summary
Phone Number Portability (PNP), also known as Mobile Number Portability (MNP), is a service that allows telecommunications users to switch from one service provider to another without changing their existing phone number, regardless of their geographical location. This system, applicable to both mobile and landline numbers, promotes competition among network providers and offers benefits such as tariff reductions, promotions, and special features to users. PNP is a significant tool for promoting fair competition in the telecommunications sector, with consumers as the primary beneficiaries.
The number porting process is typically initiated and led by the recipient operator, preventing any attempts by the donor operator to ‘win-back’ the customer. A centralized number portability clearinghouse platform is generally used for managing port order requests and maintaining a national reference database for all ported numbers. Number portability is widely believed to enhance competition among service providers, reducing the market power of incumbents and benefiting consumers.
Despite the benefits of phone number portability, there are potential challenges, including the risk of number theft, the difficulty in verifying ownership of ported numbers, and the technical feasibility of porting. Nevertheless, the benefits of enhanced competition and consumer freedom often outweigh the potential downsides. This system has been successfully implemented in many countries, serving as a catalyst for fair competition in the telecommunications market. Despite the vast amount of research conducted on PNP, there is still ample scope for further study, particularly on the technical challenges post-MNP implementation and the factors influencing market share after MNP.
Understanding Phone Number Portability
Phone Number Portability, often referred to as Mobile Number Portability (MNP), is a service that enables telecom users to switch from one operator to another without changing their phone number, irrespective of geographical area. This functionality is not limited to mobile phone numbers; it also applies to landline numbers, allowing users to keep their existing numbers even when changing network providers.
Number portability provides quality assurance and introduces benefits such as tariff reductions, promotions, and special features as competition among operators increases. It is a crucial tool for fostering fair competition in the telecommunications market, with consumers as the primary beneficiaries.
In India, for instance, subscribers often cite poor network coverage and tariff issues as primary reasons for porting mobile numbers. The Number Portability Clearinghouse, an entity that manages the porting process, adheres to international best practices for number portability. One key principle is a recipient-led process, where the operator to which the customer wishes to switch initiates and leads the porting process. This approach ensures a smooth transition and prevents ‘win-back’ activities by the donor operator.
Implementing a centralized, shared number portability clearinghouse platform is considered best practice. Such a platform manages port order requests and maintains a single national reference database for all ported numbers, facilitating direct routing.
Studies involving mobile operators and national regulatory or policymaking authorities indicate a prevalent belief that number portability can increase competition among service providers, which aligns with findings by Cho et al. (2013). This increased competition subsequently reduces the incumbent’s market power, benefiting the end consumer.
The Indian Telecom Services Performance Indicator Report by the Telecom Regulatory Authority of India (TRAI) has further details on mobile number portability regulations and reports on the telecom sector.
History and Evolution of Phone Number Portability
The concept of Phone Number Portability (PNP) allowed users the freedom to change their cellular phone service without any charges. The only expense incurred would be the cost of a new SIM card depending on the chosen service provider. Interestingly, some companies opted not to charge for this service at all.
The implementation of PNP in the global telecommunications industry saw Singapore pioneering the initiative. As one of the first countries to introduce number portability for mobile telephones in 1997, Singapore implemented this through voice call and SMS forwarding. The full realization of true number portability occurred on June 13, 2008, with the implementation of a Centralised Number Portability Database Solution proposed by the Infocomm Development Authority (IDA) of Singapore.
Under this system, the operator initiating the call checks a centralized database to determine the call’s route. The operator would then route the call to the Serving Network. Before the initiation of the call, the originating operator verifies the number’s status with the initial operator or donor operator. After the donor operator confirms that it no longer possesses the number, the originating operator proceeds to check the centralized database, following a procedure known as ACQ.
Phone numbers have emerged as personal identifiers for individuals over the years. Without number portability, there would be a reluctance among people to change their numbers. Yet, as hundreds of thousands of numbers are switched, it becomes a challenge to definitively ascertain the ownership of a specific telephone number.
The advent of Number Portability reallocated the property rights of mobile telephone numbers from the operators to consumers, thereby enhancing competition in the mobile telecommunications sector. The introduction of Mobile Number Portability (MNP) in India on March 31, 2010, served as a significant milestone in the telecom industry.
Despite the rapid growth of empirical papers on this subject, the technical challenges arising post-MNP implementation remain unexplored. There is no empirical research on how MNP alters the influence of other factors affecting the evolution of market shares of competitors. As cell phone culture started gaining traction in India about a decade ago, service providers made extensive efforts to attract customers. Despite this, research established that perceived ease of use played a significant role in influencing user acceptance and usage behavior of information technologies.
Benefits and Impacts of Phone Number Portability
Phone Number Portability, often referred to as number portability, brings about significant benefits to the consumers and promotes intense competition among mobile network providers. It gives consumers the freedom to switch between mobile network providers while retaining their original mobile number, and ensuring all emergency and safety services remain intact. This reduction in barriers promotes healthy competition among carriers, and subsequently redefines competition for business consumers who can now explore a larger range of telecommunications advantages, especially for premium subscribers.
Countries that adopt number portability witness cascading positive impacts throughout the mobile market. The adoption and use of this service are influenced by a variety of factors and aspects of consumer behaviour, such as attitudes towards the innovation, perceived ease of use, usefulness, self-efficacy, and social influence. These factors, in turn, are influenced by demographic variables like gender, age, income, education, marital status, among others.
