OFTA P 023(97)
Introduction
In early 1994, the Telecommunications Authority (TA) commissioned a consultant, OVUM Limited, to conduct a feasibility and cost benefit analysis of number portability in Hong Kong. The consultant completed the study in May 1994. It was concluded that number portability for Fixed Telecommunication Network Services (FTNS) would be feasible and there would be immense net benefit to the economy of Hong Kong as a result of the introduction of number portability. Based on the recommendations made by the consultant, the TA consulted the telecommunications industry on the implementation of number portability. There was a clear consensus in the industry that number portability should be introduced for FTNS. On 3 January 1997, the TA announced that full number portability was successfully implemented for FTNS in Hong Kong. He also indicated that the Office of the Telecommunications Authority (OFTA) would conduct a study to consider the applicability and desirability of introducing number portability to mobile services.
2. This consultation paper is intended to consult the mobile industry and interested parties on whether Hong Kong should have number portability for mobile services (mobile number portability), and if so, how it could be achieved and implemented.
Mobile Number Portability in Other Countries
3. Some overseas administrations such as Europe and Australia are now studying the ways of implementing mobile number portability. In Europe, the European Commission has mandated through its Green Paper on "A Numbering Policy for Telecommunications Services in Europe" that Member States should ensure that both local loop operator portability and number portability for mobile and personal communications services should be available not later than 1 January 2000. In Australia, the implementation of mobile number portability is under active consideration as one way to assist customers to transfer to GSM and other mobile services as a result of the phasing out of AMPS on 1 January 2000.
Demand for Mobile Number Portability in Hong Kong
4. In Hong Kong, there are four Public Mobile Radiotelephone Services (PMRS) operators operating five digital and one analogue cellular mobile networks in the 800-900 MHz band. In October 1996, the TA has licensed six Personal Communications Services (PCS) operators to operate six PCS networks in the 1.7-1.8 GHz band. Three PCS operators have already launched their services in early 1997. The total number of PMRS and PCS users as of the end of May 1997 was slightly over 1.49 million. The growth rates in the year 1995 and 1996 were 59% and 76% respectively. With an estimated population of 6.42 million people in Hong Kong at the end of December 1996, the penetration of cellular services has already exceeded 23%. As a result of the subsequent launching of PCS, it is believed that the penetration would rise further as the mobile market would attract more new customers in the near future. With such a fast growing mobile customer base in Hong Kong and the choice of mobile networks available to customers, the TA believes that there would be some genuine demands and requirements from customers for mobile number portability.
Benefits of Mobile Number Portability
5. It is evident that one major hindrance for mobile customers to move to their preferred operator is that they cannot retain their mobile telephone numbers currently in use, despite the fact that they are not satisfied with the services they currently subscribe to or that other operators offer better quality of service and coverage, lower charges and better after-sale services etc. The TA is therefore of the view that the introduction of mobile number portability would remove the hindrance for mobile customers to move to their preferred operators and would further promote and encourage competition in the mobile industry.
6. In addition to the indirect benefit results from the growth in competition which it encourages, the TA also considers that there would be direct benefits to the mobile users by introducing mobile number portability. For example, mobile customers need not pay for the expenses in changing stationery, informing correspondents of their new telephone and advertising when they move from one mobile operator to another. It could be argued that there is a barrier for mobile customers to move operator because of the need to change handsets, regardless of whether portable numbers are offered. However the handset prices have dropped significantly recently due to competition. With lower-priced handsets, mobile customers would not bother too much about changing their handsets in transferring to different operators. As a matter of fact, it is not always necessary for a customer to acquire a new handset before he can use another operator's network. For example, if a customer changes from one network to another network of compatible technology, it is not necessary for him to change the handset at all. In fact, some operators offer low-priced or even free handset to new subscribers. Therefore, the handset factor should not be a major consideration by mobile customers for changing operators.
