Number Portability With Brand Building - A Winning Combination for Telcos
According to the latest study from IDC, operators large and small can use number portability to their advantage while averting its potentially negative impact by employing comprehensive, long-term mobile number portability strategies centered on brand building. Two years since its introduction in Central and Eastern Europe, mobile number portability has helped remove some barriers to competition, forcing operators to be more responsive to customers and to continue to focus on marketing and brand development.
Nevertheless, it has initially failed to achieve the dramatic impact hoped for by some operators and feared by others.
Number portability, seen as an important step in the liberalization of telecommunications markets and required by an EU directive, allows mobile users to switch operators while avoiding the cost and inconvenience of changing telephone numbers. At the same time, administrative regulations foster competition among operators and prevent any operators from gaining market power by penalizing users for switching networks.
Corporate image will be essential to both encourage subscriber migration and retain existing customers. While the IDC study defines three main factors that influence user migration (user motivation, operator promotional activities, and barriers to porting, such as fees and lengthy procedures), IDC believes that subscriber attitudes towards their current operators will prove to be the primary driving force in the decision to change providers.
"Mobile number portability represents a notable opportunity for CEE operators to gain market share and change the traditional balance of power in national markets," said Kresimir Alic, senior analyst, IDC CEMA. "Operators aiming to succeed at this must realize that short-term campaigns are less likely to motivate users to change providers if the given company has not created an exceptional and appealing image."
According to the IDC study, the overall rate of ported numbers remains low in most CEE countries, hovering below 1% of all subscriptions. This reflects the very recent introduction of the policy in some cases and slow uptake from customers in others. The only exception is Estonia, where 4.2% of users have switched operators since the introduction of number portability in January 2005. Although user migration rates remain relatively low across the region, the number of users who switch service providers is expected to grow in the coming years as users get used to the concept and more of the obstacles are removed by official intervention."
Posted to the site on 23rd April 2007