Screenshots

A: We are equally anxious in trying to resolve the industry issues. Moving forward, and taking the current industry scenario in mind, we have always been advocating a quick, efficient and cost-effective means to address the conceens raised by the Ministers, the Media, various Government agencies, the NGOs, the general public, and now people like you, the bloggers.

We have highlted to the authorities concerned of our 3-point focus, that is ( 1 ) Blocking of fake MO or Spoofing, this is to immediately plug the leaking hole, like you said in your blog; ( 2 ) Implement itemised billing for prepaid users, again, you also raised the same issue; and ( 3 ) a uniformed enforcement of the Guideline.

Q: Yes, yes, I follow... Is SMS Spoofing a security breach at the Celco's SMSC?

A: SMS Spoofing is a security concern. I was told that the Celcos are already addressing this by implementing an automated system to cater to these, and it should be done by June 2007.

Item( 2 ), about prepaid itemised billing, is a requirement that all Celcos should provide as per General Consumer Code 2003, the GCC...

Q: I helped draft the GCC...

A: Right? So, the itemised prepaid billing as per GCC 2003, I was told, again, the celcos have committed to have it in place between June and September 2007 at the latest. One Celco already has it in place...

Q: That's DiGi. DiGi already has the online itemised billing for prepaid. You need to just subscribe, it's free.

A: Right. Item ( 3 ) is about uniformed enforcement. This is the delicate point at the moment. However, our association stand is that any cases (detected and investigated after November 2006) brought up in the Task Force should be dealt with using past cases as procedure to ensure all CPs are treated fairly.

Q: Who sits in the Task Force:

A: The Task Force comprises representatives from the Celcos, the CPs who are members of the MMCP, the CFM (Communications and Multimedia Consumer Forum), and the MCMC.

The general perspective is that, as time goes by, the Task Force can continue to revise the Guideline to ensure it is up-to-date and relevant to the current technologies and services being offered.

With these three items in place -- plug the SMS Spoofing, itemised billing for prepaid and uniformed enforcement -- we believe the mobile consumers will be well protected.

Q: Why you, or rather MMCP, think so?

A: You see, if we are to analyse the issues we discussed just now, the general concern is none other than seeing the mobile consumers being spammed, and we need to give them the necessary protection. That, and all that we are in the process of doing to cover the consumers, are as per the requirements of the MCMC.

And let me stress that, whatever we wanted to get done, bust be done all at no extra cost to the consumers, and at the same time, giving minimal impact to business models in the market.

Q: Hold you thought there, Romuald. You mentioned about stopping the leaks immediately... stop teh SMS Spoofing and fake MOs. Can it be done at no cost, or with minimal impact, to the consumers and the CPs? I have exposed the fact that the Celcos are talking about getting a so-called Preventive System up, run it as a revenue model like Samy vellu's tollgate, and pass down the cost to the suckers? Is that the case?

A: For us at MNCP, we asked the question: "Do we really need a full-blown Preventive System?" Most of us think it's an overkill. Yes, we told the authorities that we have received feedback that there are plans to increase the revenue share -- to the advantage of the Celco -- by 10 to 15%.

If that's true, if that industry feedback is true, why are we incurring unnecessary cost for a system that cannot guarantee (Guideline) compliance, when there is a faster and cheaper means to address the situation?

Why are the 90% of the CPs, who have been compliant to the Guideline, be penalised?

Should we not be using this financial resource to help the mobile content development and make Malaysia the showcase of multimedia creativity?

Q: Hold on. I have also been informed that the Celcos are set to implement the Preventive System that you said did not stamp fraud and guarantee compliance by the CPs. In fact, the Celcos are using the directives from MCMC to justify the installation of this so-called Preventive System. True?

A: We received some industry feedback on this. So, we relayed it to MCMC.

Q: What did MMCP tell the authorities... MCMC?

A: We informed the MCMC that it should step in and stop the proposed Preventive System from being implemented until it has fully been discussed and agreed to by the Task Force.

Q: Has that appeal of yours, from MMCP, actually materialised?

A: We are working hard on it.

Q: How was the general perspective on all these issues from your members? Do they have a common stand that MCMC must listen to?

A: There was a survey we did on March 29, 2007 during a meeting with a number of Content Providers (CP) at the MCMC Auditorium in Cyberjaya. The survey was aimed to ascertain the general understanding, and to compile feedback on the recent proposal by MCMC with regards to the “Preventive System”. Besides, we also wanted to compile other issues affecting the mobile content industry specifically from the CPs perspective.

We adopted the simple quantitative analysis approach, as the goal was to get a “snapshot” view on the current environment of the industry. We also didn't zero in into any particular segmentation of the respondents, and there was no discussion of any particular issued raised during the meeting.

We issued a total of 34 questionnaires to the representatives of the CPs who attended the meeting, and 31 copies were returned. More than 50% of CPs are involved in Subscription-based content services.

