Number portability is an issue that has been spoken about for sometime and finally we will see its impact - from 1 January the UK market allows number portability.
"Number portability allows new operators to develop service packages aimed at existing subscribers."
Number portability enables a subscriber to keep his/her number when switching from one network to another. Currently when switching networks, you need to give up your old number and obtain another from your new network. This is one of the barriers to switching networks - the inconvenience and cost of changing your cellular number. With number portability this inconvenience and cost is eliminated.
Many operators will closely study the impact of number portability in the UK market to gain an understanding of how it changes the subscriber market dynamics.
But will number portability shake-up the market? It is unlikely, particularly if the service, quality and price are not similar or the network inducing switching is not similar to the network from which the subscriber is moving. Subscribers will not want to sacrifice these just to change networks. Furthermore, those subscribers who are still servicing a contract will not move unless the network targeting them creatively settles their contract.
Who benefits?
Firstly, the subscribers as they can now vote for networks by moving to the network of their choice. However, changing networks will not be without cost, for example Oftel (UK) has set a switching levy of 25BP. Most likely operators will creatively offer switching packages that will cover the cost to the subscriber.
Secondly, new operators can attract existing subscribers to their networks. Number portability allows new operators to develop service packages aimed at existing subscribers. This type of marketing will see an added growth in developing loyalty programmes to keep existing subscribers.
Implications for SA
Certainly number portability will benefit the two additional network operators that are to be licensed in SA during the course of 1999. In order for the additional operators to compete for subscribers, they would need to either match or better the current value proposition. The following diagram shows how the value proposition in the SA cellular market has developed over the past few years.
Number portability will not benefit the additional operators if they cannot meet the current market value proposition as the subscriber's needs and service expectations have evolved along with the value proposition. Overall service offerings will improve but at the expense of increased churn.
Lastly, number portability is a double-edged sword - it cuts both ways - existing operators can target the subscribers of the new operators as easy as new operators targeting the customers of existing operators.
Share