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Number portability is a policy that was included in regulatory frameworks during the process of opening up fixed-telephony markets in Latin America & the Caribbean at the end of the 1990’s, or more recently, via free-trade agreements signed with the United States. In both cases, the implementation of number portability has not been obligatory, meaning that specific regulation is required. Furthermore, this should be understood only as an expression of good will until market evolution justifies the addition of this service offering.
Prior to the launch of number portability in Mexico in July of 2008, this policy was only in place in Puerto Rico and the French West Indies. This is because as a territory of the United States, it is under the jurisdiction of the Federal Communications Commission. A similar situation occured in the French West Indies as they fall under the jurisdiction of the French regulatory agency ARCEP.
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As a result, on April 1, 2006, number portability became law in French Guyana, Martinique, Guadalupe, St. Bartholomew and St Martin. It should be mentioned that Panama launched number portability in 2003, but it only applied to fixed-telephony lines. It wasn’t until 2011 that the Panamanian authorities authorized number portability for mobile lines.
Signals Telecom Consulting highlights that in the non-Spanish speaking Caribbean, non-incumbent operators, like Lime Antigua and market regulators, like those in the British Virgin Islands, Jamaica, Trinidad & Tobago and the five members of the Eastern Caribbean Telecommunications Authority (ECTEL), have considered number portability and in some cases included it in their plans, without yet having actually implemented it.
Although the possibility of number portability exists in the U.S. Virgin Islands, which are also under the jurisdiction of the FCC, number portability has not been implemented due to alleged technical inconveniences that won’t allow incumbent operator Innovative Telephone (Vitelco) to implement this service offering. Nevertheless, the local Public Utilities Commission ordered Innovative to share its landline numbers with competitors by June 16.
Number portability has made important inroads in the Caribbean basin with an increasing number of operators like Flow and, in some markets, Lime actively requesting its implementation. Nevertheless, unfortunate delays continue to arise as recently shown by the Cayman Islands’ Information and Communications Technology Authority announcement that it was postponing number portability implementation as the two most important telecom operators of the market – Digicel and Lime – could not agree on the technical approach to its implementation. The situation in the Cayman Islands is not atypical; looking at their continental neighbors is easy to identify markets such as Argentina, El Salvador, Honduras and Guatemala where the unfulfilled original promised was to implement number portability prior to 2012.
But, even with their continuous delays, these markets present a more positive outlook for number portability than Guyana or Uruguay where the government unabashedly favors the incumbent fixed-line telecommunications operator – GT&T and Antel respectively. On the bright side, the number of markets where number portability is a reality has increased exponentially since Mexico’s 2008 number portability implementation. Since then, Brazil, Chile, Colombia, Dominican Republic and Ecuador have implemented it.
The greatest impact of number portability can be seen in the benefits it provides to users, via changes in the behavior of service suppliers present in the marketplace. With the advent of number portability, operator strategies are focused in protecting the most profitable part of subscriber bases via rate reductions, an increase in the number of promotional efforts and more facilities that allow clients to gain access to value added services.
Moreover, efforts are made to improve customer service, both at customer service centers as well as by telephone. Operators try to reduce response time for fixing problems: fixed-line suppliers seek to cut line installation times and, via promotions, reduce the cost of the installation itself while mobile operators become more aggressive in their promotions and rates. Finally, operators invest in infrastructure for minimizing and/or eliminating network congestion problems.
Independent of the type of number portability to be implemented in the marketplace, for it to work, there must be two operators offering service in the geographic area where the user that wishes to maintain their number and move over to another operator resides. Historically, areas having only one supplier are those having the lowest income levels. Such areas lack coverage provided by other local operators because said operators do not see any reasonable possibility of a achieving a positive return on investment by launching commercial services there.
Signals Consulting stresses that implementation of number portability will not translate into a massive exodus of subscriber from one operator to another nor would number portability always benefit the smaller operator in the market. Experience has shown that quality of service, and in the case of mobile operators, coverage are some of the characteristics most coveted by subscribers when deciding to port their number.
In the short run, beyond household accounts (fixed telephony) and individuals enjoying high levels of disposable income, Signals sees the impact of number portability implementation as being an increase in competition for the corporate and small- and medium-sized business sectors. As for fixed portability, the household has the possibility of not only disconnecting its telephony service but also other services that generate revenues for the operator such as long distance, pay-TV services and broadband services.
On the mobile side, number portability faces a few obstacles when it refers to contract subscribers: in most markets individuals must wait until their current mobile contract lapses before being able to switch providers. Other obstacles include requiring the subscriber to request the porting of his number in person or establishing long “transition” periods for the number portability to take place.
Jose Otero is president of Signals Consulting. Follow him on Twitter (@Jose_F_Otero) or email him at [email protected].
