China is to start mobile phone number portability trials in Tianjin and Shenzhen next month, according to the Ministry of Industry and Information Technology, the country's top telecommunications regulator.

Mobile phone numbers, except for TD-SCDMA numbers starting with 157, will be portable for users in the two cities. According to the plan, China Mobile's users can transfer to China Unicom or China Telecom (with acquired CDMA network) and keep their numbers. However, China Unicom and China Telecom's users will not be allowed to transfer to China Mobile.

The new policy, which has also been launched in the other countries such as the United States and South Korea, will change China's telecommunications market structure after the industry revamp, experts said.

In the industry vocabulary, it's called one-way or asymmetric mobile number portability (MNP). That means users will be able to keep their original phone numbers when they want to change to another telecommunications network or operator.

"We believe these asymmetric regulations would assist the small mobile operators like China Telecom to compete better against China Mobile. Nevertheless, in the short term in the current 2G market their impact is likely to be limited given China Mobile's good network quality and successful marketing strategy," said research firm Ovum in a note.

The monopoly position of China Mobile in the telecom industry is highly sensitive to industrial policies. In the next one or two years, regulation policies might change to ensure the market is competitive, according to CCID Consulting, a Beijing-based research arm authorized by the ministry.

If the trials are successful, portability is to become a nationwide policy in 2009.

Mobile communications rapid development is still the major impetus of China's telecom growth in the first half of 2008, with income rising 15.9 percent year-on-year and a market share of 53.6 percent. Meanwhile, the shares of fixed network local call connection and long distance call continue to decrease, according to CCID.

China Mobile, the world's largest carrier by subscribers, keeps its dominant situation. By the end of June, China Mobile's users had increased by 45.25 million, with the total number of users reaching 414.6 million.

China Unicom had 7.035 million new users, with total number of users reaching 127.6 million.

The number of users and profit gap between the two major mobile operators enlarged while the fixed-line phone user base dropped in the first half.

"Even after telecom reorganization, the new combined carriers nearly have similar asset scale, but their distance in business development continues to enlarge," CCID said in a note.

Generally speaking, the new policy is unfavorable for strong telecommunications operators but the effect is uncertain, according to overseas experiences.

In Japan, the MNP started in October 2006 and the market leader NTT DoCoMo's market share dropped to less than 50 percent in 2008 from 56 percent two years ago. The policy made the market more balanced, benefiting smaller rivals KDDI and Softbank.

In South Korea, leader SK Telecom's market share decreased by almost three percentage points in the six months from January 2001, when the country started its one-way MNP. The policy also encouraged SK Telecom to improve services and provide more attractive packages.

So what can consumers expect from the new policy?

More reasonable packages and eye-catching models at zero price and long-period contracts must be on the list.

(Shanghai Daily September 26, 2008)