speed, while achieving a draw with U Mobile for 3G latency. Celcom, says the app’s report, performed the worst in speed, coverage and latency at the national level.

The mobile network operators may be locked in combat but Esther does not feel like a winner. She wants to switch telcos not because there is a better alternative, but because she is disillusioned with her current network provider.

“I’m considering it because my telco isn’t watching out for its existing customer base,” she says.

Deal or no deal?Long-standing customers are not the only ones feeling the brunt of their telcos’ aggressive courtship of new subscribers. New customers are also left uncertain if they have just gotten the best deal, and for how long.

As prices are slashed and promotions rolled out, Harsh observes that “customers have become more dissatisfied”.

“Due to the stiff competition, prices contin-uously fluctuate. The customer is left with a bad taste in the mouth when something innovative or cost-effective comes up just days or weeks after he has moved to a new operator,” explains Harsh.

In April, Maxis topped up the data juice of its MaxisONE and SurfMore50 plans by up to 5GB following the backlash it received. Soon after, U Mobile showered its Hero P70 subscribers with an extra 8GB, but only until the end of this year. Celcom officially launched its Celcom First Platinum plan that comes with an 18GB internet quota at RM150 monthly. A

day later, Maxis rolls out a 20GB data plan for RM188, closely followed by DiGi

upgrading its RM238 data plan from 20GB to 30GB.

The wrestle for subscribers will get fiercer yet as more heavyweights are expected to enter the ring. One of them is “webe”, a 4G LTE mobile

ISSUE 133 | MAY 21-27, 2016 | PP18224/07/2013 (033550) 01

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Caught in a clash of titansOur telcos are fighting tooth and nail to win subscribers, but the price war does not always mean a windfall for consumers

THE biggest winners in a price war are usually the consumers. This certainly seems to be the case in the local mobile network industry, where

telecommunications companies (telcos) like Maxis, DiGi, Celcom and U Mobile are trying to outdo one another with upgrades and freebies to woo subscribers.

“Being a prepaid dominant market, cus-tomers (in Malaysia) are free to move to the (telco) that offers them maximum benefits at the lowest price,” says Harsh Upadhyay, the author of a 2015 report on the Malaysian telco sector for consulting and research firm Analysys Mason. Prepaid makes up 80% of the 45 million mobile subscriptions in the country.

He adds that telco brand loyalty among people is low, which makes the competition among the Big Four network providers even more intense. A reckoning awaits companies that get on the wrong side of the customers.

Case in point: Maxis. According to its quarterly report, the telco has lost one million subscribers since July 2015, and was dethroned by DiGi earlier this year as the network operator with the largest subscriber base. A portion of the outflow resulted from the recent fiasco surrounding Maxis’ higher pricing and selective upgrade of data for certain consumers. The telco’s Facebook page is bombarded with users complaining that they have been excluded from the data quota upgrade, even though they have been loyal users.

Maxis did not respond to Focusweek’s request for comments.

To switch or not to switchA 28-year-old Maxis subscriber, who only wants to be known as Esther, is keen to join the exodus. 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 value long-standing subscribers” is eroding her loyalty.

Unfortunately for Esther, shopping for the best alternative turns out to be a complicated process of weighing one important need against another. Other telcos do offer cheaper plans but the savings come at a cost. One network has spotty signal strength in her Subang Jaya home. Another telco’s data speed lags behind her current network.

The lowest price is also not necessarily a smarter choice. Despite the controversies surrounding Maxis’ higher charges, its services are rated top of their class.

According to Open Signal, an app that monitors coverage and performance of mobile operators, Maxis beats Celcom, DiGi and U Mobile in terms of 4G coverage and overall download speed. It is in a three-way-tie with U Mobile and DiGi in 4G latency and download

Due to the stiff competition, prices continuously fluctuate. The customer is left with a bad taste in the mouth when something innovative or cost-effective comes up just days or weeks after he has moved to a new operator.”– Harsh Upadhyay

Telecommunications providers in the country are constantly trying to outdo one another with competitive pricing and attractive packages

Harsh Upadhyay, the author of a 2015 report on the Malaysian telco sector for consulting and research firm Analysys Mason

by FOONG LI MEI

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FocusW | May 21-27, 20160202

ISSUES

are so excited about the devices that they forget to look at the details of the contract,” explains Ahmad in an interview with Focusweek.

