Mobile Number Portability. Lessons learnt.

When the telecom industry in Western Europe started, mobile phone users were unable to retain their numbers when changing their service from one Network operator to another, or from one Service Provider to another. This radically changed when Mobile Number Portability (MNP) appeared, making it easier for the customer to churn while more difficult for the telecom operator to retain. Now, something similar is happening in the emerging markets in which we are currently working.  Number portability is inexistent or just initiating its first moves. This post illustrates mmC GROUP’s lessons learnt after several assignments in MNP related projects.

Introduction
Each country has its national numbering plan, which dictates which telephone numbers is used for what purpose, is managed by national regulators. Mobile Network operators (MNOs), in turn are supplied with a number range from the regulator, and they are held responsible for the responsible and judicious management of the numbers assigned to them. When an MNO required additional numbers, it had to apply to the regulator for the additional number range. MNOs were also required to provide periodic reports to the regulator on how they have managed the stewardship of their allocated number ranges.

MNOs in turn allocate a number range to their respective service providers (SPs). In the past, this was handled by assigning numbers on a particular Home Location Register (HLR) to the SP.

This method of number allocation worked well for the MNOs as it enabled their bases to be segmented along HLR levels and simplified systems, security and report related issues in the management of their customer bases. In addition to this, by allocating certain ranges of mobile phone numbers (commonly referred to as MSISDN’s) to certain SIM card number ranges (also known as IMSIs), certain additional validation procedures could also be built into MNO and SP systems.

Advantages and Disadvantages to be considered by MNOs
One of the big advantages of allocating specific numbers to MNOs and SPs is that anyone with a rudimentary knowledge of the telecommunications industry can identify to which Network a subscriber belongs, and in some cases even to which SP they are contracted. Although management of MSISDNs on an HLR and SP level helped to achieve certain productivity and data-integrity benefits for the MNO, the practice has a number of disadvantages, particularly for the end-subscriber.

These disadvantages are:

1. Allocation of large separate number ranges to each MNO in the country is not the most efficient method of managing this limited resource. There tends to be a great deal of wastage of MSISDNs due to this.
2. If subscribers wish to keep their mobile numbers, they have no alternative but to remain with their current Network and Service Provider, regardless of whether or not they are happy with the service, products and pricing that they are receiving.
3. Even if a subscriber is prepared to lose the number in order to obtain a better deal or level of service, the cost of changing the number can be significant, particularly if the mobile number has been supplied to customers and business associates, or where it appears on pre-printed stationery such as letter-heads and business cards.
4. Due to the reluctance of subscribers to change their numbers, larger more established players in the cellular market are at a distinct advantage over smaller competitors or start-ups in the industry. This is particularly the case where the market is nearing saturation, and most quality customers already have a service with one of the incumbents in the market.
5. Similarly to the above point, as MNOs and SPs are aware that many of their customers have no choice but to remain with them or lose their mobile number, the incentive to improve service, create new and innovative products and services or to improve their pricing is perhaps less than what it should be.
6. In an era where consumers are being offered an unprecedented level of choice and service, this practise has taken a significant amount of criticism from consumer forums and action groups.

All of the above factors can be viewed as creating an environment where anti-competitive behaviour is encouraged. In order to rectify the above situation, the regulator  has to clearly set an implementation plan to ensure that Mobile Number Portability (MNP) is available at the end of that period. MNP will allow subscribers to “port” their numbers from one Network and/or Service Provider to another practically at will. Obviously there are certain business rules, and subscriber contractual obligations that will limit the circumstances and frequency of MSISDN ports.

Critical success factors
The success of MNP in will be influenced by a number of factors, some of which have been mentioned above (and will be repeated for the sake of completeness), and some that will be unique to each market. These factors are:

1. Ability of the MNOs to work together to implement the solution. Although the regulators usually are fairly prescriptive in the way that the solution should be implemented and operated, the actual legwork has been left up to the MNOs.
2. Porting time. As mentioned above, long porting times translate into lower numbers of ports.
3. Porting fees. In emerging countries currently implementing MNP, a vast majority of subscribers are prepaid users, with extremely high price sensitivity, high porting fees would essentially stifle the lion’s share of porting opportunities.
4. As mentioned in the previous point, most of the subscribers will be on prepaid Tariff plans. Churn on these tariffs is currently around 35% – which indicates that a large portion of subscribers are not particularly attached to their mobile phone numbers. The number of ports from the prepaid base can therefore be expected to be relatively low in comparison to the base size.
5. A number of MVNOs (Mobile Virtual Network Operators) and Enhanced Service Providers (ESPs) are mooted to be launched during the coming years. If these new entrants’ primary competitive strategy will be one of price leadership, the number of ports can be expected to increase. There will, however, be a reduction in tariffs and margins as the current players react to this pricing…”
6. The number of subscribers requesting ports in a particular market tends to decrease as the service parity between the various MNOs in the market increases. In other words, if all of the MNOs in a country have the same or similar services at similar prices, subscribers are less likely to want to change their current network provider.
7. In the some markets, some operators lack many of the data related products and services (3G and EDGE in particular) that its competitors sell. Despite the assumption that these will be a net gainer of subscribers, this lag behind the competitors could encourage movement of high usage subscribers to its competitors.
8. Lastly, the question of how the MNOs treat their external service providers (XSPs) will greatly influence the number of ports once MNP is switched on. If the current status quo is maintained, in an MNP environment, the XSPs will be in a position of relative strength, as they will be able to perform large scale migrations of particularly corporate clients to the MNO offering the best deal.

Let’s conclude this post with some additional hot topics to consider before implementing MNP:

• How will MNP work? Which is the best MNP model?
• How to establish a inter-operator group? Which is the impact in the Ordering System Specification (OSS) and the Central Reference Database (CRDB) ?
• What commercial agreements should the MNO consider?
• What should be the Network Technical Specifications to implement?
• How should be defined the porting process?

It would be long to detail all this in just one post. If any of you is interested in a higher level of detail, just let me know.
Best
CVA