The Mobile Phone Number Portability Fairy Cometh
The Nihon Keizai Shimbun, Japan’s equivalent of The Financial Times or The Wall Street Journal, reported on Sunday September 7 that Japan will introduce number portability to keitai from 2005. If you’re not familiar with this system, it allows you tokeep your cell phone number when you switch between carriers and thus removes one of the significant barriers to jumping ship and signing up with a rival provider. Now call me a cynic if you like, but doesn’t it seem a little too convenient that this system is being introduced just as it is becoming difficult to sign up new subscribers?
For years NTT DoCoMo, KDDI and
J-Phone whoops, I mean Vodafone — now official from October 1, have rejected number portability saying it’s technically too difficult (read; expensive, or bad news for churn?)
Technically too difficult for Japan but, we note,not something that the Singaporeans could not overcome in 1997, the UK in 1998, Hong Kong and the Netherlands in 1999, Spain, Sweden and Switzerland in 2000 — do I need to continue?
In Japan in the last couple of years the carriers have started seeing the number of new subscribers and ARPU per subscriber fall as the market matures. This has caused them to wake up and realize that there mayin fact be opportunities arising from number portability.
One can imagine what might have happened to J-Phone a few years back during the gap between the launch of Shamail, which revolutionized the way that Japanese people see their phones, and DoCoMo’s I-shot. An intriguing question to ask might be, many additional subscribers might J-Phone have poached from DoCoMo and KDDI?
Just as it’s becoming more and more important to keep hold of subscribers, it’s also possible to snag high-value subscribers from rival carriers with new services.
And now, as if by magic, number portability is –suddenly — technically possible. Yeah, right!
I know some of you will argue that this could be bad for the carriers — why would they want to support it when they could lose subscribers? So have the arguments about number portability being a zero sum game been thrown out with the bath water? Well, it’s got to end up being bad for at least one carrier but all of the carriers must think they have a chance of winning customers. How weak would they be if their projections show them losing customers?
Well, all but perhaps Tu-Ka but then I bet that 2G legacy network with a few million users is becoming more and more of a drain on KDDI’s finances.
So what is the experience of other countries that have introduced the system? Almost a quarter of HongKong users switched carriers but kept their numbers within a year of the system starting there. In Japan the number could be more modest because a carrier switch means a new handset, not just a new SIM card, but even a 10 percent churn would mean almost 8million people getting the service, pricing or features they want without the hassle of a new number.
Don’t get me wrong; I think this is great for consumers. It will introduce new competition into the market that doesn’t exist at present. When has a carrier ever tried to poach you thus far? And it should mean lower prices and more flexibility but consumers should be outraged that this has taken so long to come about and should take with a pinch of salt any claims that this is being done with the consumer solely in mind.
— Contributed by Ken Gai