Doubts are emerging over whether telcos actually intend to compete on phone number portability, despite it kicking in on April 1.
There has been a conspicuous lack of marketing promoting number portability, which allows customers to take their phone number with them should they change carriers, and one source suggests this is not an oversight.
Having to change phone numbers has been identified as a major barrier to users moving services and, therefore, to competition.
Although the aim of portability is to strengthen competition and to help small-to-medium sized businesses wishing to change providers especially, an industry source predicts the number of customers switching allegiance — the so-called churn — won’t change much. The present churn-rate is around 20%.
“Number portability only means customers can leave a telco, not that a competing provider has to accept them,” the source says. Low-revenue pre-pay customers looking for a new provider are likely to get the cold shoulder from rival telcos, he says.
The source also alleges that there is a “gentlemen’s agreement” between the members of the Telecommunications Carriers Forum, which is in charge of the project managing number-portability. The agreement is that nobody is to use number portability for marketing purposes, and there are to be no special offers aimed at luring users away from their present networks.
However, the independent chair of TCF, Malcolm Alexander, a former competition lawyer, vigorously denies there is any such agreement, which would open providers up to “massive exposure under the Commerce Act”. He adds that the issue cropped up during at TCF working group meeting six months ago.
Alexander says TCF members were warned about the inadvisability of striking such an agreement and, to his knowledge, there is none. However, Alexander says he can understand TCF members wanting to start out slow with number portability. The April 1 date was tough to meet, he says, and there are plenty of other areas for New Zealand telcos to focus on as well, so taking a breather and not going all-out flagging number portability in their marketing is understandable.
But, if there is little or no marketing of number portability over the next two to three months, the Commerce Commission and the Ministry of Economic Development will be asking questions, Alexander says.Telecom’s general manager of consumer marketing, Kevin Bowler, says the company’s priority is ensuring a seamless launch of number portability, with hassle-free service for customers. Porting telephone numbers is a complex process, he says, but Telecom has launched its portability service successfully. Bowler claims a number of Vodafone customers switched over to Telecom on the switch-over day.
Asked why Telecom was not marketing number portability, Bowler pointed to studies of overseas markets. Telecom noted that customers overseas have often been disillusioned when the porting process has not met expectations fired-up by early aggressive marketing.
Vodafone’s director of customer care, Andrea Midgen, says the mobile operator welcomes number portability as another way to attract customers, but chose to focus on an information campaign. Vodafone has published information telling people how to port which is available in Vodafone shops, through its account managers and on the internet, says Midgen.
Number portability was the reason Telecom closed down its old 025 network, on March 31, according to Telecom spokeswoman Rebecca Earl.
The 025 network didn’t support number portability, says Earl, who adds that customers were given the option to move to the 027 network — with a subsidised handset — if they made the switch before March 31.
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