CURRENT AFFAIRS FOR ENTREPRENEURS www.focusweek.my | facebook.com/focusweek88 | twitter.com/focusweek88 ISSUE 133 | MAY 21-27, 2016 | PP18224/07/2013 (033550) 01

To switch or not to switch Telecommunications providers in the country are constantly trying to outdo one another with A 28-year-old Maxis subscriber, who only wants competitive pricing and attractive packages to be known as Esther, is keen to join the exodus. Caught in a The lecturer tells Focusweek that she is happy with the quality of her current network, but the telco’s “non-transparent packages which do not speed, while achieving a draw with value long-standing subscribers” is eroding her for latency. , says the app’s report, loyalty. performed the worst in speed, coverage and clash of titans Unfortunately for Esther, shopping for the latency at the national level. best alternative turns out to be a complicated The mobile network operators may be Our telcos are fighting tooth and nail to win process of weighing one important need against locked in combat but Esther does not feel like a subscribers, but the price war does not always another. Other telcos do offer cheaper plans winner. She wants to switch telcos not because but the savings come at a cost. One network there is a better alternative, but because she is mean a windfall for consumers has spotty signal strength in her Subang Jaya disillusioned with her current network provider. home. Another telco’s data speed lags behind “I’m considering it because my telco isn’t her current network. watching out for its existing customer base,” HE biggest winners in a price war The lowest price is also not necessarily she says. are usually the consumers. This a smarter choice. Despite the controversies certainly seems to be the case in the surrounding Maxis’ higher charges, its services Deal or no deal? local mobile network industry, where are rated top of their class. Long-standing customers are not the only ones Ttelecommunications companies (telcos) like According to Open Signal, an app that feeling the brunt of their telcos’ aggressive Maxis, DiGi, Celcom and U Mobile are trying to monitors coverage and performance of mobile courtship of new subscribers. New customers outdo one another with upgrades and freebies operators, Maxis beats Celcom, DiGi and U are also left uncertain if they have just gotten to woo subscribers. by FOONG LI MEI Mobile in terms of coverage and overall the best deal, and for how long. “Being a prepaid dominant market, cus- download speed. It is in a three-way-tie with U As prices are slashed and promotions rolled tomers (in ) are free to move to the Mobile and DiGi in 4G latency and download out, Harsh observes that “customers have (telco) that offers them maximum benefits at become more dissatisfied”. the lowest price,” says Harsh Upadhyay, the “Due to the stiff competition, prices contin- author of a 2015 report on the Malaysian telco uously fluctuate. The customer is left with a bad sector for consulting and research firm Analysys taste in the mouth when something innovative Mason. Prepaid makes up 80% of the 45 million Due to the stiff competition, or cost-effective comes up just days or weeks mobile subscriptions in the country. prices continuously after he has moved to a new operator,” explains He adds that telco brand loyalty among Harsh. people is low, which makes the competition fluctuate. The customer In April, Maxis topped up the data juice among the Big Four network providers even is left with a bad taste in of its MaxisONE and SurfMore50 plans by more intense. A reckoning awaits companies up to 5GB following the backlash it received. that get on the wrong side of the customers. the mouth when something Soon after, U Mobile showered its Hero P70 Case in point: Maxis. According to its innovative or cost-effective subscribers with an extra 8GB, but only until quarterly report, the telco has lost one million comes up just days or weeks the end of this year. Celcom officially launched subscribers since July 2015, and was dethroned its Celcom First Platinum plan that comes with by DiGi earlier this year as the network operator after he has moved to a an 18GB internet quota at RM150 monthly. A with the largest subscriber base. A portion of new operator.” day later, Maxis rolls out a 20GB data plan the outflow resulted from the recent fiasco – Harsh Upadhyay for RM188, closely followed by DiGi surrounding Maxis’ higher pricing and selective upgrading its RM238 data plan from upgrade of data for certain consumers. The 20GB to 30GB. telco’s Facebook page is bombarded with users Harsh Upadhyay, the author The wrestle for subscribers complaining that they have been excluded from of a 2015 report on the will get fiercer yet as more the data quota upgrade, even though they have Malaysian telco sector for heavyweights are expected consulting and research firm been loyal users. Analysys Mason to enter the ring. One of them Maxis did not respond to Focusweek’s is “webe”, a 4G LTE mobile request for comments.  Continues next page 02 FocusW | May 21-27, 2016 ISSUES

