Wireless Local Number Portability Will Create Significant Savings for Enterprises

By consolidating wireless service providers and managing services, US based enterprises can decrease their wireless costs by as much as 35%, according to Gartner. However, switching 1,000 users from one service provider to the next could cost companies more than US$300,000.

According to Gartner, enterprises should wait until the first half of 2004 to move large groups of users to a new provider. That will allow time for service providers to put the appropriate processes in place and will lessen the risk of loss of service and lost phone numbers.

"The activation of wireless local number portability enables users and enterprises that were once hesitant to switch service providers to do so now because they can keep their cellular numbers," Phillip Redman, research vice president for Gartner said. "But before making the decision to switch providers, it is essential for enterprises to evaluate the total costs, especially when the entire subscriber base is involved. Coverage and customer service should drive the enterprise decision more than price when choosing a carrier partner."

Based on a model for 1,000 users, a majority of the cost, 74%, for switching service providers would result from purchasing new handsets, replacement parts (such as batteries) and accessories (such as car installations, hands-free kits or earpieces). Operational costs would make up 16% of switching costs, including the cost for the time taken to deploy phones, make directory changes and database updates to contact lists, and to change any other account management information. Administration and end-user costs would be minimal and equal 10% of the overall switching costs.

"Before making the final decision to move a large user base, a major consideration for enterprises should be whether users would be happy with the new service," Redman said. "Lower-cost services that don't offer the same coverage will cause a lot of unrest among users and may cost more in support calls and complaints. Another consideration is the contractual obligations enterprises have with current service providers and whether termination fees are involved."

Posted to the site on 26th November 2003