MNP: Coming Soon!

Mon, 22 Nov 2010 Source: Marfo, Eugene

Simply put, Mobile Number Portability (MNP) is a service that enables mobile phone users to keep their phone numbers even when they switch to another network. For instance, when switching from MTN (024) to Tigo (027) you still get to keep your complete 024 number.

MNP will be introduced in Ghana by the middle of 2011. Other countries in Africa including Egypt and South Africa are already offering the service. Indeed South Africa started implementing the service in 2006. In Europe, Sweden, Germany, and the United Kingdom (UK) offer MNP. The service is offered in the USA as well.

Most subscribers put value on their mobile phone numbers, especially when they have been in use for a long period of time. The ability to switch from one mobile telecommunication operator for better service (customer care, low tariffs) or any other reason is the cardinal benefit of MNP.

This benefit however may be restricted to subscribers with a wider circle of contacts such as customers in the corporate world. Retaining the same number will enable customers in this group maintain their contacts. Low income earners who often make up the bulk subscriber base of these network operators are less likely to patronize MNP. This group placed at the bottom of the pyramid (BOP) often keeps in touch with a small circle of friends and relatives and so easily informs each other by other means whenever there is a change of phone number. Indeed some of these customers may be quite happy to loose their previous numbers if they do not wish from certain acquaintances.

Because of its substantial network and operational cost, in implementing MNP, there is the need to do a thorough analysis to assess the feasibility of introducing the service.

Firstly, it is important to understand the number of mobile subscribers in the market. This will give an indication of the potential demand for the service. A report by Business Monitoring International (BMI) which says on its website that it is a leading, independent provider of proprietary data, analysis, ratings, rankings and forecasts covering 175 countries and 22 industry sectors, has said in the first six months of 2010, it calculated that the number of mobile subscribers increased by 7.3% to reach 16.475 million. For the year as a whole, BMI says it now predicts that the market will expand by just over 14%. This will raise the penetration rate to just over 70% by the end of 2010.

Understanding customer behavior is also very important. As previously stated, consumers at the BOP are less likely to port their number to another network especially if it involves cost. An analysis of this group’s lifestyle and use of the mobile phone suggest that these subscribers place value on being able to use the service at cheaper rates (family and friends, free night calls, etc.). They are more likely to own multiple SIM cards with different phone numbers. Business users on the other hand place a higher value on their phone numbers and are more likely to retain them even at a cost.

The level of competition in the market also determines whether there is the need for MNP. In a market where the players offer similar prices and quality of service, subscribers are less likely to port their numbers so MNP will not really have any effect in such a market. On the other hand the introduction of MNP may simulate competition in the market. It may trigger a price war amongst telecom operators.

When finally implemented in Ghana, the cost of the service and its efficiency will also determine the level of patronage. Where it costs more to port a number than switch SIM card, patronage of the service especially by consumers at the BOP is likely to be poor. In Germany for instance it costs €25 to port a number and it takes 10 days in France, to port a number. Sweden offers the service free of charge whilst in Ireland, porting of a phone number takes between 1 and 2 hours.

The successful implementation of MNP is also dependent on timing. It is considered best to introduce the service at the same time a new mobile operator is entering the market as that provider is likely to market the service. The outstanding success of MNP in Hong Kong was in part due to its implementation at the same time as new mobile operators were launching their service. With Glo soon to start operation in Ghana and Kasapa going Expresso, I believe a fertile ground is being prepared for the successful launch of MNP

Analysts feel that mobile number portability may trigger the next price war amongst telecom operators that would eventually benefit the end customer. This is evidenced in Ghana as MNP’s expected introduction has led to a stiff tariff competition among the various mobile telecommunication operators.

MNP comes at a great cost to the service provider. They include the alteration of operational and customer support systems, the creation and operation of data bases for ported numbers, the development of new processes for porting and the administration of the porting process.

Ghana’s telecoms regulator the National Communications Authority (NCA) has named PortingXS and its local partner CIS Ghana as the preferred bidder to supply the central equipment and services needed to implement Mobile Number Portability (MNP) in the country. PortingXS, which is headed by Porting Access of the Netherlands, was one of nine firms to submit bids for the equipment. The applications were evaluated by a team made up from members of the NCA and representatives of the country’s six mobile operators. GBC News quotes the watchdog as saying it is on track to launch MNP by 1 July 2011.

Despite the huge cost of implementing MNP, the service is now seen as a customer right, enabling customers to retain their numbers if they so wish. It has become an essential feature of a competitive mobile sector.



Columnist: Marfo, Eugene