Q: Before we go into the specifics, what was the general gut-feel among the CPs looking at the future of the mobile content industry? Most of them are precariously dependent on subscription-based business model...

A: The survey results tell us that about 76% of the CPs polled has more than 50% of their business model dependent on Subscription-based services, out of which 61% of them have a higher dependency up to in excess of 80%.

However, majority of the complaints processed by the CPs own Customer Service does not appear to be Subscription service related, with 61% claiming it represents less than 10% of the total complaints received.

In terms of customer complaints, 65% of these complaints turns out to be “queries” while 25% complained of recycled mobile numbers.

You may have noticed that none of the complaints were were about SMS Spoofing.

Is the tough to survive? Well, 47% of the CPs perceived that the environment for the mobile content industry is tough but has growth potential. However, 30% of them considered the industry over-regulated. But very significantly, only 2 CPs, or 6% of the respondents, felt the industry is operating at a healthy state.

Q: What about the CPs' perception of the industry environment, especially major issues like SMS SCam. In what way is their perception affected. What do they worry most?

A: For this, we used a grading system to asked a basic question: “What is the most significant issue affecting the industry?

This is overwhelming. About 88% of the CPs surveyed had identified that “Cowboy antics by rogue CPs” as the most important issue affecting the industry.

** (Scale 1-5, where 1 is most significant, 5 is least significant)

Of this, 61% singled it out as the most important concern. This is followed by “User perception damaged by misleading press releases” and “High Operating cost”, both polling in 30% of the votes.

The contrast is that the issues of “Poor Network Infrastructure” and “Lack of enforcement by regulators” were not of major concern among the CPs.

Q: Did the survey sample CPs' perspectives on penalties the authorities meted out against the rogue players... the so-called "Cowboy CPs"?

A: Yes. There was a survey on their perception on how those found violating the provisions/rules -- as listed out in the Provision of Mobile Content and Services Guideline issued on 9th June 2006 -- were to be handled.

I need to emphasise that an overwhelming 71% of the CP’s polled called for the suspension of relevant shortcode (s) for a defined period if the CP is found to be in breach of MCMC Guidelines.

In addition, 47% called for additional penalties in the form of a monetary fine derived from a percentage of revenue and refunds to end users.

For repeat offenders, 85% polled indicated the relevant shortcode(s) should be suspended for a defined period, with 65% of the CPs indicating additional penalties must be applied.

In this case, 38% of the respondents called for the suspension of all the shortcodes under the offending CP.

Q: Does it mean that the penalties MCMC meted out so far on the 22 cited cases of non-compliance were inadequate and ineffective? We have more frauds after November 2006, remember?

A: That is where we at MMCP arrived at our 3-point ficus I mentioned to you just now... plug the SMS spoofing, itemised billing for prepaid users, and uniformed enforcement.

In the final section of the questionnaire, we wanted to understand better the CPs' concerns over a recent directive from MCMC regarding the proposal for the automated system -- the "Preventive System" -- and what they felt should be the way forward. That was our key question.

Look at the response. Close to 71% of the CPs felt the best way for the industry to be regulated was through a committee made up of representatives from the Telco, CP and MCMC. None of the CPs felt an automated Telco system should be implemented. None agreed.

Based on this, almost 80% of the respondents also indicated they were not willing to give up a portion of the revenue share to pay for the automated system.

If the revenue apportion is forced down on the CPs, 71% of the CPs indicated that the cost will be passed on to the consumers. Imagine the chain effect.

On how best to handle the current issues facing the industry, 47% felt better enforcement of existing guidelines should be utilized, while 32% called for better enforcement, i.e. let's have a "diluted version" of the proposed automated Preventive System.

Q: Based on the above, and based on the fact that it takes just some bad apples to tarnish the image of the majoroty of law-abiding content providers, and solutions are not in sight, is there a future for you guys? Is Malaysia a hostile environment for foreign investors in the industry... like your company?

A: Admittedly, it's tough in Malaysia. No doubt about it.

Q: Will you guys pull out from Malaysia, let rogues rule, and you guys go invest else out of the country?

A: Some are considering that as an option.

Q: Have they come to the bridge... ready to cross it?

A: Perhaps.

Screenshots was told that the outcome of the MMCP's survey was presented at the Task Force held on April 5, 2207 at MCMC, Cyberjaya. The full document of the MMCP Survey can be download here in PDF.

Screenshots was told that some repeated offenders of the Industry Guide which persisted in Guideline violation after the 22 non-compliant cases were announced, namely MacroKiosk and MT&T, had option not to participate MMCP which it was first formed.

Romuald, the pro-tem chairman of MMCP, is the country manager of Zed Mobile Malaysia Sdn Bhd, which is a member of the Spain-based LaNetro Zed Group.