Architectural Options
7. In the study of the technical implementation of operator portability in FTNS, the TA had considered the following two architectural options -
- Call Forwarding Option - The originating network (i.e. network from which a call is originated) will not recognize and translate any ported numbers but has to pass them back to the donor network (i.e. network from which the number has been ported) which will be responsible to translate the ported numbers before the calls are routed to the recipient network (i.e. network which has gained the ported number) by means of call forwarding mechanism.
- Intelligent Network (IN) and Database Option - The originating network acts as a service switching point which interrogates a separate database, known as the "Service Control Point", to translate any ported numbers into the network addresses before the calls are routed directly to the recipient network, without having to route the calls back to the original donor network.
8. In March 1995, the TA decided that operator portability should be introduced in FTNS based on the IN and database option as the long term solution. The Call-forwarding technique could be used as an interim solution until the IN platform and the required interface standard were implemented and set up. By the end of 1996, the networks of the four FTNS operators and Hong Kong Telecom International (HKTI) were successfully implemented in accordance with the TA's requirements of routing local and incoming external calls to the ported numbers by IN and database solution. Individual operator has been responsible to set up its own off-line reference database and on-line operational database. By exchanging relevant information about the ported numbers with other operators through the inter-operator datalinks, the off-line reference database will be updated first prior to the updating of the on-line operational database. The advantage of this decentralized approach is that any problems occurred from one network's on-line database would not affect the operation of other networks.
9. The TA is of the view that the same approach could be adopted for implementing the mobile number portability. That is, the Intelligent Network approach would be adopted for mobile number portability as the long-term solution. Mobile operators may either set up their own individual databases or jointly set up a central database for the required operation. Some of the mobile networks (e.g. GSM 900 and GSM 1800) are designed and operated under the IN platform, it would not be too difficult for these operators to upgrade and equip their equipment to the IN standard. However, for practical reasons, mobile operators will need considerable time to upgrade their networks and equipment to the required IN standard. Call forwarding technique could be used, like that for FTNS, as an interim solution.
Options for Routing Ported Number Calls between Fixed and Mobile Networks
10. At present, all fixed and mobile networks are interconnected at the Interconnect Gateways provided by Hong Kong Telephone Company (HKTC) for local call routing and at the two International Interconnect Gateways provided by HKTI for external call routing. Direct mobile to mobile network traffic constitutes only a few percent of the total mobile traffic. There is therefore a need to address the issue on how to route the ported numbers calls between the fixed and mobile networks.
11. There are at least three options that ported number calls between fixed and mobile networks could be routed and translated by IN and database solution -
Option 1 - All fixed and mobile networks will be responsible for performing number translations for all calls originated from their networks addressed to ported mobile numbers. Likewise, HKTI will be responsible for performing number translations for external calls addressed to ported mobile numbers. After number translations, the calls will be routed directly to the recipient mobile networks. In order to exchange and update the relevant information about ported mobile numbers, each mobile operator has to build up its own operational and reference databases which will be connected with the existing databases of fixed operators and HKTI. This option is considered to be efficient because any ported mobile number calls will be routed directly to the recipient mobile networks without the need to go back to the donor mobile networks first. FTNS operators and HKTI may have to upgrade or expand the existing databases and transmission facilities in order to cater for additional number translations and routing of ported mobile number calls.
Option 2 - Only the mobile networks will perform number translations for the ported mobile numbers. Therefore, it is not necessary to update the reference databases of fixed networks by that of mobile networks for information about ported mobile numbers. For any calls to ported mobile numbers originated from fixed networks, the fixed networks concerned will pass the calls back to the original donor mobile networks for subsequent number translations and routing to the recipient mobile networks. However, under this option, HKTI is still required to upgrade its network to translate and route all incoming external calls to the ported mobile numbers directly to the recipient mobile networks. Therefore, the reference database of HKTI would need to be connected to the databases of mobile networks (in addition to the fixed networks for number portability for FTNS). Option 2 may be more cost-effective than Option 1 because the databases required for handling either the ported fixed or mobile numbers are smaller in size. FTNS operators will not need to upgrade or expand their databases and transmission facilities or to change their existing established technical and administrative arrangements for operator portability. The technical and administrative arrangements for mobile operators in implementing mobile number portability will also be simpler. However this option may be less efficient than Option 1 because those ported number calls across fixed and mobile networks will not be routed directly to the recipient mobile networks but have to go back to the donor networks first.