ANWAR FAIZ AHMAD TAJUDIN/FocusW sustain profits in the long run, and hence need Striving to stay to achieve a common platform,” he says. Both Harsh and Tan do not rule out the pos- sibility of mobile network companies joining ahead of the forces via merging and acquisition exercises in the future. This may result in only a handful of compa- competition nies controlling the lion’s share of the market. has seen this happen. The kingdom had nine licensed operators in 2011. By 2015, there were six, three of which control 95% of  From previous page the subscriber base. service by Bhd and Packet It’s unclear if this is bad news for consumers. One Networks (P1). A state-owned telco from “Telcos merge or acquire to improve their China is reportedly eyeing a slice of the Malay- Long-standing customers are not the only ones feeling market position, make better investments, sian pie too. the brunt of competitive pricings; new customers are (and) improve infrastructure… which even- Vying for consumers’ wallets is a costly race. also left uncertain if they have just gotten the best deal, tually helps them become profitable in a and for how long Net profits of the Big Three – Celcom, Maxis competitive market. Despite fewer players, and DiGi – were below analysts’ expectations consumer benefits are not hindered. In fact, last year. the consumers are expected to derive more “The stiff competition is one of the key benefits due to improved quality of service,” reasons for (telcos’ lacklustre financial) perfor- explains Harsh. mance. Subscriber acquisition and retention To win in a price war, One example is the merger between cost in such a competitive environment are Aircel and Reliance Communications in high,” says Harsh. know your needs India, which Harsh expects will help the Despite the pressure on profits, he observes, companies to “improve their network and telcos are striving to stay ahead by “investing a reduce debt”. lot to improve quality of service, network and AMIDST the dizzying array of mobile deals in the market, Cost-sharing is among the reasons driving customer experience”. how can consumers make the best choices? Ahmad Izham Europe’s top policy makers to push for looser Jeffrey Tan, the Asean telecoms analyst for Khairuddin, director of Communications and Multimedia restrictions on telco mergers. Due to the intense RHB Research Institute, notes that local telcos Consumer Forum of Malaysia (CFM), offers some advice: competition, Europeans have some of the have pumped in funds to maintain network Step 1: Forget about prices first. Find out which telco has cheapest mobile services in the world, but they quality in anticipation of a surge in data usage. strong coverage in your home, workplace or anywhere else have long been plagued by poor service. He believes that “end-user experience will you use your phone most. Apps like “Open Signal” are useful Other regulators, however, take a tough ultimately prevail” amidst the competition. in checking telcos’ coverage. stance against the deal spree among European Harsh agrees. “Promotional and customer Step 2: Once you have settled on a telco, compare the telcos. They argue that the reduced competition acquisition activities help the customer get packages it offers – not just by price, but by the terms and may lead to shrinking incentives to innovate improved services at the same price. Consumers conditions too. and higher bills for consumers. will leverage the most out of this competition.” Step 3: Before signing up, make sure you know whether the In Malaysia, however, regulatory bodies are plan is tied to a contract, as well as its terms and duration. less likely to intervene in the industry. CFM Rise of unhappy users believes that this is for the best. Not everyone will agree that they are getting “We want the industry to self-regulate, “improved services”, judging by the flood of user and this is actually in line with the spirit of the grouses posted on the mobile network giants’ are so excited about the devices that they forget Communications and Multimedia Act 1998,” social media sites. Consumer complaints to look at the details of the contract,” explains Ahmad says. organisations have also recorded a surge in Ahmad in an interview with Focusweek. He explains that while the government grievances concerning telcos. NCCC legal and policy executive Mandeep can draw up new codes, laws and mandatory Cellular phone service makes up almost Singh, however, notes that some find it challeng- standards, it is a cumbersome process that half the 7,326 disputes received by the Commu- ing to fully understand the mobile plan contract. may