TELECOMS & MOBILE
Mobile number portability to launch soon
26-06-2003
by Andrew McLindon
America's largest mobile operator has dropped its resistance to number portability as the Irish mobile market prepares for its expected introduction in a month.
Verizon Wireless said on Tuesday that it would no longer oppose federal rules that would make it easier for US mobile customers to switch operators and still keep their mobile numbers.
ComReg has mandated that such rules are to be introduced in Ireland by 25 July. Number portability will allow business and consumer mobile phone users to switch to another operator without having to change their 10-digit number, including the 087, 086, 085 prefix. Currently, if Irish mobile users move to a different operator they have to change the prefix to that of their new operator's.
Number portability was due to debut in Ireland in November, but it is thought that its introduction has been delayed for several technical reasons. It is believed that one problem that will have to be overcome is enabling mobile users to know when they are ringing someone on a different network, as identifying this will no longer be possible by simply looking at another person's number. The operators are currently testing the system.
Although the mobile operators said they are not overly concerned about its introduction, some had reservations about its implementation cost. Lawrence McAuley, head of regulatory affairs in Vodafone Ireland, said last year that number portability was costing the industry tens of millions of euro to put in place.
"The ODTR (now ComReg) did a cost-benefit analysis and over-estimated the benefits and underestimated the costs. A lot of it was based on a hypothetical situation where no money was used," said McAuley at the time.
McAuley added that the effect of number portability would be to increase the number of customers for the bigger operators at the expense of smaller operators as users would base their decisions to move on price and service quality.
The cost of implementing local number portability was one of the reasons behind Verizon Wireless's fight against the initiative. The mobile operator, along with Vodafone Group, and the trade group, the Cellular Telecommunications and Internet Association, had opposed number portability partly because the cost of introducing it would have to be passed on to customers. The industry had won three delays against the Federal Communications Commission's attempt to introduce the concept.
Verizon said it has spent around USD50 million to prepare for portability and has estimated that its introduction will cost each of its customers about USD0.10 to USD0.15 per month going forward.
The Cellular Telecommunications and Internet Association said it was against the new rules because they would cost billions of dollars to implement, weren't necessary because of the already high levels of churn in the sector, and would divert money away from improving service, which is what customers are really interested in.
Following the reversal of its opposition, Verizon said it may be able to make money out of portability. According to the company's chief executive, Denny Strigl, there is "no group of people we talk to where they don't say 'we would love to be a Verizon customers, but I'm dependent on my phone number.'"
Indeed, a recent report from research firm IDC put forward the opinion that the higher subscriber churn rates that are likely to come from number portability should benefit most operators as it may result in increased handset sales. It also said that only carriers that fail to improve their service offerings will be the "losers" from number portability's introduction.
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