NCCC legal and policy executive Mandeep Singh, however, notes that some find it challeng-ing to fully understand the mobile plan contract.

“Consumers have reported that they are not given enough time to examine the long docu-ment, and are told to sign on the spot. They are not allowed to take it home to read through,” says Mandeep, whose role includes reviewing and handling complaints from telco users.

Ahmad notes that most telcos comply with the General Consumer Code of Practice for the Communications and Multimedia Industry Malaysia (GCC) as it is “part of the licensing conditions”. GCC is recognised as the standard for safeguarding consumers’ interests.

Some, though, try to bend the rules. Last year, CFM identified six cases of misleading advertisements – all of which Ahmad says have been resolved.

Mandeep agrees that telcos are cooperative when he mediates consumer complaints with them.

This begs the question – if the network providers are so eager to iron out grievances, why do the complainants approach CFM and NCCC in the first place? Both CFM and NCCC only address complaints still unresolved even after being brought to the network providers’ attention.

One reason may be that some customer ser-vice agents lack expertise to handle complaints, suggests Mandeep. He also points out that some

customers seek NCCC’s help as they are tired of their grievances being bounced

around different departments in the telco with no resolution in sight.

Will competitors team up?The clash of industry titans will rage on for some time, but is expected to cool off in the long run, according to Harsh.

“Even the disruptive and new operators need to

service by Telekom Malaysia Bhd and Packet One Networks (P1). A state-owned telco from China is reportedly eyeing a slice of the Malay-sian pie too.

Vying for consumers’ wallets is a costly race. Net profits of the Big Three – Celcom, Maxis and DiGi – were below analysts’ expectations last year.

“The stiff competition is one of the key reasons for (telcos’ lacklustre financial) perfor-mance. Subscriber acquisition and retention cost in such a competitive environment are high,” says Harsh.

Despite the pressure on profits, he observes, telcos are striving to stay ahead by “investing a lot to improve quality of service, network and customer experience”.

Jeffrey Tan, the Asean telecoms analyst for RHB Research Institute, notes that local telcos have pumped in funds to maintain network quality in anticipation of a surge in data usage. He believes that “end-user experience will ultimately prevail” amidst the competition.

Harsh agrees. “Promotional and customer acquisition activities help the customer get improved services at the same price. Consumers will leverage the most out of this competition.”

Rise of unhappy usersNot everyone will agree that they are getting “improved services”, judging by the flood of user grouses posted on the mobile network giants’ social media sites. Consumer complaints organisations have also recorded a surge in grievances concerning telcos.

Cellular phone service makes up almost half the 7,326 disputes received by the Commu-nications and Multimedia Consumer Forum of Malaysia (CFM) last year, making it the service with the most complaints for the third consecutive year.

Billing disputes seem to be the biggest pain point for cellular phone services in 2015; the number of complaints in this area has jumped 345% to 1,296 cases within one year. This is followed by poor services at 854 cases last year – a category which encompasses service disruption, poor customer service, mobile number portability and so on.

Other top complaints include poor coverage and unsolicited SMSes.

The National Consumer Complaints Centre (NCCC) has similar bad news – telco services were among the top three categories of com-plaints received for the past five years.

Earlier this year, DiGi Telecommunications Sdn Bhd, Celcom Axiata Bhd and Tune Talk Sdn Bhd were penalised for non-compliance with the mandatory standard for quality service and false registration of prepaid SIM cards.

Telcos are not always the only guilty party, though. Both CFM and NCCC acknowledge that some of the disputes stemmed from consumers’ own negligence in reading the terms and conditions of their mobile plans.

CFM director Ahmad Izham Khairuddin cites the example of a common complaint on hidden charges.

