Removing Mobile Competition Obstacles, Facilitating Consumer Choice
By Bevil Wooding
Liberalisation of the telecommunications market and the introduction of new players to the Caribbean mobile landscape were supposed to usher in a new era of competition and choice for consumers. To some extent it has. We are past the dark days of monopoly providers and the take-it-or-leave-it approach to customer service. Consumers are finally free to choose the provider of their choice. Or are they?
Instead of switching providers, a significant number of subscribers maintain accounts with multiple mobile operators. People do not want to lose their mobile number. Business, too, are reluctant to undertake the expense and hassle associated with changing out scores of mobile numbers.
For telecommunications regulators in the region, this paints a telling picture. The attraction of cheaper calls, faster data plans or the promise more reliable service is not enough for consumers to make the decision to switch service providers. More can and should be done to encourage competition and facilitate greater consumer choice. Another mechanism must be found.
Fortunately, one exists. It is known around the world as mobile number portability (MNP). Mobile number portability (MNP) is the term used to describe the service that allows customers to change their mobile network provider without altering their phone numbers.
MNP is a tool that places choice, and power, in the hands of the consumer. Proponents of mobile number portability believe that a mobile number should be viewed as belonging to a customer. As such customers should not be held to ransom or forced to change their identity when seeking improved service offering from another provider. They should be able to take their mobile number with them, whichever provider they choose.
Several countries worldwide have long introduced mobile number portability to encourage greater competition in the telecommunications sector. For example, as far back as 1996 the US Congress passed an Act that sought to remove barriers hampering healthy competition among players in telecommunications. Australia, Singapore, United Kingdom, India and Ireland are other leading examples of countries that have seen the long term benefits of mobile number portability. In Africa, number portability has been implemented in South Africa in 2006, Nigeria in 2007 and Egypt in 2008 and Kenya in 2011.
So what’s happening in the Caribbean? To date the only English-speaking Caribbean nation state to have implemented mobile number portability is Cayman Islands. The Dominican Republic, Puerto Rico, the French Antilles, and US Virgin Islands all have MNP policies in place. Other Caribbean markets are currently considering or advancing number portability initiatives. The list includes The British Virgin Islands, Haiti, Jamaica, Trinidad & Tobago and the five members of the Eastern Caribbean Telecommunications Authority (ECTEL). More needs to be done, and it needs to be done more quickly.
Impositions like number portability will not always be well received by the mobile operators. Where MNP has been implemented there is usually an initial increase in “churn”. Churn, as it relates to mobile network carriers, is the percentage of subscribers in a given period that cease to use an operator’s services. It is used as an indicator of the health of a company’s mobile subscriber base. Managing “churn” is one of the key goals of any mobile operator. Operators also often cite the cost of implementing MNP solutions as being too prohibitive, particularly in small economies. The implementation of MNP in the Cayman Islands, with its population of around 55,000, should have silenced that argument, but it has not. It is no surprise then that operators will not naturally call for the implementation of MNP. MNP will require central regulatory initiative to implement and oversight to enforce compliance of the operators.
Number portability will compel providers to think even harder about service innovation. This can be a significant catalyst for new products to address numerous un-met consumer needs.
Consumers will no longer have to think twice about moving to another operator if service quality or customer care is not up to par. They can simply move to the network of their choice without having to inform family, friends, colleagues and customers of a new number.
For the industry as a whole, MNP creates for a more even playing field for all market participants. The increased competition it ushers in can lead to price reductions and service innovations. It also provides one less barrier for additional market entrants. New players can focus on bringing in new solutions and products rather than simply crafting the traditional voice products.
Still, there is a bigger prize at stake. Number portability benefits the global competitiveness of the country’s telecommunications industry. This has a spiral effect in attracting investment and ensuring innovation as the main differentiator in the sector, rather than drawing the battle lines on pricing and the simple drive for profits alone.
Will number portability by itself allow Caribbean markets to automatically realise these benefits? No, it will not. Change requires leadership. For number portability initiatives to succeed leadership must not just come from government or the regulator. The private sector also has to do its part in advocating and supporting the required policy components. Greater academic research is also required to quantify and highlight the cost and negative implications of slothful approaches to developing the telecommunications sector. And consumers have to be better educated informed. Any restriction to subscribers’ ability to switch providers can be viewed as a barrier to a truly competitive market. Number portability has to go hand in hand with the removal of restrictive and unnecessary handset locking policies.
Mobile number portability can be a powerful tool for fostering greater consumer choice and promoting more effective competition. At a time when both a sorely needed, we must all do our part to make it happen.