem

[Nogami_Saeko]

I had a fun one with Nokia:

I had purchased an unlocked 8290 (brand new) over the net. Great little phone, I really liked it, but the problem was that some brain-surgeon at Nokia had decided that to "assist" operators, the phone would auto-lock itself to the first SIM that was inserted into it.

Never mind that when you buy the phone it was unlocked and would accept any carrier's SIM, but afterwards it locked and you were stuck.

Needless to say, I was mad. Phoned Nokia, who said "We can't generate an unlock code for the phone, call your provider". Called the provider "We don't carry that model, so we can't generate a code.". Argh. Of course it was especially annoying that obviously Nokia COULD help me, but they chose not to. Soured me on Nokia phones something fierce.

In the end, buying a $10 cable and using a free utility off the 'net unlocked the phone in about 2 seconds. Still, it was a problem that never should've happened.

That said, I'm on a Sony Ericsson P800 now and I love it - triband, totally unlocked, all of the goodies. I'm skipping the P900 for now (as it's just an incremental upgrade), but will probably pick up the next phone/PDA offering from SE (hopefully some-time in the summer/fall of next year).

Even Worse

[Angram]

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.

Re:Not universal everywhere

[squiggleslash]

Yes, it's legal. The phone companies try to stop it, but the actual process is not, by itself, illegal. Indeed, OFTEL have in the past tried to prevent the phone companies from SP locking phones, and IIRC forced all four (though at the time only Orange and One2one (now T-Mobile) actually did) to have unlocking policies (eg have a contract for a year and then pay a small fee and the carrier will unlock the phone they sold you.)

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.

Re:Not universal everywhere

[Lord of the Wazz]

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.

I'm sorry?

[s20451]

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.

Danish experiences

[infolib]

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)

Re:Step in the right direction

[josecanuc]

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.

Message from Hong Kong

[Anonymous Coward]

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.