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When the Telecom Industry in Western Europe Started Around 1995

When the Telecom Industry in Western Europe Started Around 1995

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Published by Carlos Valdecantos
Telecom. More info at consultantvalueadded.wordpress.com or www.group-mmc.com
Telecom. More info at consultantvalueadded.wordpress.com or www.group-mmc.com

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Published by: Carlos Valdecantos on Jan 03, 2009
Copyright:Attribution Non-commercial

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06/17/2009

 
When the telecom industry in Western Europe started around 1995,mobile phone users were unable to retain their numbers whenchanging their service from one Network operator to another, orfrom one Service Provider to another.This radically changed whenNumber portability appeared, making it easier for the customer tochurn while easier for the telecom operator to retain. Now,something similar is happening in the emerging markets in whichwe are currently working. Number portability is inexistent or justinitiating its first moves. This post illustrates mmC GROUP’s lessonslearnt after several assignments in NP related projects.
Introduction
Each country has its national numbering plan, which dictates whichtelephone numbers is used for what purpose, is managed bynational regulators. Mobile Network operators (MNOs), in turn aresupplied with a number range from the regulator, and they are heldresponsible for the responsible and judicious management of thenumbers assigned to them. When an MNO required additionalnumbers, it had to apply to the regulator for the additional numberrange. MNOs were also required to provide periodic reports to theregulator on how they have managed the stewardship of theirallocated number ranges.MNOs in turn allocate a number range to their respective serviceproviders (SPs). In the past, this was handled by assigning numberson a particular Home Location Register (HLR) to the SP. This method of number allocation worked well for the MNOs as itenabled their bases to be segmented along HLR levels andsimplified systems, security and report related issues in themanagement of their customer bases. In addition to this, byallocating certain ranges of mobile phone numbers (commonlyreferred to as MSISDN's) to certain SIM card number ranges (alsoknown as IMSIs), certain additional validation procedures could alsobe built into MNO and SP systems.
Advantages and Disadvantages to consider by MNOs
One of the big advantages of allocating specific numbers to MNOsand SPs is that anyone with a rudimentary knowledge of thetelecommunications industry can identify to which Network asubscriber belongs, and in some cases even to which SP they arecontracted.Although management of MSISDNs on an HLR and SP level helped toachieve certain productivity and data-integrity benefits for the MNO,the practice has a number of disadvantages, particularly for theend-subscriber. These disadvantages are:
 
* Allocation of large separate number ranges to each MNO in thecountry is not the most efficient method of managing this limitedresource. There tends to be a great deal of wastage of MSISDNs dueto this.* If subscribers wish to keep their mobile numbers, they have noalternative but to remain with their current Network and ServiceProvider, regardless of whether or not they are happy with theservice, products and pricing that they are receiving.* Even if a subscriber is prepared to lose the number in order toobtain a better deal or level of service, the cost of changing thenumber can be significant, particularly if the mobile number hasbeen supplied to customers and business associates, or where itappears on pre-printed stationery such as letter-heads and businesscards.* Due to the reluctance of subscribers to change their numbers,larger more established players in the cellular market are at adistinct advantage over smaller competitors or start-ups in theindustry. This is particularly the case where the market is nearingsaturation, and most quality customers already have a service withone of the incumbents in the market.* Similarly to the above point, as MNOs and SPs are aware thatmany of their customers have no choice but to remain with them orlose their mobile number, the incentive to improve service, createnew and innovative products and services or to improve theirpricing is perhaps less than what it should be.* In an era where consumers are being offered an unprecedentedlevel of choice and service, this practise has taken a significantamount of criticism from consumer forums and action groups.All of the above factors can be viewed as creating an environmentwhere anti-competitive behaviour is encouraged.In order to rectify the above situation, the regulator has to clearlyset 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 Networkand/or Service Provider to another practically at will. Obviously thereare certain business rules, and subscriber contractual obligationsthat will limit the circumstances and frequency of MSISDN ports.It goes without saying that MNP will have profound implications forthe country’s mobile phone industry. These impacts will bediscussed in the following lines considering mmC’s experience andlessons learnt from MNP in other countries that have alreadyimplemented the service.
 
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 forthe sake of completeness), and some that will be unique to eachmarket. These factors are:* Ability of the MNOs to work together to implement the solution.Although the regulators usually are fairly prescriptive in the waythat the solution should be implemented and operated, the actuallegwork has been left up to the MNOs.* Porting time. As mentioned above, long porting times translateinto lower numbers of ports.* Porting fees. In emerging countries currently implementing MNP,a vast majority of subscribers are prepaid users, with extremely highprice sensitivity, high porting fees would essentially stifle the lion'sshare of porting opportunities.* As mentioned in the previous point, most of the subscribers willbe on prepaid Tariff plans. Churn on these tariffs is currently around35% - which indicates that a large portion of subscribers are notparticularly attached to their mobile phone numbers. The number of ports from the prepaid base can therefore be expected to berelatively low in comparison to the base size.* A number of MVNOs (Mobile Virtual Network Operators) andEnhanced Service Providers (ESPs) are mooted to be launchedduring the coming years. If these new entrants' primary competitivestrategy will be one of price leadership, the number of ports can beexpected to increase. There will, however, be a reduction in tariffsand margins as the current players react to this pricing..."* The number of subscribers requesting ports in a particularmarket tends to decrease as the service parity between the variousMNOs in the market increases. In other words, if all of the MNOs in acountry have the same or similar services at similar prices,subscribers are less likely to want to change their current networkprovider.* In the some markets, some operators lack many of the datarelated products and services (3G and EDGE in particular) that itscompetitors sell. Despite the assumption that these will be a netgainer of subscribers, this lag behind the competitors couldencourage movement of high usage subscribers to its competitors.* Lastly, the question of how the MNOs treat their external serviceproviders (XSPs) will greatly influence the number of ports once MNPis switched on. If the current status quo is maintained, in an MNPenvironment, the XSPs will be in a position of relative strength, as

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