Changes in Brunei Darussalam's telecoms market

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Consumers are set to benefit from significant changes in Brunei Darussalam’s telecoms market due to moves by the sector regulator to eliminate mobile termination and incoming call charges, amongst other measures.

On March 3rd, the Authority for Info-communications Technology Industry (AITI) announced plans to rationalise tariffs to ensure a level playing field between mobile operators.

The changes, which become effective at the end of March, include directives requiring local mobile providers to adopt the so-called Sender-Keeps-All (SKA) interconnection regime, which eliminates mobile termination charges, allowing existing players and new entrants to compete on an equal footing. “The different pricing arrangement has become a barrier to inter-operator communications. Subscribers of the major player would be reluctant to call subscribers of a smaller player due to the higher rates imposed,” said the body.

The directives will also remove all incoming mobile charges, meaning providers must drop the BN$0.20 ($0.14) fee charged to subscribers to receive calls – a move that is designed to ensure that telecoms services remain affordable.

Consumers to benefit

Melissa Tithymirda Nikman, AITI’s manager for interconnection, tariff and consumer complaint, said the SKA arrangement would also give operators room to improve on services. “We want them [the operators] to compete and find the initiative to innovate other services which ultimately benefits the consumer,” she told a press conference.

Just days after the changes were made public, new telecoms player Progresif Cellular Sdn Bhd (PCSB) announced that in just a few days it had signed up some 1700 new subscribers for a promotional deal that included free SIM cards and no licence fees. PCSB, a wholly-owned subsidiary of Darussalam Assets Sdn, has set its sights on increasing its market share from 11% to 50% by 2017 after taking over the operations of B-Mobile in July 2014. DST, which has dominated the market since its inception in 1995, currently holds the remaining market share.

Overall Brunei Darussalam has a well-established mobile market with a penetration rate of 114.6% as of 2014, with a total of 465,767 subscribers (388,656 prepaid and 77,111 post-paid), according to AITI data. This reflects strong growth in the market in recent years, as well as an expansion in the number of mobile users of more than one-third since 2006, when subscribers totalled 301,322 and the penetration rate was 82.67%.

But prices for consumers remain high. According to a 2014 report by the World Economic Forum, Brunei Darussalam ranked 134 out of 148 countries in terms of internet and telephony competition and 111th in terms of prepaid mobile tariffs.   

Moves afoot

Market leader DST, which is the only provider of 4G services, recently confirmed it had removed charges for incoming calls from other operators for its prepaid and postpaid subscribers as of the start of March. The removal of incoming call charges comes amid industry concerns that consumers might turn to free mobile chat apps such as WhatsApp, reducing operators’ revenues.  There have also been calls for a new licensing framework that would allow the regulator to introduce a competition code, opening the market to smaller operators as well as supporting innovation.

AITI has also been working to reduce mobile roaming rates, securing a deal with the Infocomm Development Authority of Singapore last September that means Bruneians visiting the island state would enjoy rate reductions of up to 10% for voice calls, and up to 50% for SMS, video calls and data. Describing the agreement as a milestone for the ASEAN region, AITI said this was the first such arrangement in the Asia-Pacific region that included data roaming.

The pricing changes come at a time when steps are also being taken to improve telecoms infrastructure, with officials saying this month that work is under way to address the issue of mobile signal spillover at border areas. The minister of communications said last year 29 telecoms towers would be built to tackle mobile network spillover, while a tri-party coordination committee is in place, with Malaysia and Singapore, to find a solution to the issue.

PCSB has also announced a network development project with China’s Huawei Technologies that will involve the completion of 45 base stations that had been put on hold due to the insolvency of B-Mobile, followed by an additional 31 new ones. The 45 base stations are expected to be ready by April and the 31 additional ones by June, with the stations set to expand PCSB’s network capacity by 40%.

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