A significant volume of research and theoretical frameworks have attempted to explain the factors that influence consumer behaviour and their adoption of innovation. Studies have shown that pro-competition public policies in network markets, such as mobile number portability, act as an effective deterrent in markets with consumer switching costs.
Technical Process of Phone Number Portability
This process is supported by a unique identifier known as a Porting Authorization Code (PAC), typically nine characters long and used by mobile network operators.
To initiate the porting process, the user must first determine which new carrier, plan, and device they wish to use. They should then check their eligibility with the new service provider. The new provider will subsequently contact the current provider to begin the porting process.
During the porting process, users are advised to retain their existing phone and account information until their number is fully activated on the new network. The transfer process generally takes between 10 minutes and 24 hours to complete. If users are bringing their own phones to the new provider, they may need to swap their new SIM card into their device. Once the new service is activated, the existing service is automatically cancelled.
Authorized NPAC users can access telephone number portability data for routing, rating, billing, and network maintenance as part of providing or facilitating telecommunications services. These authorized users include Service Bureaus that perform porting work on behalf of a Service Provider. Law Enforcement and Public Safety Answering Point (PSAP) personnel also access the data during investigations or dispatching emergency response services to verify the porting history and the Service Provider’s Law Enforcement Emergency Contact information.
To ensure a successful porting process, operators must adjust their systems within two crucial domains: Business Support Systems/ Customer Relationship Management (BSS/CRM). This involves adjusting administrative system processes and workflows to handle requests from customers who wish to join or leave the operator.
Potential Challenges in Phone Number Portability
Despite the many benefits of phone number portability, there are a few challenges and risks associated with the process. One of the significant issues that come with number portability is the risk of number theft. Due to the relative ease of transferring phone numbers between carriers, if hackers acquire a user’s account information, they can steal the phone number easily. Hence, subscribers are urged to secure their accounts with a PIN.
Another potential challenge is the technical feasibility of number portability. The 1996 Act requires all local exchange carriers to provide number portability to the extent that it is technically feasible. This implies that there could be situations where it might not be technically possible to retain the same number when switching carriers.
Finally, there is also the issue of switching costs. While number portability has indeed made it easier for consumers to switch telecom providers, the process is not without cost. Consumers often have to deal with the cost of buying a new device, potential contract termination fees, and the effort required to inform all relevant parties of the switch.
Case Studies: Implementation and Impact of Phone Number Portability
In Saudi Arabia, mobile number portability was launched on July 8, 2006, making it the first country to do so in the Middle East region. The service was provided to the mobile subscribers free of charge, with a centralized number portability clearinghouse (NPC) solution implemented by CITC (the telecom regulation authority) and mandated for the two mobile phone operators.
In Australia, local telephone numbers have been portable since 1999. In contrast, the rarely used non-geographic area code 600 in Australia is not portable. The Dominican Republic launched number portability for both mobile and local telephony on September 30, 2009, with Informática El Corte Inglés selected by the Dominican Telecommunications Institute (INDOTEL) to administer the number portability.
Similarly, in Ecuador, mobile number portability has been available since October 12, 2009. Canada, South Africa, and the United States are notable for offering full number portability transfers between both fixed lines and mobile phone lines due to the mixing of mobile and fixed-line numbers in the same area codes.
Phone number portability has shown to be a critical tool in promoting competition and enhancing consumer benefits in the telecommunications market. According to indicators from A4AI’s Policy & Regulatory Good Practices, mobile number portability is a valuable policy tool for developing mobile broadband markets. Moreover, the implementation of the number portability service has been hailed as a significant step towards fair competition in the telecommunications market.
The concept of number portability was not entirely new in 1996 but had been in consideration since the late 1970s and early 1980s following AT&T’s implementation of SS7 technology. The telecommunications industry began exploring number portability to provide services such as 800 service, commercial mobile radio service (CMRS), 500, and 900 service portability.
Future Trends and Research Opportunities
Despite the growing number of empirical studies on mobile number portability (MNP), there is still a significant scope for research, particularly on technical challenges encountered after MNP implementation and the changes in the effects of market share influencing factors post-MNP. Previous studies have primarily concentrated on consumer behavior and its various aspects towards the adoption and use of innovation.
Previous research models have been adopted from the technology acceptance model, and consumer preference is estimated from the conjoint analysis. It is crucial to note that porting time, the porting fee, and the porting process are significant alternatives, and porting time appears to be the most essential factor.
The telecommunication sector, including MNP, is greatly influenced by market liberalization, growth, and competitive market dynamics. For instance, the Indian telecom industry has undergone significant market liberalization and growth since the 1990s. The New Telecom Policy of 1999, for instance, transformed India’s telecommunications market from a state monopoly into a competitive market open to private operators.
Moreover, market conduct in the mobile telecommunications industry and price elasticity of demand have significant impacts on the adoption and success of MNP. Understanding the relationship between the presence of politicians on mobile service operators’ boards and the regulation of the mobile telecommunication sector presents an intriguing area for further study.
Market competition, a key driver for MNP adoption, is another promising research avenue. An overwhelming number of respondents believe that MNP can increase competition among the service providers.
Lastly, research studies should also consider consumer segments and their influence on market dynamics. For example, studies by KPMG, Keynote Institutional Research, and Nielsen have focused on understanding MNP from a consumer perspective, considering factors such as urban-rural and prepaid-postpaid subscriber base distribution. Future research could further explore these areas to gain a more comprehensive understanding of the MNP adoption trends and impacts.
The content is provided by Jordan Fields, Financial Pulse Now
