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Portability near for wireless set

Posted on: Friday, 12 September 2003, 06:00 CDT

Customers want it and the FCC says they soon can have it, but wireless number portability won't be without its hassles.

The FCC has given wireless carriers until Nov 24 - just in time for Thanksgiving - to let customers switch providers without giving up the numbers they hold so dear.

But carriers continue to fight the seemingly inevitable, seeking the commission's permission to charge more fees to cover the cost of infrastructure upgrades and looking to impose further restrictions on customers. The FCC, which has granted carriers three deadline extensions in recent years to let them better prepare for wireless number portability, says it plans to make this deadline stick and settle the ongoing debate well in advance of Nov. 24.

For their part, many customers are ready to see what's on the other side of the fence (see graphic, right). Some say they hope to strike better deals; others, such as Intrust Bank, are looking for improved customer service.

"[Wireless number portability] is a tremendous opportunity for business users," says E. Patrick Rooney, assistant vice president of operations at Intrust, a large chain of banks in the Midwest. "It is a huge administrative and customer relations problem if you have to change phone numbers because you've changed your wireless carriers."

Jeff Maszal, principal at The Management Network Group, says the research firm's findings show that about a quarter of businesses are ready to switch providers once portability becomes available and about half of those companies say they'll switch within 90 days of portability going into effect.

Analysts encourage customers to explore new opportunities but warn them not to necessarily jump right away before kinks are worked out of the new system.

Down to the wire

The FCC is mandating that carriers support wireless number portability in the top 100 cities in the U.S. in November.The remaining cities are expected to come online in the following six months.

As the FCC deadline nears, wireless carriers have stepped up their efforts to ensure that portability happens on their terms. They repeatedly stress the high cost involved in supporting portability: The Cellular Telecommunications and Industry Association (CTIA) estimates that carriers will spend almost $1 billion to upgrade their networks to support wireless number portability and $500 million per year every year thereafter.

Just last month, a band of service providers dubbed the Wireless Carrier Group filed a document with the FCC calling for new rules and regulations that will let all carriers impose service fees and restrictions on customers that want to ditch their carriers but hang on to their numbers. Group members include Alltel, AT&T Wireless, Cingular Wireless, Nextel Communications and Sprint PCS.

Conspicuously absent from the anti-portability pack is Verizon, which filed a document with the FCC refuting the Wireless Carrier Group's claims that fees and restrictions are needed.

Verizon, the largest wireless service provider in the US. with 33 million users, once vehemently opposed portability In fact, Verizon and the CTIA in June had their attempt to sue the FCC over portability shot down.

Since then, Denny Strigl, CEO of Verizon Wireless, has been quoted by the Associated Press saying, "I don't intend to stand in the way of having local number portability become a reality on Nov 24."

Despite the lack of FCC comment regarding the latest demands from other wireless carriers, some customers already could be paying surcharges related to wireless number portability (some observers speculate carriers actually will turn a profit on these surcharges).

Cingular, Nextel and Sprint PCS have started or plan to hit customers with monthly surcharges to recover expenses associated with number portability The fees range from $1.10 to $1.55 per line and would be in addition to those the Wireless Carrier Group hopes the FCC will let them charge.

Verizon Wireless says it might charge users 10 to 15 cents to recover some of the costs associated with supporting portability once the feature is available. Strigl told the Associated Press that the company has spent about $50 million to prepare for local number portability.

Putting on pressure

While carriers are zeroing in on the price of portability, analysts say they really should be focused on improving their services. A recent J.D. Power and Associates survey of 16,800 wireless users found an average of 9% of calls are affected by static or other interference and 8% get dropped or disconnected.

"Large companies will leverage [portability] as a negotiating tool for some groups of subscribers that aren't happy," says Bob Egan, founder and CEO of consulting firm Mobile Competency.

"In the case of Sprint PCS, AT&T Wireless and Cingular, they have some pretty unhappy [users] from a customer service perspective. Those companies will likely be impacted," he says.

Users who are frustrated with their current providers "always think the grass is greener with another carrier, but that may not be the case," says Phil Redman, an analyst at Gartner. Users might find similar problems with other carriers, especially if the issues are related to billing or customer service, he says.

Intrust's Rooney says he is considering jumping ship, but not in November."! feel that by January or February things will have settled down, bugs will have been worked out, and the new competitive rate plans will be established."

Analysts say waiting is probably a good idea for most users.

"Go through the RFP process and wait at least six months" after wireless number portability is available before trying to port hundreds or thousands of user phone numbers to another carrier, Redman says.

And once companies decide to go down the path of porting numbers, they should keep a few things in mind, Redman says. When signing a new contract, they should ask for specific service-level agreements that apply to future number transfers.When they cancel an existing contract, they should clearly inform their . carriers that they plan to take their numbers.

Customers also should note that standard contract terms apply While any customer can break a contract and port all its wireless phone numbers to another carrier, the customer typically will incur early termination charges. For many companies, portability is not expected to be a wholesale ditch-and-run maneuver. Some are simply looking for more flexibility.

"I will definitely look at more options once I have the ability to carry the number that 1 have used for the past seven years to any carrier other than AT&T Wireless," says Ron Leighton, a network consultant at a large switch vendor he requested not be named.

"There have been times when : AT&T has not had the best plans. However, I have had my number so long that it would be very detrimental to switch," he says. "The lack of number portability has given the providers a hook."

Pieter Schoehuijs, director of worldwide IT infrastructure at Flowserve, a manufacturer of pumps,seals and valves in Irving, Texas, says "[portability] is a big deal for us." He supports 1,200 wireless users and says the majority use AT&T Wireless.

"We have a lot of people who do not want to change to our current provider because they will lose their cell phone number," he says.

"We also have people who have been with AT&T Wireless for a long time and are in an area where they would get better service coverage from another provider," he adds.

Portability will make these types of changes much easier, he says.

"[It] allows users to take off the handcuffs that were binding them to one provider. They will be able to negotiate service contracts that better fit their needs," Mobile Competency's Egan says.

Most analysts expect customer churn rates to surpass the current industry average - which IDC pegs at 2.5% per month soon after the new rules take effect.

But most also expect customer turnover to stabilize near preportability rates before long. That's what happened in Europe and Asia when portability was instituted.

Will they stay or will they go?

Customers are split over whether they will exploit wireless number portability, according to a recent survey of 100 companies with more than 500 employees.

Hindering portability

Allte, AT&T Wireles, Cingular Wireless, Nextel and Sprint PCS proposed these barriers to wireless number portability in a document filed with the FCC.

Hindering portability

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Copyright Network World Inc. Aug 25, 2003

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