CHARGING METHOD FOR MOBILE PHONE USERS (Switch from Mobile-Party-Pays to Calling-Party-Pays)

[Mr Speaker in the Chair]

Mr Tan Soo Khoon asked the Acting Minister for Information, Communications and the Arts if the Infocomm Development Authority of Singapore will make a decision soon on whether to switch from the existing Mobile-Party-Pays (MPP) charging method to the Calling-Party-Pays (CPP) charging method for mobile phone users.

The Acting Minister for Information, Communications and the Arts (Mr David T. E. Lim): Mr Speaker, Sir, IDA is now examining the pros and cons of mandating that mobile operators switch from a Mobile-Party-Pays (MPP) charging method to the Calling-Party-Pays (CPP) regime. Moving to the CPP system may lower mobile rates. But, on the other hand, fixed line users may have to pay more for calls between fixed-line and mobile users.

Deciding which system benefits users more is a complex issue. MITA is therefore conducting a detailed economic analysis to examine, among other things, the capital and operating costs involved in implementing the change from MPP to CPP, how the CPP charging system could impact prices that consumers pay, the system of inter-operator network charges for both fixed and mobile operators, and consumer and industry behaviour arising from such a change. We expect to reach a decision by the fourth quarter of this year.

Mandating a change in the charging method is a serious matter, because it would have a major impact on both industry and consumers. This was why IDA had, earlier this year, conducted a public consultation to seek views on the two charging regimes. However, only two consumers had responded to the public consultation. IDA is, therefore, conducting a consumer survey to obtain more comprehensive feedback directly from mobile phone users, in order to complement the views obtained from industry in the public consultation. IDA will incorporate the survey results and consumer views into its study.

Mr Tan Soo Khoon (East Coast): Sir, I am sure the Minister is aware that most countries have already opted for the CPP system. Although he has stated that the fixed line callers may end up paying more, is he aware that the experience in other countries is that, under the CPP system, operators would actually come out with a great variety of charging plans and thereby offering consumers greater choice, which in the end actually results in lower prices?

Mr David Lim: Sir, indeed, a number of other countries have adopted the CPP system. In Singapore, the adoption of MPP has not hindered the growth of the industry. In fact, we have one of the highest rates of mobile phone usage in Singapore. Our penetration rate is higher than 70%. I think the latest figure shows that it is about 71%. So this has not hindered the growth of the industry. But for the reasons I cited earlier, switching from one system to the other does have implications for the marketplace. So we want to take time to study this issue carefully.