Option 3 - In the operation of operator portability for FTNS, the fixed networks have been performing number translation for calls originated from the mobile networks to ported fixed number calls. Therefore, if mobile number portability is to be implemented, this existing arrangement could be expanded such that a fixed network will also be responsible for the number translation for calls to ported mobile numbers originated from the mobile networks interconnected with the fixed network concerned. The databases and transmission facilities of fixed and HKTI's networks may have to be upgraded and capable for updating with information about all ported mobile numbers. As this option only involves fixed and HKTI's networks and does not require mobile networks to upgrade their networks, mobile number portability would be easier and faster for implementation than the above two options.
12. The above options are not exhaustive and there may be some other options or alternatives of number translations and routing arrangements between fixed and mobile networks. At this stage, the TA does not have any preference on the options and would like to receive comments and suggestions from operators before making any decisions.
Principles of Cost Recovery
13. There were some costs involved for the operators to upgrade their equipment and networks as a result of implementing operator portability. The TA has laid down the following principles for recovering the costs incurred in providing number portability for FTNS in his Statement No. 1 -
"The underlying principle for cost recovery of number portability shall be that all operators should be fairly compensated for the reasonable relevant costs incurred for the services rendered to the other operators for the implementation of operator portability. It is expected that customers will be charged a fee for the retention of telephone numbers upon change of operators and there would be inter-operator charges to compensate the operators for the above-mentioned costs....The network operators are expected to negotiate a commercial agreement among themselves to recover the costs incurred in the implementation of number portability. If commercial agreements cannot be reached within a reasonable time, the TA may make a determination on the terms and conditions of the interconnection under Section 36A of the Telecommunications Ordinance. "
14. However, the TA finds that the progress in the negotiation among operators on the compensation arrangements on implementing number portability is not very satisfactory. The TA has recently issued a discussion paper to consult the four FTNS operators and HKTI on his views on how the costs incurred in providing operator portability for FTNS should be recovered. In considering the cost recovery principles for mobile number portability, the TA will make reference to the corresponding cost recovery principles for FTNS and the result of discussion and consultation with all operators concerned.
15. In implementing mobile number portability with IN and database approach, it would be necessary for mobile operators to invest and upgrade their networks and switches to conform to the IN and database requirements. Since some operators are still employing analogue switches in their existing analogue and digital mobile networks, it would be impossible or costly for these operators to upgrade their systems with IN capability. The TA's initial view is that those mobile operators who have technical difficulties to upgrade their networks and switches to the required IN and database standard may be allowed to rely on other mobile or FTNS operators to perform the required number translations on their behalf (similar to the arrangement of Option 3 above). In return, they may have to reimburse the relevant network operators for the costs of providing such number translation services for them.
Setup of Industry Forum
16. In order to work out the detailed implementation schedule and address and study the technical feasibility, cost benefits, interface standard and implementation issues of mobile number portability, the TA will set up an industry forum with participation from mobile operators, FTNS operators, HKTI and interested parties.
Consultation
17. The TA would like to solicit views and comments from mobile operators, FTNS operators, HKTI and interested parties on the desirability of introducing mobile number portability in Hong Kong and on the proposed implementation approaches, call routing and number translation between fixed and mobile networks, cost recovery principles and set-up of an industry forum as mentioned in paragraphs 9-16. Any views and comments on this consultation paper should be made in writing and should reach OFTA on or before the end of August 1997 at the following address -
Office of the Telecommunications Authority
29/F., Wu Chung House
213 Queen's Road East
Wan Chai
Hong Kong
[Attn.: Senior Telecommunications Engineer (Technical Support 2)
Telephone No. 2961 6611
FAX No. 2803 5112]
18. The TA reserves the right to publish all views and comments received and the identity of the source.
*************
Office of the Telecommunications Authority
11 July 1997