hold back the fast-evolving industry. He nications and Multimedia Consumer Forum “Consumers have reported that they are not believes that companies should be allowed of Malaysia (CFM) last year, making it the given enough time to examine the long docu- to make their own business decisions. At the service with the most complaints for the third ment, and are told to sign on the spot. They are same time, non-mandatory best practices will consecutive year. not allowed to take it home to read through,” still be adopted by those wanting to stay as the Billing disputes seem to be the biggest pain says Mandeep, whose role includes reviewing top choice for subscribers. point for cellular phone services in 2015; the and handling complaints from telco users. For instance, he points out, CFM is working number of complaints in this area has jumped Ahmad notes that most telcos comply with with telcos to release a standardised Critical 345% to 1,296 cases within one year. This is the General Consumer Code of Practice for the Information Summary (CIS) for their products followed by poor services at 854 cases last Communications and Multimedia Industry and services to improve transparency. The CIS year – a category which encompasses service Malaysia (GCC) as it is “part of the licensing will enable consumers to find out pertinent disruption, poor customer service, mobile conditions”. GCC is recognised as the standard details about mobile packages at a glance, number portability and so on. for safeguarding consumers’ interests. such as what they are paying for, the minimum Other top complaints include poor coverage Some, though, try to bend the rules. Last monthly commitment, and other terms. CFM and unsolicited SMSes. year, CFM identified six cases of misleading expects the CIS to be available to consumers The National Consumer Complaints Centre CFM director advertisements – all of which Ahmad says have before the end of the year. (NCCC) has similar bad news – telco services Ahmad Izham been resolved. Consumers may not always be the biggest were among the top three categories of com- Khairuddin Mandeep agrees that telcos are cooperative winner in a price war, but they can ensure that plaints received for the past five years. when he mediates consumer complaints with their rights are protected. Earlier this year, them. To streamline the process of seeking redress Sdn Bhd, Celcom Bhd and Sdn This begs the question – if the network for disputes with telcos, CFM recently launched Bhd were penalised for non-compliance with providers are so eager to iron out grievances, My Mobile Rights, a new app that works as a the mandatory standard for quality service and why do the complainants approach CFM and one-stop complaint submission platform. false registration of prepaid SIM cards. NCCC in the first place? Both CFM and NCCC Gone are the days when a consumer has Telcos are not always the only guilty party, only address complaints still unresolved even to complain to the service providers, wait for though. Both CFM and NCCC acknowledge after being brought to the network providers’ a resolution, and then approach CFM if the that some of the disputes stemmed from attention. problem persists. With the app, CFM gets a consumers’ own negligence in reading the One reason may be that some customer ser- copy of every complaint sent to the service terms and conditions of their mobile plans. vice agents lack expertise to handle complaints, provider. The forum can then monitor if the CFM director Ahmad Izham Khairuddin suggests Mandeep. He also points out that some company addresses the complaint, and take cites the example of a common complaint on customers seek NCCC’s help as they are tired further actions when it does not. hidden charges. of their grievances being bounced Ahmad points out that people often take “When we look into complaints around different departments in the their anger to social media when they are dis- of ‘hidden charges’, we find that telco with no resolution in sight. satisfied with their telco services, but that may it is rarely the case. Most con- not be the solution. Bringing their unresolved sumers fail to read the terms Will competitors team up? disputes to mediating parties like CFM is more and conditions in detail. This The clash of industry titans will productive. The forum reports that last year, it is quite common, especially rage on for some time, but is resolved seven out of 10 complaints within 15 for telecommunications. As expected to cool off in the long days of receiving them. the network packages are run, according to Harsh. “CFM exists to benefit the public. You can often bundled with new “Even the disruptive complain, sure, but add value to your actions phones, the consumers SHARIL AMIN ABDUL RAHIM/FocusW and new operators need to by bringing the matter to us,” he reasons.