“When we look into complaints of ‘hidden charges’, we find that it is rarely the case. Most con-sumers fail to read the terms and conditions in detail. This is quite common, especially for telecommunications. As the network packages are often bundled with new phones, the consumers

sustain profits in the long run, and hence need to achieve a common platform,” he says.

Both Harsh and Tan do not rule out the pos-sibility of mobile network companies joining forces via merging and acquisition exercises in the future.

This may result in only a handful of compa-nies controlling the lion’s share of the market. Cambodia has seen this happen. The kingdom had nine licensed operators in 2011. By 2015, there were six, three of which control 95% of the subscriber base.

It’s unclear if this is bad news for consumers.“Telcos merge or acquire to improve their

market position, make better investments, (and) improve infrastructure… which even-tually helps them become profitable in a competitive market. Despite fewer players, consumer benefits are not hindered. In fact, the consumers are expected to derive more benefits due to improved quality of service,” explains Harsh.

One example is the merger between Aircel and Reliance Communications in India, which Harsh expects will help the companies to “improve their network and reduce debt”.

Cost-sharing is among the reasons driving Europe’s top policy makers to push for looser restrictions on telco mergers. Due to the intense competition, Europeans have some of the cheapest mobile services in the world, but they have long been plagued by poor service.

Other regulators, however, take a tough stance against the deal spree among European telcos. They argue that the reduced competition may lead to shrinking incentives to innovate and higher bills for consumers.

In Malaysia, however, regulatory bodies are less likely to intervene in the industry. CFM believes that this is for the best.

“We want the industry to self-regulate, and this is actually in line with the spirit of the Communications and Multimedia Act 1998,” Ahmad says.

He explains that while the government can draw up new codes, laws and mandatory standards, it is a cumbersome process that may hold back the fast-evolving industry. He believes that companies should be allowed to make their own business decisions. At the same time, non-mandatory best practices will still be adopted by those wanting to stay as the top choice for subscribers.

For instance, he points out, CFM is working with telcos to release a standardised Critical Information Summary (CIS) for their products and services to improve transparency. The CIS will enable consumers to find out pertinent details about mobile packages at a glance, such as what they are paying for, the minimum monthly commitment, and other terms. CFM expects the CIS to be available to consumers before the end of the year.

Consumers may not always be the biggest winner in a price war, but they can ensure that their rights are protected.

To streamline the process of seeking redress for disputes with telcos, CFM recently launched My Mobile Rights, a new app that works as a one-stop complaint submission platform.

Gone are the days when a consumer has to complain to the service providers, wait for a resolution, and then approach CFM if the problem persists. With the app, CFM gets a copy of every complaint sent to the service provider. The forum can then monitor if the company addresses the complaint, and take further actions when it does not.

Ahmad points out that people often take their anger to social media when they are dis-satisfied with their telco services, but that may not be the solution. Bringing their unresolved disputes to mediating parties like CFM is more productive. The forum reports that last year, it resolved seven out of 10 complaints within 15 days of receiving them.

“CFM exists to benefit the public. You can complain, sure, but add value to your actions by bringing the matter to us,” he reasons.

AMIDST the dizzying array of mobile deals in the market, how can consumers make the best choices? Ahmad Izham Khairuddin, director of Communications and Multimedia Consumer Forum of Malaysia (CFM), offers some advice:

Step 1: Forget about prices first. Find out which telco has strong coverage in your home, workplace or anywhere else you use your phone most. Apps like “Open Signal” are useful in checking telcos’ coverage.

Step 2: Once you have settled on a telco, compare the packages it offers – not just by price, but by the terms and conditions too.

Step 3: Before signing up, make sure you know whether the plan is tied to a contract, as well as its terms and duration.

To win in a price war, know your needs

Striving to stay ahead of the competition

CFM director Ahmad Izham Khairuddin

Long-standing customers are not the only ones feeling the brunt of competitive pricings; new customers are also left uncertain if they have just gotten the best deal, and for how long

SHARIL AMIN ABDUL RAHIM/FocusW

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