The judicial decision regarding cell phone number portability in the USA will mean millions in savings on cell phones -- but only for the corporations that do their homework and time their renegotiations successfully, says Greg Carr, founder of Teldata Control, the nation's largest telecommunications expense management firm.
"Corporations have historically had very little leverage in cell phone negotiations," says Carr, whose company has served as a consultant to more than 35% of the Fortune 400. "With portability, this is a watershed moment for the pricing in that market." Carr predicts, however, that many corporations will not do all of their homework before committing to a new deal. "It is important to get a read for how the carriers are going to proceed on pricing over the next 4-6 months," says Nick Wray, a Teldata Control VP who heads up contract negotiations for the company's clients.
However, in a new market study iGillottResearch says that increased churn due to wireless number portability in the USA could cost the wireless operators in excess of US$20 billion over four years. The new study, published as part of iGillottResearch's Wireless & Mobile Industries subscription service, models the cost to the industry of churn increasing by 1 percent, 5 percent and 10 percent per annum. If churn rates reach the worst case model, then the industry will be forced to consolidate, simply to spread the resulting cost of WNP over a larger base.
"Nobody truly knows what the effect of WNP will be in the U.S.," says Iain Gillott, founder and president of iGillottResearch Inc. "But few doubt that churn will increase as a result. The question is how big the increase will be and how the industry will react."
The study also notes that the United States is not the first country to offer wireless number portability and while it would be most convenient if the results of WNP were clear cut in the countries (and cities) that offer number portability, this is not the case. The effects of WNP have varied from country to country, and range from weak to strong."
Posted to the site on 4th September 2003
Posted to: www.cellular-news.com/story/9653.php